02 March 2011, 09:25 BST
The Carbon Trust has awarded £350,000 funding for Minesto UK to carry out operational testing for its tidal power technology in Northern Ireland.
Minesto's Deep Green technology has the potential to generate energy from much slower currents than any existing tidal technology.
The kite-like device is tethered to the seabed and is steered by a rudder, which allows it to adjust the speed at which water enters the turbine.
If the testing of the prototype is successful, the company plans to install enough of the devices around the coastline by 2020 to produce 530GWh of power.
The funding provided by the Carbon Trust will enable Minesto to gain site permits, test survivability and develop a method of calculating the cost of generating energy from the device.
Benj Sykes, director of innovations at the Carbon Trust, said: "Minesto's Deep Green is a very exciting technology as it could provide a step change reduction in the cost of tidal energy and open up swathes of the UK's coast to generating electricity."
A recent study into offshore renewables commissioned by the Energy Technologies Institute discovered vertical axis turbines deployed offshore could produce cost savings in some circumstances.
Source: Low Carbon Economy