The project, looking like an underwater wind farm, will take advantage of steady sea currents that flow through underwater canyon walls in the sound of Islay off the southwest coast of Scotland, PhysOrg.com reported Friday.
John Swinney, the Scottish finance secretary, said waterways around Scotland comprise nearly 25 percent of Europe's total tidal resources.
The project will use tidal turbines from Norwegian company Hammerfest Storm, which has had them running in an experimental operation in Norway for six years.
The Scottish project is expected to more than double the energy capacity of the existing grid to support more than 5,000 homes and businesses.
The tidal farm is expected to cost $65 million and help Scotland meet its stated goal of deriving 80 percent of its energy needs from renewable resources by 2020, PhysOrg.com reported.