Lockheed Martin (LMT -0.05%) is continuing to explore ways to "go green."

On Tuesday, the world's biggest pure-play defense contractor announced that has entered into a contract with Australia's Victorian Wave Partners Ltd. to begin development of "the world's largest wave energy project."

Victorian Wave has developed what it calls "PowerBuoy wave generation technology," in which buoys floating in the ocean bob up and down with the rising and falling of waves, creating mechanical energy that drives a generator to create electricity -- which is then conducted back to shore via an underwater cable.

In cooperation with Lockheed, Victorian Wave will build a network of buoys floating off the coast of Victoria, Australia, and capable of generating initially 2.5 megawatts of power, gradually increasing to 62.5 megawatts as the project progresses through three stages to completion. At this latter, advanced stage of development, the project would generate enough electricity to power 10,000 Australian homes.

Lockheed's role in the project will be to assist with manufacturing designs and produce components for the PowerBuoys, integrate them into a single system, and provide "overall project management." Although primarily a defense contractor, Lockheed Martin has some experience in such projects. Last year, Lockheed announced a similar ocean-going green energy project -- based on different technology however -- designed to produce 10 megawatts of power from "ocean thermal energy conversion" for use in powering a "green resort" in China.