SCOTLAND came another step closer to becoming the "Saudi Arabia of offshore energy" after Alex Salmond yesterday unveiled the first in a wave of lucrative contracts to build the world's "most advanced" tidal power machines in Scottish yards.
• Mr Salmond in Oslo for launch
The First Minister was in Oslo for the launch of a 4 million contract to build a prototype of Norwegian firm Hammerfest Strom's giant underwater turbine in Stornoway.
The lion's share of the contract for the 70-foot device has been awarded to Fife-headquartered Burntisland Fabrication (BiFab), which will carry out the work at its manufacturing yard at Arnish.
The 2m deal for BiFab will help secure the future of the Arnish operation after a third of its workers were laid off earlier this month.
Another Scottish manufacturer will shortly be named as the winner of a contract to build the machine's nacelle - the structure behind the turbine that houses the gears and other mechanical equipment. The blades will be built in the Isle of Wight.
ScottishPower Renewables, which owns a 17 per cent stake in Hammerfest but which will also be the main buyer of the firm's HS1000 turbines, intends to have the giant prototype up and running at the European Marine Energy Centre (EMEC) in Orkney by next year.
However it insists the 4m deal is only the first in a string of multi-million pound contracts for Scots firms as it intends to place a further ten of the devices off the coast of Islay by 2013, followed by a further 100 in the waters of the Pentland Firth by 2017.
Keith Anderson, director of ScottishPower Renewables, said: "To some extent this is just the tip of the iceberg. The jobs will grow exponentially as the industry develops."
Engineering experts say contracts like the one announced yesterday will spark a boom in marine energy manufacturing, which could turn into a multi-billion pound industry for Scotland. The Scottish Government estimates that by 2020 as many as 60,000 could be employed either directly or indirectly through the offshore renewables industry.
Although tendering for the more extensive Hammerfest contracts is yet to take place, sources say BiFab is "very well placed" to win the work.
John Robertson, managing director of BiFab, told The Scotsman the deal to build the first HS1000 will secure the Arnish operation's remaining workforce of 40. "The prototype will safeguard jobs at our Arnish facility.In the long term it's very important that we are seen as a major supplier for wind, wave and tidal technology."
BiFab employs around 550 in total and is developing another device, for Edinburgh-based Aquamarine Power, at its Methil yard.
The HS1000, which was developed by two engineers in the tiny Norwegian village of Hammerfest in the Arctic Circle, is heralded as the most technologically advanced device of its kind. It has been successfully operating in the choppy waters of a local fjord for the last six years.
Each one-megawatt machine will generate enough energy to power 1,000 homes. It is believed that when the Islay project is complete - subject to planning permission - it will allow the Hebridean island to achieve almost full energy self-sufficiency.
Salmond said Hammerfest's decision to build the device at Scottish yards represented a major vote of confidence in the country's manufacturing and engineering industry.
He said it was also proof that Scotland was on its way to becoming a world leader in the manufacture of tidal devices after losing out on the construction of wind turbines - an industry now worth around 18 billion - to the likes of Denmark and Germany.
Arctic outpost at the forefront of technology
ITS saloon-style bars are filled with Russian whalers and it may have a reputation for wild parties but the tiny Norwegian whaling town of Hammerfest on the edge of the Arctic Circle holds the key to what could become a multi-billion pound industry for Scotland, employing thousands of skilled engineers and offering a lifeline to the country's flagging manufacturing industry, writes Nathalie Thomas.
Despite its rough and ready appearance, Hammerfest has long had a reputation for being at the leading edge of technology. In the 1890s, it became the first town in northern Europe to install electric street lighting after two merchants saw the technology at the Paris Expo.
Almost 20 years ago two engineers developed a state-of-the art tidal device and the results caught the eye of major investors.
However, First Minister Alex Salmond yesterday admitted that several barriers remain before larger projects such as those planned for the Pentland Firth can contribute electricity to Scotland's grid. The Scottish Government is hoping that the 175 million fossil fuel levy that it has long campaigned for - and which is currently held by Ofgem under the orders of the Treasury - will be one source of funding. But where the remainder will come from remains uncertain.