The machine, named in 2007 as one of the 10 most outstanding technologies in the world by the United States-based International Academy of Science, has been beset with problems since its launch off Port Kembla more than three years ago.

But chief financial officer for energy company Oceanlinx, Bill Day said the team was now preparing to test the machine on an electricity grid.

"We are looking at it as more of a test unit at the moment," Mr Day said.

"It's almost like an offshore laboratory providing power to a loadbank."

"But shortly we will be looking to put in a low voltage grid to power local lights."

It was hoped the wave energy generator, which was invented by Dr Tom Denniss and cost about $5 million to develop, would produce enough electricity to power 500 homes and enough drinking water for 75,000 people.

But Mr Day said this benchmark was now in doubt. "We're not 100 per cent sure we'll achieve that goal," he said.

He said the generator had been operating off Port Kembla harbour for the past four weeks, powered by rough seas in the past week.

"In rougher weather, it's good for the machine up to a certain point. But anything too much and it doesn't like it," Mr Day said.

Meantime, the generator continues to attract overseas interest.