The UK government is to ring-fence support for tidal stream energy projects in the fourth allocation round of the Contracts for Difference (CfD) scheme due to open on 13 December.
A total of £20m (€23.8m) a year will be ring-fenced for tidal stream projects.
The government said it hopes the funding will give the marine energy sector a chance to develop its technology and lower costs in a similar way to the offshore wind industry.
Full details of all CfD scheme announcements will be released tomorrow, with 12GW low-carbon electricity capacity on offer, more than the last three rounds combined.
This will bring the total funding for this allocation round to £285m per year.
Projects are currently in development in North-West Scotland, North Wales and the Southern coast of England.
Tidal energy has the potential to be a reliable source of generation in the UK, given the clockwork predictability of the tides, the government said.
Including this in the UK’s low-carbon energy mix will make it easier to match supply with demand, it added.
Business and Energy Secretary Kwasi Kwarteng (pictured) said: “As an island nation we are perfectly placed to capitalise on clean marine energy, building on our booming offshore wind sector which is now a British industrial success story.
“We hope to see marine energy follow in the successful footprints of other renewable technologies, where we’ve seen costs fall dramatically in recent years thanks to UK Government support.
“The investment today provides a major push for tidal power to become a key part of the next generation of renewable electricity projects needed to strengthen energy security as we work to reduce our dependency on volatile fossil fuels.”
Energy Minister Greg Hands said: “Our renewable energy auction scheme has been vital to the UK becoming a world leader in clean electricity generation and helping to bring down prices for consumers.
“Today’s dedicated backing for tidal stream power is opening up a new chapter for Britain’s coastal communities and advancing the possibilities for Britain’s marine energy sector to play a significant role in delivering the UK’s green industrial revolution.”
RenewableUK’s chief executive Dan McGrail said: “This is a major step forward for the UK’s world class tidal energy industry, allowing us to ramp up the roll-out of our cutting-edge marine technologies and increase the pace of innovation in the sector to become more cost-competitive.
“Ringfenced funding for tidal stream doesn’t just unlock private investment and secure green jobs – it also puts us in pole position to lead the global market in due course.
“That’s why we’ve been calling for a dedicated pot of funding for tidal power.”
Scottish Renewables director of policy Morag Watson added: “We are very pleased that the UK Government has recognised the pivotal moment that our marine renewables sector has reached.
“Ringfenced funding to get more projects in the water is essential and we hope to see further success for our Scottish tidal technology leaders as a result.
“With action to complement this from the Scottish and Welsh governments this can bring about a global success story for marine energy.”