* Scheme will support up to two projects
* Winners will be announced later this year
LONDON, April 5 (Reuters) - Britain launched on Thursday a 20 million pound ($31.75 million) contest to support up to two pilot wave energy projects, as the government hopes to scale up the cleaner technology to power more homes and businesses and curb carbon emissions.
Marine power has the potential to provide up to 20 percent of current electricity demand in the United Kingdom, as well as help the country reach its climate targets and support thousands of jobs, the Department of Energy and Climate Change said.
"This scheme will help move marine power to the next stage of development, the demonstration of a number of wave and tidal devices in array formation out at sea," Energy and Climate Change Minister Greg Barker said in a statement.
Companies and organisations across the UK will be able to bid for a share of the 20 million pound prize that was first announced last summer. Winning bids will be announced by the government towards the end of the year.
Lobby group RenewableUK has estimated that at least 120 million pounds is needed for the UK industry to reach full-scale deployment.
Every pound of public funding in the UK has unlocked 6 pounds of private investment, but more is needed, according to the lobby group.
The technology, like other renewables such as solar and biomass, needs government funding to reach commercial scale and then subsidies after that as it grows to be more cost efficient.
$1 = 0.6300 British pounds Reporting by Jeff Coelho; editing by James Jukwey