A £10 MILLION international contest to build Scotland's first commercial wave or tidal energy system is dead in the water after industry insiders admitted none of the competitors is capable of winning it.
The Saltire Prize, which was launched to great fanfare by Alex Salmond in 2008, requires contestants to operate continuously for two years, generating at least 100 gigawatt hours of electricity by June 2017.
But with the deadline in sight, industry sources have admitted none of the four competitors is sufficiently advanced to meet the qualifying criteria.
The firm seen as the frontrunner, MeyGen Ltd, will spend most of this year building an access road and other onshore works around the village of Mey, Caithness.
The first underwater turbines will only be installed in the second half of next year, weather permitting, leaving insufficient time to meet the challenge.
Other competitors have also privately admitted they not in a position to land the £10million prize.
The revelation is a blow to Scotland's nascent marine renewables industry, which has failed to develop as quickly as hoped when the former First Minister announced the prize during a trip to New York.
It also comes as an embarrassment to the Scottish Government, which promoted the Saltire Prize as a "central part" of its offshore energy strategy.
Mr Salmond has described Scotland as "the Saudi Arabia of tidal power" and claimed it has the potential to match the wealth created by North Sea oil.
Four companies are officially in the race.
Aquamarine Power is installing its Oyster wave pump device off Lewis, while MeyGen, ScottishPower Renewables andWest Islay Tidal are deploying underwater tide-driven turbines at separate locations around the coast.
A fifth competitor, Pelamis, went into administration last November.
A source close to Aquamarine Power - which halved its workforce in December - said: "It's been well known in the industry for some time that the criteria of the Saltire Prize would be very hard to achieve and the only project that has a prospect of generating that amount of power is MeyGen.
"Even with their device, the timescales would be particularly challenging.
"The ambition will be achieved, it's just not going to be achieved in the timescale.
"It seemed a reasonable ambition when the prize was launched but it is proving longer and harder to achieve than first anticipated."
The source added: "The history of every new industry is that you have setbacks and learn from them."
Dan Pearson, the chief executive of MeyGen, said the Saltire Prize was "a significant challenge" but insisted: "Still, we continue to relish the opportunity to compete and hopefully we will be successful."
However a source close to the company indicated its work timetable would not allow the criteria to be met. "The construction schedule is what it is," the source said.
A ScottishPower Renewables source said the company's machines were still at the testing stage and added: "I don't think we are hopeful of winning, let's put it that way."
Tens of millions of pounds of public money has been poured into the development of wave and tidal power.
MayGen has raised £50million, with much of that coming from sources including Scottish Enterprise and the UK's Department of Energy and Climate Change.
Earlier this week the Scottish Government handed £14million to a new industry body, Wave Energy Scotland, which is now funding the team behind Pelamis.
Niall Stuart, chief executive of industry body Scottish Renewables, said: "The Saltire Prize is one of the many initiatives that has contributed to Scotland becoming recognised as the 'go-to' place for wave and tidal developers from across the globe, and ensured a huge amount of international focus on our world-leading wave and tidal industry.
"The goal was always very challenging - that was the point. However, the industry has not developed at the pace that many of us had hoped, and it now looks unlikely that there will be anyone in a position to generate the amount of electricity required to win the current prize."
A Scottish Government spokeswoman said: "The Saltire Prize Challenge Committee is now considering options for reshaping the prize to better reflect the circumstances of the wave and tidal sectors - however, the prize will still be awarded.
"The marine renewables industry has taken momentous steps forward since that date, but the path to commercialisation has proved highly challenging."
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