A deal has been signed to sell the electricity generated by an underwater turbine off the Pembrokeshire coast.
Cardiff-based Tidal Energy Ltd, which is behind the DeltaStream project on the Ramsey Sound sea bed, has signed a 12-month deal with UK firm EDF Energy.
The device will generate energy from tidal currents on the sea bed.
It is currently being installed and is expected to begin generating electricity for Welsh homes in the coming months.
TEL managing director Martin Murphy said: "DeltaStream is not just about proving a new, innovative technology - it is about proving that tidal power can make a real and lasting contribution towards the UK's renewable energy targets and energy security.
"Taking the first steps to commercialisation, by securing a buyer for the electricity generated, is essential to that.
"We are proud that this cutting-edge project is, once-again breaking new ground, and ensuring Wales is playing a central role in the race to develop the UK's significant tidal resources."
Dan Brimelow, of EDF Energy, said technologies like tidal power helped improve the diversity of electricity supplies and reduce reliance on imported energy which was good for the country's future energy security.