The proposed Swansea Bay tidal energy lagoon is an example of a relatively small-scale tidal barrage demonstrator project. A key concern with this technology is that such structures may exacerbate other environmental problems. However, such structures might also create beneficial environmental effects in some areas, such as mitigating the impact of storm surges. In this paper we model the hydrodynamics of the Swansea lagoon and surrounding area using a depth-averaged numerical model. We simulate a number of storm surge events from the past 40 years and analyse how the presence of the Swansea Lagoon (under various operating strategies) modifies the resulting water levels.