A consortium behind a tidal-power project in the Pentland Firth has secured 20.3 million euros (£17.6 million) of European funding.

The Demotide scheme, which aims to create a 6MW turbine array next to Atlantis Resources’ existing MeyGen project, will begin construction later this year, with the first power expected to be generated in 2018.

AIM-quoted Atlantis hailed a “milestone event” in November, when the first phase of MeyGen generated electricity for the first time.

The Demotide consortium partners — Atlantis subsidiary Marine Current Turbines, marine-services group DEME, engineering firm Innosea and Queen’s University Belfast — said that the tidal-power project aims to demonstrate the technical and commercial viability of larger turbines, “further de-risking the industry and providing a robust path to significant cost reduction in the European tidal-power sector”.

Shane Donohue, lead project investigator for Queen’s University Belfast, said at a press conference that the Demotide operation “has the potential to transform the tidal-energy industry”.

Atlantis Resources chief executive Tim Cornelius added: “MeyGen is the world’s most high-profile tidal-stream project. We are delighted to be working with the European Commission and this world-leading consortium of marine renewable-energy experts to ensure that Europe remains at the forefront of tidal-power knowledge creation.

“This project will help the tidal-stream industry to demonstrate reductions in the unit price of electricity by increasing the energy yield per pound of investment. Demotide will set tidal power on a path to cost parity with offshore wind by 2020.”