Openhydro, the Louth-based tidal energy company, looks set to lose one of its most promising pilot projects after the US Department of Energy pulled funding for the estimated $37 million scheme in Snohomish, off the US west coast in Washington state.

The project, eight years in the making, was to have involved dropping two of Openhydro’s massive tidal turbines into the ocean and connecting them to the grid.

It was to be jointly funded by the DoE and the local Snohomish Public Utility District, and operated by Openhydro, founded by Brendan Gilmore.

Above projections

The project was licensed earlier this year by the

Federal Energy Regulatory Commission

. However over the summer, officials told local papers last week, it became evident that costs had spiralled beyond initial projections of $20 million.

The DoE had fixed its contribution at $10 million. Local Snohomish officials approached the department last week saying they were prepared to put up another $8.5 million, and asking the DoE to match the funding. The department refused last Friday, however, and it is now expected that the project will be pulled.

Openhydro, which maintains its main facility in Greenore, Louth, is majority controlled by the French naval defence firm DCNS, which took a 60 per cent stake in 2011. That deal valued the company at €170 million.

It is believed to be mulling a €50 million cash call this year to fund its development.

Its shareholders include Mr Gilmore, who founded the company in 2004, as well as One51, the ESB and clients of Davy and Goodbody stockbrokers.

Openhydro was believed to have been looking at a flotation, but it was reported this summer that Rothschild had advised against it.