The project is nominally sized at 5MW and will enable PG&E to test a number of wave power technologies. More than a dozen wave power companies have to date contacted PG&E to express interest in joining the project.
PG&E expects to receive a licence from the Federal Energy Regulatory Commission by June 2011, according to the Reuters news agency.
The US state of California has set itself the target of getting 33% of its electricity from renewable sources by 2020.