A breakthrough scheme to generate marine energy off northern Scotland has been announced.

The UK crown estate, a government department that administers land held nominally by the head of state, and the Scottish government have unveiled a £4 billion project to build 10 wave and tidal power sites around the Orkney islands and the Pentland Firth.

The devices deployed will include relatively mature technology like the Pelamis ‘sea snake’, a hinged machine that generates power by undulating as surface waves pass along its length, and the SeaGen tidal machine, which works from tidal currents and resembles an underwater wind turbine, alongside more experimental projects. In total, the machines are expected to produce about 1.2 GWe of green energy.

The crown estate, which owns all the UK’s seabed out to 12 nautical miles, is saying that these will be the world’s first commercial wave and tidal power schemes (a ststement that is only approximately true as it ignores the existence of a near-commercial version of Seagen running in Strangford Lough, Ireland). It is expected to announce new marine power sites in other parts of the UK later this year.

Alex Salmond, Scotland’s first minister, said the announcement confirmed his prediction that the Pentland Firth region – where the north-east Atlantic meets the North Sea – would become the ‘Saudi Arabia’ of marine energy. The narrow sea channel has some of the most powerful currents and tidal surges in the world, with speeds up to 16 knots or 19mph recorded. The area also experiences some of the most energetic waves in the UK.

Salmond said some estimates suggested the waters could release up to 60 GW of power – 10 times Scotland’s annual electricity usage. Other studies have suggested that one-third of the UK’s total electricity needs could be met by tidal power alone.

“This is a huge milestone on the way to making that dream a reality,” Salmond said. “Today marks a major milestone in the global journey towards a low carbon future, with the commercial-scale deployment of marine renewables set to power our economies and help safeguard the planet for generations to come.”

As well as the £4bn to install them these schemes are expected to require up to £1bn of extra investment – from public sources – to build new national grid connections, harbours and other infrastructure in Orkney and Caithness.

The 10 projects, several of which have already had investment from a £22m UK government marine energy fund, are evenly divided between wave and tidal power station. The projects are being shared by three of the UK’s largest power firms, E.ON, Scottish and Southern Energy (SSE), which already operates the UK’s largest hydro schemes, and Scottish Power Renewables, a strong investor in windfarms.

Edinburgh-based Pelamis Wave Power, whose sea-snake device has been tested in Scottish waters already and is currently underging tests off the coast of Portugal, will have its own 50 MW site in the Pentland Firth and share three other sites with SSE and Scottish Power on the west coast of Orkney’s main island. Its new devices will each be 180 metres long and generate 750kWe. Another tidal machine, SeaGen, features two underwater propellers attached to a tall column anchored to the seabed. It will be installed by Marine Current Turbines off Orkney and at a 100MW site north-west of John O’Groats.

Less well known devices include a more powerful version of Aquamarine’s existing Oyster machine, in which a lever hinged at the ocean floor oscillates back and forth with tidal currents. It will be used for a 200 MW station with SSE Renewables, and its 200 1MW machines are expected to start producing power by 2015; and OpenHydro, a large underwater turbine fixed to the sea floor and made by Cantick Head Tida, will harness the fierce tides at a 200 MW site south of Orkney.

The marine announcement follows last month’s confirmation that £75bn will be spent developing a much larger amount of offshore wind power – at least 25GW – at nine sites around the British Isles, including two off Scotland.

Orkney Islands’ council is now planning to invest more than £20m to upgrade its harbours and port facilities to cope with the huge influx in industrial equipment, ships and workers involved in these projects, which will industrialise large areas of the coastline.