Plans for a massive offshore deep water wind farm in the Moray Firth have gained £6m in government funding.
Artist's impression of the offshore turbines
The project will see two of the largest turbines in the world installed next to the Beatrice Field, to test the feasibility of a 200-turbine wind farm.
It is being run by a Scottish based consortium led by oil firm Talisman and Scottish and Southern Energy (SSE).
The £3m Scottish Executive and £3m DTi backing was announced by First Minister Jack McConnell in Aberdeen.
If the £24m pilot proves successful, a full 200-turbine wind farm will be built 12 miles offshore.
It would be capable of generating one gigawatt of electricity, enough renewable energy to power the city of Aberdeen.
Speaking at a dinner in the city, Mr McConnell said it could have the potential to take offshore wind farm technology to a new level.
He said: "Utilising the skills and techniques already there in our oil and gas sector can make us world leaders in a whole new generation of renewable energy technologies, including offshore wind, wave and tidal.
"We are committed to extending the life of our oil and gas industry, and one of the ways to do this is through diversification."
He added that the project should see the first electricity being generated in 2006 and offer opportunities for jobs and construction across Scotland in the future.
Talisman president Dr Jim Buckee said: "The existing infrastructure at Beatrice offers a unique opportunity to test the feasibility of wind farms in water depths of 35 to 45 metres, while optimising the value of our existing facilities.
"Initially the two turbines will provide electric power for Beatrice and, if successful, we will evaluate a large-scale commercial project."
During the five-year period of the pilot project, Talisman and SSE will collect performance data, look for ways to reduce costs and develop operating procedures.
SSE chief executive Ian Marchant said: "Our participation in this demonstrator project reflects our belief in the long-term opportunities that renewable energy offers and confirms that Scotland and the rest of the UK is well positioned to become a leader in this field."
The scheme also has backing of 6m euros from the European Commission.
The Scottish Green Party welcomed the executive and DTi support for the pilot project but said more needed to be done.
Green energy spokeswoman Shiona Baird MSP said: "The two governments can muster only £6m for offshore wind - a pitiful amount compared to the billions spent on nuclear power over the years."
Talisman also announced a new £320m oilfield development in the North Sea.
The Tweedsmuir oilfields, 100 miles north-east of Aberdeen, are among the biggest to be developed in recent years.
The Tweedsmuir and Tweedsmuir South fields will be developed using subsea structures and oil piped back to the Flotta terminal in Orkney.
A company spokesman said the project would help sustain existing jobs and infrastructure, with production expected to start in 2006.