Greetings,
I would offer the following suggestions for choosing a design project:
1/ Make sure it is something that interests you, and gives you sufficient scope to demonstrate your abilities. As part of my engineering course, I was offered a number of ideas for a final project topic. However, I did not feel that any of these were particularly ambitious, and ended up choosing my own topic.
2/ Try to ensure that the success or failure of your project will not depend on circumstances beyond your control. The topic I finally selected was designing an electronic gear shifting system for a racing car (another group project I was involved in). While the design was reasonably successful - the servo systems worked as expected, and I achieved a good academic result, other problems with the vehicle meant that I did not really get an opportunity to do much in the way of 'real life' testing of the system.
Regarding power electronics projects, how about an induction heater? I built a simple unit a while ago, about 100W output, but scaling it up would require significantly more complex control and protection circuits.
Hope this helps,
John