Plans for a £1bn gas-fired power station in Pembrokeshire are set to be approved.
The Environment Agency has announced it is likely to grant an environmental permit for the 2000 Mw plant.
Developer RWE npower said it was confident the plant, which is due to supply energy to around 3m homes, would receive all the necessary permits.
Friends of the Earth Cymru has previously claimed marine life would be damaged.
DECC, the Department of Energy and Climate Change, gave planning permission in February 2009.
Building work started in May 2009 and is due to be completed in 2012, providing about 100 jobs.
"We are pleased that our application for an environmental permit for the operation of Pembroke Power Station is progressing," said RWE npower.
"We welcome the announcement today from the Environment Agency that, having thoroughly reviewed the information we have provided, they are 'minded to' grant a permit in due course."
Last year, Friends of the Earth complained that the power station could damage marine life in the Pembrokeshire Marine Special Area of Conservation.
But the then Environment Minister Jane Davidson responded, saying she was "content that the Environment Agency is applying the appropriate approach".
The Environment Agency has now delivered its findings, saying it is likely to grant the environmental permit.
"The agency has imposed high standards in the draft permit, set under EU and UK laws and guidance, to protect the important wildlife habitats in and around Milford Haven, and also to protect people living in nearby communities," said a statement.
"Some of these tough standards include controls on noise levels from the site, stringent limits on emissions to air and controls on the temperature and composition of the discharge into the Haven.
"This discharge is likely to have a small, localised impact around the power station itself, but overall this will not have a detrimental effect on the integrity and status of the Pembrokeshire Marine Special Area of Conservation.
"The agency is satisfied that by insisting on these tough standards, the site will be able to operate without causing harm to people in the nearby communities or causing unacceptable harm to local wildlife and their habitats as a whole."
The Countryside Council for Wales (CCW) has voiced its concerns over the cooling method at the plant in relation to marine life.
But it said in a statement: "Once we have had an opportunity to properly examine the EA's draft permit decision and supporting documentation, we will be discussing our position and considering appropriate next steps."