PARIS (Bloomberg) - EDF Energies Nouvelles SA, a unit of Europe's biggest power generator, and Renewable Energy Holdings plc. plan to start their first projects to harness wave power in Europe, Canada and Bermuda after a 59-percent increase in oil made the technology more competitive.

The company plans to develop projects in Bermuda, the Ile d'Yeu, off western France, Galway Bay in Ireland, and Ucluelet on Vancouver Island, Canada, Jannie Retief, chief operating officer of Renewable Energy Holdings, based on the Isle of Man, UK, said in an interview.

Wave energy is less developed than wind and solar power, which are attracting investment because of European Union policies to reduce burning the fossil fuels blamed for global warming. Renewable energies rely on subsidies because their production is more costly than burning oil, gas and coal.

"The rise in oil prices is working in favour of the development of wave power," Mr. Retief said by telephone on August 25.

The tidal projects are the first for the companies' joint venture using a technology developed in Australia called CETO, named for the Greek sea goddess. They want to turn most of the installations into commercial operations by 2011.

EDF Energies Nouvelles, the renewable-energy unit of Paris-based Electricite de France SA, France's largest power company, has invested four million euros ($6.2 million) in Renewable Energy, acquiring an initial 4.6-percent stake and rights for CETO technology in the Northern Hemisphere and the French island of La Reunion.

The CETO machinery is anchored to the seabed at between 15 and 50 metres (49 and 164 feet) underwater. Buoys just below the surface harness energy from waves, driving pumps bringing seawater ashore at high pressure. It can power onshore turbines to produce electricity or be desalinated.

An area the size of a football field is needed to generate eight megawatts of power, Mr. Retief said, adding that the projects will use demonstration units generating about 180 kilowatts each with nine being enough to provide power for 5,000 people.

"The trouble with wave power is that we have no idea whether it will work in a large scale," said Catharina Saponar, an analyst at Nomura Holdings. "As long as we haven't gone beyond pilot studies, we won't know the real capital costs."

Portuguese rates are about 240 euros a megawatt hour for wave power, 450 euros for solar energy and 100 euros for wind, according to Max Carcas, head of business development at Pelamis Wave Power Ltd., an Edinburgh-based company establishing wave farms in Portugal and the UK with a technology rivalling CETO. Utilities building new gas and coal-fired plants in Europe would need prices of 85 euros a megawatt hour for coal and 100 euros for gas, according to a Credit Suisse Group AG research note dated May 13.

"With time and investment, costs will go down," Mr. Carcas said in a telephone interview from Edinburgh on August 25. He added that at the beginning of the 1980s the price of wind power was five to 10 times higher than current rates.

Carnegie Corp., an Australian clean energy technology company, owns the CETO technology in the Southern Hemisphere and is planning commercial farms in Australia. The first pilot was set up near Fremantle, Western Australia in 2005.

Pelamis' 2.25-megawatt site in Agucadoura, Portugal, commissioned by Babcock & Brown Ltd., is billed by promoters as the world's biggest wave farm. It is not yet at full capacity.

The 140-metre long Pelamis machine is made up mostly of red steel tubes on the sea surface.

"The potential of wave energy is huge," EDF Energies Nouvelles chairman Paris Mouratoglou said on Friday in an interview, adding that the ability of equipment to withstand rough seas needs to be improved.

EDF Energies Nouvelles announced on Friday it is seeking to raise 500 million euros in a rights offer to speed up development of solar power. The company's installed power capacity currently comes almost entirely from wind turbines in Europe and North America.