Two companies operating in the Western Isles have been awarded �3.7m to develop wave power.

The cash boost was announced by Energy Minister Brian Wilson.

Wavegen and Tidal Hydraulic Generators Ltd (THGL) received the grants as commercial projects intended to produce electricity for the National Grid.

Inverness-based Wavegen was awarded �2.1m to harness wave energy from a new prototype.

We need to develop the technology to bring down the price of power David Langston Wavegen

The firm installed the world's first commercial wave machine on the Isle of Islay.

And THGL, which operates out of Broad Haven in Pembrokeshire, received �1.6m to develop and test a tidal stream prototype which could be deployed in areas of fast tidal flow around the world.

Mr Wilson said: "Wave and tidal power have huge potential to supply a significant proportion of the country's future energy needs.

"That is why I am particularly keen to build on the success of the solitary existing wave power station which is on Islay.

"I also hope that there will be direct economic benefits to the islands through the construction work taking place at the newly re-opened Arnish yard, although this is a commercial judgement for Wavegen."

Energy targets

David Langston, the business development manager at Wavegen, said work was progressing on the design of the prototype for the Western Isles.

He added: "We need to develop the technology to bring down the price of power.

"The only wave power plant that is operating and providing power to the grid is our plant on Islay."

The UK Government is committed to supporting the development of new and renewable energy technologies to meet its target of 10% of electricity supply from renewables by 2010.