A wave energy prototype has begun generating electricity during trials in Galway Bay.

The device developed by Northern company Wavebob Ltd produced its first power on the Spiddal test site over the past weekend. It has been described by Wavebob chief executive Andrew Parish as a "giant leap forward" for renewable energy in Ireland.

A second device developed by Ocean Energy Ltd of Cork is expected to produce power by the end of this week, according to the Marine Institute.

The institute and Sustainable Energy Ireland (SEI) have been working with a number of companies on the wave energy trials in Galway Bay since last year.

Wavebob Ltd, which was established in 1999 to work on "blue power", has invested more than €4 million in research and development over the past six years.

It has been working with partners Chevron, Georgia Tech Research Institute, University College Cork and NUI Maynooth.

It had mixed experience last year with its trials on the Spiddal test site, while Ocean Energy Ltd weathered some of the most severe storms of this past winter.

Wavebob says that its device will be capable of producing more than a megawatt of electricity, or enough power for 1,000 homes.

"As an island in the middle of the energetic Atlantic Ocean, Ireland can be to wave energy what Saudi Arabia is to oil. The more we exploit this unlimited natural resource, the better it will be, not just for the global environment, but also for the Irish consumer's pocket," Mr Parish said.

He believes the firm can contribute significantly to the Government's target of 500 megawatts' production through wave energy, installed by 2020.

Under the Government's ocean energy strategy, the cost, reliability and efficiency of several wave buoy models will be tried out on the Spiddal site before the deployment of a pilot of the full-scale device in 2008.

David Taylor of SEI believes that the market for ocean energy may be worth up to €2 billion for the Republic by 2025.