BORD Gais has formed a joint venture to develop the country's first underwater tidal farm and bought a small stake in renewable energy company OpenHydro.
Bord Gais will initially invest up to €2m in the Irish company, which wants to design and manufacture marine turbines for generating renewable energy from tidal streams.
OpenHydro, whose investors include One51 chief executive Philip Lynch and former Bloxham partner John Maguire, has raised €15.4m over the past 12 months from existing shareholders and new investors and is valued at about €150m.
The deal "will support our ambition to achieve early mover advantage in tidal energy development in this country", Bord Gais boss John Mullins said.
Mr Mullins has been spearheading the utility's move into renewable energy through a €10m fund to invest in innovative energy companies as well as buying several wind farms from SWS Natural Resources in late 2009.
Like many Irish companies involved in renewable energy, OpenHydro has so far enjoyed more success abroad than at home. The company agreed last year to co-develop a 200 megawatt tidal farm off the northern coast of Scotland and is looking at projects in the US, Canada, France and the Channel Islands.
It was the first company to generate electricity from tidal streams in Britain and then transfer the energy on to the national grid.
Europe is moving aggressively into ocean energy although it remains a largely untested technology. Wave power remains one of the most expensive forms of renewable energy, with a study by engineering and construction firm Black & Veatch concluding that wave energy can cost three times as much as other renewable energy sources.
Bord Gais and OpenHydro have not yet selected a possible site for a tidal farm off the Irish coast and have not secured a government permit. Any farm is at least a decade away.