Under the deal, Hammerfest UK will utilise a form of tidal stream power using an underwater turbine. Each device will generate around 1MW and in future arrays of multiple devices are anticipated which could generate 50MW to 100MW each.
The agreement includes demonstration of a full-scale prototype in Scottish waters. Manufacture of the prototype will commence in 2008, with installation during 2009.
The technology has been extensively tested at 300kW scale over a three year period, in tidal waters at Hammerfest.
Keith Anderson, managing director of ScottishPower's renewables business, said: 'This is another milestone in our development of renewable marine energy, and follows the announcement of our Orkney wave project which will be the largest in the world.'
Hammerfest's two largest owners are Statoil, the Norwegian oil and gas company, and Hammerfest Energi, a power utility located in northern Norway.
