Photo credit: ahisgett/Flickr

The U.K. government is looking out over the pitching whitecaps and sees pollution-free power—thousands and thousands of kilowatt hours for the taking. Anxious to grab the energy roiling just off the coasts, the government’s clean energy office just announced a £20 million pound ($31.7 million) contest to develop two pre-commercial projects that demonstrate the viability of wave or tidal devices to generate power.

Known as the Marine Energy Array Demonstrator scheme (MEAD), the government thinks that up to a fifth of U.K. electricity demand could be met by marine sources.

Wave energy is, of course, a form of wind energy (think storms), which is in turn an expression of solar energy. It is, however, fairly efficient, since waves lose little power moving around the ocean. Unlike wind and solar, the ocean never stops or slows.

Experts think wave energy eventually could produce power as cheaply as 4.5 cents per kWh, compared to 2.6 cents for coal and 3 cents for combined-cycle natural gas. Thanks to shale oil drilling, the cost of gas is falling through the floor, but wave energy often is right next to places that need it, like ports, and it doesn’t pollute.

Perhaps you are wondering how that works? In two simple ways: By harnessing waves as they move up and down or the tide as it comes in and out.

The latter form is quite old, dating back to 787 A.D., according to industry group the Ocean Energy Council. Known as “tide mills,” these system caught incoming tides in pools then let them drain back out over water wheels, like mills on a river.

Wave energy is a bit more complex. In that case, ocean swells push and pull on buoys, moving cables to turn a generator. Or, water enters a fixed column, pushing out air to spin a turbine.

A third version captures waves and works as a repetitive tide mill, filling a reservoir and then channeling the energy as the water falls out.

The U.K. expects the winning project to create at least 7 GWh per year and use at least three devices to generate power at full scale and in sea conditions. They should be operational by March 2016 to qualify, according to the U.K.’s Department of Energy and Climate Change.