SeaGen works like an underwater windmill, with the rotors driven by the power of the tidal currents rather than wind.

Strangford Lough, where the turbine has been rooted, has among the strongest tidal currents in UK and Irish waters.

"This is an important milestone for the company and indeed the development of the marine renewable energy sector as a whole," MCT's Managing Director Martin Wright.

Once fully operational, SeaGen will be able to generate up to 1.2 megawatts, which is enough carbon-free electricity to supply about 1,000 homes. Tides are created by the moon and sun's gravitational pulls on the oceans, combined with the centrifugal force of the earth's rotation.

Lying in the North Atlantic, the British Isles have some of the strongest tidal currents in the world, together with some of the strongest and most reliable winds to drive offshore wind turbines.

The British government is hoping to exploit these natural advantages to help it reach tough European Union renewable energy targets but planning and grid connection problems have frustrated the rapid growth of wind power so far.

MCT has plans for a 10.5 MW project off the coast of Anglesey, north Wales, which it expects to commission by 2012. (Reporting by Daniel Fineren, editing by Anthony Barker)