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Inverness-based Wavegen will receive 2.1 million pounds to harness wave energy from a prototype, building on their experience with the world's first commercial wave power machine on the Isle of Islay.
THGL, who operate in Pembrokeshire in west Wales, will receive 1.6 million pounds to develop and test technology to generate power in areas of fast tidal flow.
"Wave and tidal power have huge potential to supply a significant proportion of the country's future energy needs," Energy Minister Brian Wilson said in a statement.
A recent report commissioned by the government recommended reconsidering a project to build a huge tidal barrier across the Severn Estuary to generate green power which was shelved in 1987 as being uneconomic.
It said costs for the project had fallen sharply in recent years and the scheme would help reduce emissions of greenhouse gases which many scientists blame for causing global warming.
Britain has a target of generating 10 per cent of its electricity from green sources by 2010, up from three per cent at present.
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