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The announcement is another milestone for the £10m project which will see four floating generators, designed to convert wave movement into electricity, positioned off the coast of the new facility's sister site  - the European Marine Test Centre also in Orkney.

Expected to be operating by 2008, the 160-metre Devices (Pelamus is Greek for "Sea Snakes"), it is anticipated it will provide around 3MW of green electricity, enough to power around 3,000 homes.

Pelamis consists of four 40 metres long steel tubes, which float on the surface of the sea. The action of the waves makes each section flex against the next one. Hydraulic rams drive fluid, which then drives generators powerful enough to supply 500 homes each.

Keith Anderson, ScottishPower Renewables Managing Director, said:
"With the first ever planning consent granted for a wave farm, this is a landmark day in the development of renewable energy in Scotland.

"ScottishPower is at the forefront of the development of both forms of marine energy – wave and tidal. Planning approval for 4 projects in Orkney is a major milestone that takes us one step closer to the commissioning of our first commercial wavefarm in 2008 and the new Tidal Test Centre will offer essential support to the deployment of the tidal device we are developing with our Norwegian partners Hammerfest Strøm.

"Scotland has the potential to become the world leader in marine technology – we have the best resources and are designing and constructing the best technologies. If we, as a nation, are to realise our renewables potential, and achieve our challenging renewable targets of 6GW by 2020, then the UK and Scottish Governments must continue to provide real commitment in terms of infrastructure, investment and political leadership. Today is a great example of such commitment."

ScottishPower and Norwegian technology company Hammerfest Strøm have set up a new tidal power company Hammerfest UK utilising devices of Hammerfest Strøm.

Both companies are working to install a full-scale prototype of the tidal device in Scottish waters, in preparation for deployment of the technology on a wide scale in Scotland and around the globe. Manufacture of the prototype will commence in 2008, with installation during 2009.