In coastal waters, local eddies may be generated by tidal current separation in the lee of islands, headlands and narrow channels. Since these phenomena are unsteady and localized in space and time, there are two difficulties in studying local eddy generation and related phenomena such as water exchange processes. One difficulty is of numerical modelling by limited computer resources. The other difficulty is of observation for continuous and simultaneous sampling in the vortex generated area. This paper reveals the features of local eddy generation and its role in coastal waters using a discrete vortex method (DVM). To assess the accuracy of the method, state of the art observation results are also presented from High Frequency Radar, Acoustic Doppler Current Profiler, and other oceanographic techniques.