Australian companies Mako Tidal Turbines and Kleinhardt have agreed with authorities in Papua New Guinea to develop a business case for an electricity grid underpinned by tidal energy.
The co-operation agreement with the autonomous Bougainville government will involve the establishment of a demonstration site to test the viability of a new grid, which would service the town of Buka.
Under the agreement, Sydney-based Mako will survey the Buka Passage for its tidal energy potential and will establish a demonstration site in conjunction with local businesses.
Cairns-based Kleinhardt, meanwhile, would commence preparation of a business case for the upgraded grid.
"The Buka Passage contains enormous energy potential," Mako chief executive Douglas Hunt said.
"In fact, our preliminary estimate is that at any one time up to 35 million tonnes of water is flowing rapidly through the passage between Buka and Bougainville Islands."