Adelaide-based Tenax Energy has signed an agreement with the Northern Territory Power and Water Authority to set up a demonstration wave power plant.

It hopes to be transmitting electricity in to the Territory grid by 2015 and to reach commercial supply by 2020.

The power plant will be developed in the Clarence Strait, off the Tiwi Islands, which is one of the largest tidal resources close to a major Australian city. The potential energy generation of the strait each day is sufficient for more than 200,000 homes – more than the total in the Northern Territory.

Tenax is proposing to install more than 450 generators across 1,690 hectares of the seabed and connect then to the Northern Territory electricity grid by 2 kilometre-long underground cables.

Tenax is also working to establish tidal energy sources in Tasmania and Victoria