The world's first wave-energy farm connected to the electricity grid has been switched on in Western Australia.

The project by Perth-based Carnegie Wave Energy will provide renewable electricity for Australia's largest naval base, HMAS Stirling, on Garden Island.

The same system is also used to run a small desalination plant, which will be used to supply up to one-third of the base's fresh water needs.

Carnegie has placed buoys beneath the ocean surface off Garden Island and when waves move the buoys, it creates hydraulic pressure that is delivered to a plant onshore to be converted to power for the base.

The project cost about $100 million and has two operating units, with a third to be added, for what will be a three-megawatt project.

Carnegie CEO Michael Ottaviano said the units provided enough energy to power the equivalent of between 1,500 to 2,000 households.

"It's the only operating wave power station in the world," he said.

"We're really excited to be putting power into the grid to supply HMAS Stirling on Garden Island.

"It's a culmination of about 10 years work, about $100 million in funding, most of it from shareholders, and also with the support of the Federal Government and the State Government of Western Australia, and the Department of Defence."

Challenge is about 'scale and cost'

Mr Ottaviano said it was not easy to secure financing.

"It's never a linear path to get to a point like this when you're developing a new technology," he said.

"Eight, nine years ago we were an idea in need of about $100 million and some serious innovation, and that's really what we've been able to deliver.

"Through the ups and downs - we've had the global financial crisis in the midst, we've had renewable energy supported, not supported, and in amongst all that, the team has been able to deliver a world first."

The CEO said wave energy provided a very reliable source of energy 24/7.

The buoys are anchored to the seabed off Rockingham as part of the wave energy plant. ( Supplied: Carnegie )

"The challenge from here on is really about scale and cost. We need to make the technology bigger, we need to make our projects bigger because that's what allows you to get your costs down," Mr Ottaviano said.

"If you built a one-megawatt coal-fired power station, it would be the most expensive... in the world.

"Likewise with wave energy - we need to be building 20 megawatts, 50 megawatts, 100, 200 megawatt power stations and we would be cost-competitive.

"We've specifically designed the technology to be scalable and one of the main aims of this project was to show you could plug multiple wave units together and have them operating in sync.

"So, if you can do it with two or three, and it's actually harder to do it with two or three than it is with 100 because the variability is quite high - if you've got 100 units, it's much to easier to control and the footprint's very small."

He said the WA site was chosen specifically.

"Our wave resource in Western Australia is the best in the world, and theoretically the resource that hits our coastline every day could power the state 10 times over," Mr Ottaviano said.

"Across the country, it's the best in the world as well, and the resource there could power the country twice over, so the opportunity is huge and Australia should be a world leader in this particular technology because we've got the best resource."

WA's Energy Minister Mike Nahan said the plant could operate in a variety of conditions.

"This technology... can operate in a variety of water depths, swell directions and seafloor conditions and can generate power for both onshore and offshore consumption," he said.

The WA Government had contributed $9.96 million from its low-emissions energy development fund towards the development of the technology and the project.