Ocean Power Delivery's Pelamis system, a series of steel cylinders, began riding the waves off the coast of Scotland in August of 2004 and is sending sufficient electricity to the grid to power 500 households annually.

The 750-kilowatt wave energy conversion devices resemble metal sausage links that are connected by hydraulic pumps that pressurize oil to turn a generator and produce electricity, according Ocean Power Delivery. The devices are connected to a junction box on the seabed and feed electricity through a single cable to the shore.

Ocean Power Technologies (OPT) of Pennington, NJ, is currently building a one-megawatt wave energy system off the coast of Hawaii for the U.S. Navy, according to company founder and CEO George Taylor.

The OPT's PowerBuoy systems converts the up and down motion of the ocean, to electricity and feeds the energy via an undersea cable into the power grid. Taylor says the project will begin to generate electricity this year and will be completed by 2006.

The cost of the technology will go down as larger systems are developed, according to Taylor. The current technology can generate electricity at a cost of between 7 to 10 cents per kilowatt hour, depending on the quality of the waves, according to Taylor.

Mass producing the devices will drive down the cost over time, making them competitive with both on- and offshore windfarms, Taylor says, and to that end, the company is planning  test the technology off the coasts of New Jersey and Spain.

"Within five years we will be able to compete with fossil fuels by delivering energy at three to four cents per kilowatt hour," says Taylor.

AquaEnergy Group is trying to obtain the necessary federal permits to test its AquaBuoy technology in the Makah Bay of Washington state, according to Alla Weinstein, the president and CEO of the Mercer Island, WA, company.

Weinstein says the AquaBuoy uses a hose pump that expands and contracts as the waves go up and down, creating water pressure that is used to produce electricity.

"We could be in the water in less than 12 months after the permit is approved," says Weinstein. Her company, which this month received a $1 million investment from Irish renewable energy company Finavera, is seeking $3 million in federal funding to complete the demonstration project.