New technology harnessing wave energy could be the "holy grail" for providing electricity and drinking water to Australia's major cities, Industry Minister Ian MacFarlane said Thursday. The technology, developed with the help of more than 770 million dollars (636 million US) in seed funding from the government, works through fields of submerged buoys tethered to seabed pumps.

The buoys move in harmony with the motion of the passing waves, pumping pressurised seawater to shore to run turbines and pass through a desalination plant.

"The constancy of the waves even when the surface is dead calm means that you can build a base load renewable energy power station and that is really the holy grail for us, if you can produce renewable energy 24/7," Macfarlane told the Australian Broadcasting Corporation.

Drought-ravaged Australia is the driest inhabited continent on earth and the desalination of seawater is seen as one way of ensuring long-term water supplies for the big cities, which are all on the coast.

But with the process requiring large amounts of energy and Australia also trying to reduce the greenhouse gas emissions responsible for global warming, the technology is seen as providing a double benefit.

Australia was uniquely positioned to take advantage of the technology for both its power and water needs, he said.

All of Australia's southern mainland cities' current water needs could be satisfied by CETO units covering an area of 155 hectares (about 70 football fields) of sea floor at around 75 percent of the price of current desalination projects, the statement said.

In addition, the "Wave Farms" would generate around 300 megawatts of zero-emission power, enough for about 300,000 households.

"If the project gets the go ahead this year, then we will be able to start construction in 2009, with full capacity achieved in 2012," Ottaviano said.