A handful of tidal-power plants dot the world, and most of them are sprawling facilities that impound incoming water in estuaries, block shipping, and disrupt marine life. But 50 meters under the sea, at the bottom of a remote Norwegian strait, the world's first unobtrusive, grid-connected "watermill" will soon produce power for the world's northernmost town.

It looks like a wind turbine, except it's anchored to the seabed. Tidal currents moving at 2.5 meters per second spin three 10-meter fiberglass blades, generating power that is sent to the grid via a cable. When the tide turns, the blades twist 180 degrees, reversing the direction of the watermill's rotation. Electricity from the 200-ton apparatus is expected to hit the grid this spring, providing enough power for between 40 and 50 houses. "This is the first mill-type system hooked up to the grid," says Anthony Jones, a San Francisco-based ocean-energy consultant. "I'm betting that they'll be quite successful."

That's partly because Hammerfest Strom, the company behind the project, tapped ocean-engineering expertise from partners that include Zurich, Switzerland-based ABB and Statoil in Stavanger, Norway. Project leader Bjorn Bekken says a modular design allows replacement of broken parts, while redundant hydraulics and control systems should minimize service calls. Eventually, repairs will be performed by remotely operated vehicles similar to those used on offshore oil platforms.

The prototype is the first and smallest of 20 mills slated for the Kvalsund Strait-near the town of Hammerfest, 1,360 kilometers north of Oslo. They will supply enough power for 800 to 1,000 houses within a few years. Although it is twice as costly as wind power right now, "the watermill has just started its development, and I think it will be competitive with the windmill within 10 years," says Ole G. Dahlhaug, an engineer at the Norwegian University of Science and Technology in Trondheim, Norway.