Nicol Stephen said, 'The changes I am announcing today will unlock Scotland's marine powerhouse. Tens of millions of pounds of support will be available, with the potential for hundreds of millions to be invested in new wave and tidal projects around Scotland's shores.

'To date, in contrast to wind power, we have seen no significant commercial projects for wave or tidal power in Scotland. That has to change.

To deliver, we need to do more.

The cost of installing and producing energy from marine devices remains high. Development on a large scale will drive down costs and make it possible for these devices to power the engine of a sustainable Scotland.

The funding gap is real and needs to be bridged. That is what today's major announcement will achieve.'

A group of industry experts has advised the Scottish Executive that the potential exists to install over 1 GW of wave and tidal capacity in Scottish waters. This is roughly 10% of Scotland's total electricity production. The developments proposed would not only boost renewable energy output but also create jobs in the design, manufacturing, installation and export of these technologies.

The Executive's target is that 18% of electricity generated in Scotland should come from renewable sources by 2010, rising to 40% by 2020.

The Renewables (Scotland) Obligation requires power suppliers to derive from renewable sources a specified proportion of the electricity they supply to their customers. Eligible renewable generators receive ROCs for each MWh of electricity generated.

These certificates can then be sold to suppliers, in order to fulfil their obligation. Suppliers can either present enough certificates to cover the required percentage of their output or they can pay a 'buyout' price.

The Executive will now consider the amendments necessary to the Obligation which will allow additional ROCs to be provided for units of output from wave and tidal devices.

MJ Information No: 21128