The Y1,800 (£13mln) project is in the straits of Naru Island and is being run by Kyuden Mirai Energy.
WATCH: Full interview: SIMEC Atlantis Energy's Tim Cornelius discusses major tidal, hydro and waste-to-power deals
Atlantis expects to deliver and install the tidal generator by late third quarter 2020, with completion of the demonstration in the first quarter of 2021.
Drew Blaxland, director of Atlantis’s ATES Division, said: “The Japanese market holds huge potential for us in terms of the future sale of turbine generation systems to deliver predictable power to hundreds of inhabited islands throughout the prefecture of Nagasaki.”
GHR agreement completed
Separately, Atlantis also announced it has completed the acquisition of the maintenance side of Scottish hydro business Green Highland Renewables for a nominal sum.
The power generating assets have been sold to an infrastructure fund for which GHR will provide management and maintenance on a long-term contract.
GHR already services more than 45 hydro schemes in the UK and annual revenue from the long-term contracts is expected to be about £4mln.
In 2018, GHR’s maintenance side made profits of around £200,000 with total assets £4.3mln.
The business is being acquired from Simec Energy, which has a 49.99% stake in SAE.
Atlantis originally intended to buy GHR in total including its power assets but Tim Cornelius, the chief executive, said that this deal is the right outcome for the business.
“We have acquired a world-class, cash flow positive, profitable hydro development, consulting and O&M business.
“GHR brings vast experience in project feasibility analysis, design, consenting, construction management, operations and maintenance and asset enhancement and optimisation.
“It provides us with more near-term cash to deploy on our flagship Uskmouth and MeyGen projects which will deliver the largest possible returns for investors. “
At Uskmouth, a waste-to-power project in Wales, Atlantis has also awarded the combustion system design and development contract to Japanese firm Mitsubishi Hitachi.
This will include large scale testing of the waste-derived pellets, which will be used as fuel in the converted Uskmouth plant.
These tests are required ahead of the negotiation and award of the Engineering, Procurement and Construction contract for the full combustion system.
Combustion tests will be carried out in Germany and Japan with the milling, combustion efficiency and emission tests expected in the second quarter of next year.
Atlantis wants to achieve financial close by the third quarter of 2020 with electricity to be produced in 2021.
David Taafe, Atlantis’s director of projects, said completion of the MHPS contract will be a key enabling step towards project finance for the project.
Tim Cornelius added:” Predicated on success at Uskmouth, we hope to work with Mitsubishi Hitachi Power Systems on many future projects, which will provide grid operators with stable, flexible generation and governments a solution for the perennial issue of the responsible disposal of non-recyclable waste."