Carnegie Wave Energy has successfully installed its electricity-generating underwater buoy technology off the coast of Perth, creating the first operational wave energy project in the world.

The so-called CETO technology - that converts ocean swell into renewable power and freshwater - has been operating successfully for the past week, according to the company.

The CETO 5 unit off the coast of Perth (left) and it's installation into the sea floor. Credit:Carnegie Wave Energy

The successful installation, a year later than originally anticipated, represents a crucial step for Carnegie to meet its goal of becoming cash-flow positive within five years.

Its main generators of cash last financial year were, in order, government grants ($14 million), research and development tax rebates ($2.3 million) and gold mining royalties ($1.3 million) it received as a leftover of its former incarnation as a mineral exploration company.