Alex Salmond's crisis-hit £10m wave power prize 'should be scrapped'

Earlier this year it was revealed none of the competitors could meet the qualifying criteria by the 2017 deadline.

Despite that, the Scottish Government remained committed to awarding the prize, though it has now emerged that new rules to make it winnable will not not be drawn up until next year, just months before the close of the contest.

Of the four remaining competitors, one, Aquamarine Power, called in administrators last month.

A fifth, Pelamis, pulled out after going into administration a year ago.

Murdo Fraser, the Scottish Conservative MSP, said the prize had become a "white elephant" and called for the money to put to better use.

However it has been defended by Scottish Renewables, the industry body tasked with redesigning the contest, which said it would drive innovation in the offshore renewables industry.

When he launched the prize seven years ago, then-First Minister Mr Salmond described Scotland as "the Saudi Arabia of tidal power" and claimed it had the potential to match the wealth created by North Sea oil.

Originally, the prize was to be awarded to the company which generated the most electricity above a minimum thresh-hold of 100 gigawatt hours.

The power had to be generated over a continuous two year period within the challenge period running from June 2012 to June 2017.

But in a sign of how far the competitors are from achieving the target, the firm seen as the frontrunner has yet to generate any power at all.

Edinburgh-based MayGen, which is installing underwater turbines in the Pentland Firth, is still constructing onshore facilities and will only begin generating power next year.

Lindsay Roberts, Scottish Renewables's offshore renewables policy chief, said: "A prize will help generate innovative change in the industry.

"There is a will and determination in the industry to compete for a prize but we realise we need to restructure it.

"We've been consulting with our members at the request of the Scottish Government

"We all still think a prize would be a really good idea and the Scottish Government is quite happy to continue to support it.

"We need to rethink the parameters to make it more achievable. That's far from the prize being dead."

She added: "We have not been led to believe there should be any changes to the prize money.

"All options for redesign are on the table.

"I don't think we would be happy to see the value of the prize reduced but all these decisions are up to the Scottish Government."

It is understood one option being considered is to award a number of smaller cash prizes recognising difference achievements, rather than a single £10million payout.

Mr Fraser, the Scottish Conservative economy spokesman, said: "It appears that yet another of Alex Salmond's big ideas is being exposed as little more than a PR stunt.

"Rather than wasting £10million on a jackpot nobody is going to win, the Scottish Government would have been far better off focussing on an energy policy which boosted research and development in renewables and helped firms develop projects into a commercial concern.

"That, however, would not have generated the headlines Mr Salmond wanted.

"It's time the SNP government binned this white elephant and put this money to better use."

A Scottish Government spokesman said: "We are absolutely committed to the developing marine energy sector which has the potential to offer significant economic and environmental benefits.

"The Saltire Prize Challenge Committee is considering options for reshaping the prize to better reflect the circumstances of the wave and tidal sectors.

"Scottish Renewables has convened industry representatives and other marine energy experts to discuss revised prize options which will be considered by the Committee in the new year."