A traditional childhood pastime could provide a breakthrough in renewable energy, after successful experiments in flying a giant kite at one of Europe's top research centres.

Scientists from Delft University of Technology in the Netherlands harnessed energy from the wind by flying a 10-sq metre kite tethered to a generator, producing 10 kilowatts of power.

The experiment generated enough electricity to power 10 family homes, and the researchers have plans to test a 50kW version of their invention, called Laddermill, eventually building up to a proposed version with multiple kites that they claim could generate 100 megawatts, enough for 100,000 homes.

Wubbo Ockels, a professor of sustainable engineering and former astronaut who leads the Laddermill project, believes kites are a cheap way to harvest the enormous energy in the wind at a kilometre or more above the ground, where winds carry hundreds of times more energy than on the ground. 'We need to use all the energy supplies that are offered to us by nature, we need diversity and kites are ... intriguing and fascinating,' he said.

Ockels is not alone. Google.org, the philanthropic arm of the Californian web-search company, invested $10m (about £5m) last year in a US kite company called Makani, one of the first awards as part of the organisation's Renewable Energy Cheaper than Coal programme.

The aim of both teams is to tap into high-altitude wind, which is an energy source that is more abundant and reliable than the ground-level wind on which normal turbines depend.

Ken Caldeira, a climate scientist at Stanford University's Carnegie Institution, has estimated that the total energy contained in wind is 100 times the amount needed by everyone on the planet. But most of this energy is at high altitude.

The blades of modern commercial windmills sit around 80 metres from the ground, where the wind speed is almost five metres per second. At 800 metres, however, wind speed rises to seven metres per second, potentially generating considerably more energy.

It would be virtually impossible to build a standard turbine to take advantage of the wind at 800 metres, but kites could easily get to these heights. Furthermore, thanks to the high-speed jet stream, countries such as the UK, the Netherlands, Ireland and Denmark are particularly suited to flying kites.

'Pretty much anywhere in the UK you could run a kite plant economically, but you couldn't run a wind turbine economically,' said Allister Furey of the University of Sussex, who develops computer control mechanisms to maximise the power generated from kites.

A kite generates power by pulling on a string attached to generators on the ground. When it has reached its maximum height, it is reeled back down to repeat the process.

Using computer models, Furey has worked out that flying kites in a figure of eight pattern means the air flowing over them travels even faster than the ambient wind speed. When a kite needs to be reeled in, it is angled so that it falls out of the sky like a glider, without the need for much power. Ockels's system uses these flying patterns to maximise the power the kites can generate. He is also looking at extending his basic prototype to use multiple kites that yo-yo: when one goes up, another goes down. Ockels estimates that kites could generate power at less than 4p per kilowatt-hour, which is comparable to coal power and less than half the cost of electricity from wind turbines.

'The first systems will be community scale that could power a large farm and sell some electricity back to the grid,' said Furey. 'Once the technical issues have been sorted out, you can scale them up to the level of a coal-fired plant. All you have to do is multiply the number of kites and you can have a farm as big as you want.'

There are many ideas for commercial-scale demonstration projects. An Italian company, Kitegen, has come up with a theoretical design for a system that could generate a gigawatt, as much power as a standard coal-fired power station. Its idea involves flying 12 sets of lines with four 500-sq metre kites on each.

A spokesman for the British Wind Energy Association welcomed the idea of devices that could harness the power of jet streams and higher-altitude winds, saying: 'There is a vast potential that could be harnessed with the technology now available.'

Nick Rau, energy campaigner at Friends of the Earth, agreed. 'We could easily supply our electricity demand from offshore, even with other demands on sea such as shipping, fishing and defence radar. These new [kite] technologies allow us to go further offshore and avoid other problems. We have an abundance of renewable energy and there are a lot of visionary technologies coming along so that, in future, the sky's the limit.'

How quickly technology will make it to market depends on how much investors are willing to put in. Ockels said that commercial systems could be operational within five years if the money was made available; otherwise the technology could languish in the lab for a decade or more.

'The Google prize is nothing compared to taxpayer money flowing into energy research. If you take sustainable energy seriously, the money flow to sustainable energy should also be serious.'