Windflow says it has signed a heads of agreement with North Fish in Scotland to jointly develop the first site using a Windflow 500 turbine in Britain.
The agreement is conditional on certain matters being confirmed within the next five months.
This first site is close to Lerwick on the main island of Shetland and installation is planned for summer next year.
North Fish will use the wind-generated electricity to operate a plant to produce carbon neutral biofuel.
Once the project has been successfully developed and commissioned, it is expected North Fish will exercise its right under the agreement to acquire Windflow's interest in the installed turbine.