To date the industry has received £15 million in R&D funding, but several developers have tested prototypes in real sea conditions and want to install larger pre-commercial devices (ENDS Reports 332, pp 28-31 and 350, p 32 ).
The DTI announced in August that it had set aside £50 million for marine renewables (ENDS Report 355, p 14 ). The fund's allocation broadly corresponds to proposals put forward last May by the British Wind Energy Association (ENDS Report 352, p 13 ).
Successful applicants will be given capital grants of up to £5 million per device. In addition they will receive a hefty premium of £100/MWh for the electricity they feed into the national grid for the first five years of operation.
Funding will be limited to a total of £9 million for each developer - so as few as four devices could be supported. Developers have three years from 1 April to submit applications.
Wave and tidal devices will also be eligible for renewables obligation certificates - currently worth around £50/MWh.
The DTI will assess the economics of each device supported under the new scheme and also undertake "rigorous and thorough evaluations" of their environmental performance.
The Renewable Power Association called the scheme "a major milestone in the development of the sector" and tidal stream developer Marine Current Turbines said that the announcement will give further confidence to investors.
The BWEA welcomed the scheme as "a great step forward" for devices in an advanced stage of development. But it called for the fund to be renewed beyond the proposed three-year term.