A Scottish company will deploy sausage-shaped tubes off Portugal to create the world’s first commercial wave power plant, providing electricity to 1,500 homes from 2006, a partner in the Scottish firm said on Friday.

Ocean Power Delivery (OPD) will build the wave farm about five kilometers (3.1 miles) off Portugal’s northern coast, near Povoa de Varzim, OPD’s Norwegian backer Norsk Hydro said.

OPD will deliver three wave power generation units with capacity of 2.25 megawatts to Portuguese renewable energy group Enersis for 8 million euros ($10.12 million), but the project could be expanded significantly, Norsk Hydro said.

OPD’s Pelamis P-750 wage energy converter is an elongated metal unit that looks like a big semi-submerged sausage, with hinged segments that rock with the sea, up and down and side to side, pumping fluid to hydraulic motors that drive generators.

The power produced by the generators is fed into underwater cables and brought to land where it enters the power grid.

A 120-meter (394-foot) long prototype has been tested since February 2004 in the Orkney Islands. Norsk Hydro, the energy and aluminum group, owns 16 percent of OPD.

“The farm will…displace more than 6,000 tonnes of carbon dioxide emissions that would otherwise be produced by conventional hydrocarbon-fueled power plants,” Hydro said. Carbon dioxide is the main gas widely blamed for global warming.

The deal with Enersis includes a letter of intent for a further 30 Palamis wave machines for a total of 20 megawatts before the end of 2006, subject to satisfactory performance by the initial installation, Hydro said.

“If all goes well, many additional sites producing up to a total several hundred MW could be developed along the coast,” Norsk Hydro said.

“We see this order as just the first step in developing the Portuguese market, which is anticipated to be worth up to a billion euros over the next 10 years,” OPD Managing Director Richard Yemm said in the statement.

OPD is also in talks with Scottish Power, which has shown interest in installing a wave farm in the UK, Hydro said.

By John Acher

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