An agreement to sell electricity generated by a tidal energy scheme in the Pentland Firth has been signed, it is understood.

The developers, MeyGen, said it had signed a 10-year Power Purchase Agreement (PPA), with energy firm SmartestEnergy.

MeyGen, which is owned by Atlantis Resources, said the PPA agreement could be worth more than £50m over its lifetime.

Under the first phase of the scheme, four 1.5MW turbines will be installed on the seabed, but it is hoped the scheme will eventually consist of up 269 such turbines.

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News of the power deal comes just days after Atlantis confirmed it had secured a £50m funding package for the project from a number of organisations, including the Highlands and Islands Enterprise, the Scottish Government, the UK Government and the Crown Estate.

Dan Pearson, MeyGen Chief Executive, is quoted as saying: "This is an important step forward for MeyGen and its backers. The agreement with SmartestEnergy will secure the long-term revenues which will demonstrate the commercial viability of the project and also highlight the wider potential of tidal stream generation to become a significant industry."

(JP/IT)