Further reading:
Blue Energy A company developing tidal and current energy generation technology.
WaveGen A company with a passion for wave generated energy.
Ocean Power Delivery Limited Making energy from waves in Europe.
All about the tide Tidal energy fact sheet.

If you live anywhere near the coast you know this simple fact.  There is a lot of freaking water on this planet.  In fact there is about 321,000,000 cubic MILES of water in the oceans of the world.  This water is constantly sloshing around from one side of the planet to the other.  It is being pulled by the gravity from (in order of importance) the moon, the sun, and every other particle of matter in the universe.  So if you are lucky enough to live near the beach you will notice that at certain points the tide is "low" meaning the water has sloshed off to someplace else, and at other times it is "high" meaning the water is all sloshed up where you are.  So what can we do with all this water moving around?  Moving water is a great source or energy.  In the old days water wheels were used to grind up grain.  Today water is used in huge dams to turn turbines and make electricity.  But can we do anything with tidal or wave energy?  You bet!

TIDAL ENERGY

           Water has this really nifty feature.  It doesn't compress like air does.  This means several things.  For one you can fish with TNT (the water doesn't compress when the TNT blows up, but the fish do), but more importantly it means that water is a much better carrier or energy than air.  When we use wind turbines to catch air to make electricity a whole bunch of wind has to blow past before we get energy, with water (because it cant compress) you are getting a much more potent energy carrier.  An underwater turbine with blades spanning 30 feet will generate approximately as much power as a 300-foot windmill will generate in air. 
            So how do we get all this good energy.  Basically there are two methods.  One is to build a big huge dam in a thin inlet, and trap the water as it flows in and out.  The water is channeled through tiny opening that have turbines in them.  Sort of like a dam on river, but one that goes both ways.  The biggest one of these was build in France in 1966.  These structures have several draw backs.  One is they disrupt the natural ecosystem a lot.  Two is that they only run when the water is running.  But this isn't so bad as it gives us ten hours a day or production (tides are very predictable).  The other is to build underwater turbines.  These work just like wind turbines only they run in water.  The benefits of these are that they can be built in "farms" and because they are underwater they don't interfere with boats.  Because they are not build in a large dam they also have a much smaller impact on fish and other wildlife. 
            There is also a hybrid idea.  What if you found a place where a current (underwater river) flowed between two islands.  Then you could build an underwater structure like a dam, but comprised fully of underwater turbines.  This is just what the Philippines is doing.  This structure would allow fish to swim around it (cage in turning blades so as not to be a hazard), and because the current flows 24/7, well that's a lot of energy. 

WAVE ENERGY

          Every been surfing?  Well if you have then you know just how much energy is in a wave.  Waves are caused by wind and tides.  They are places where there are waves almost all the time.  Any time you have moving water you have lots of energy.  There are ways to harness this energy.  One way to to build a structure on shore.  This structure will capture waves as they enter and use the force of the wave to push air through a turbine and create electricity.  Another way to to create a device that sits on top of the water and uses the up-down motion of the wave to move a generator. 

BENEFITS OF TIDAL ENERGY

• Clean, produces no emissions or harmful byproducts. 

• Renewable, so long as we have a moon a sun and some water we will have tides.

• Predictable, tides can be predicted almost to the minute, this will make there integration into power grids very easy.

• Lots of room to build them, there are millions of miles of coast line in the world.

• Eco-friendly.  Tidal systems can be built with very little ecological damage.