The Taiwan Strait has recently been proposed as a promising site for dynamic tidal power systems because of its shallow depth and strong tides. Dynamic tidal power is a new concept for extracting tidal potential energy in which a coast-perpendicular dike is used to create water head and generate electricity via turbines inserted in the dike. Before starting such a project, the potential power output and hydrodynamic impacts of the dike must be assessed. In this study, a two-dimensional numerical model based on the Delft3D-FLOW module is established to simulate tides in China. A dike module is developed to account for turbine processes and estimate power output by integrating a special algorithm into the model. The domain decomposition technique is used to divide the computational zone into two subdomains with grid refinement near the dike. The hydrodynamic processes predicted by the model, both with and without the proposed construction, are examined in detail, including tidal currents and tidal energy flux. The predicted time-averaged power yields with various opening ratios are presented. The results show that time-averaged power yield peaks at an 8% opening ratio. For semidiurnal tides, the flow velocity increases in front of the head of the dike and decreases on either side. For diurnal tides, these changes are complicated by the oblique incidence of tidal currents with respect to the dike as well as by bathymetric features. The dike itself blocks the propagation of tidal energy flux.