A £500m large-scale biomass power plant is to be developed by MGT Power in Teesside as part of the government’s low-carbon strategy.

The 295MW Tees Renewable Energy Plant will have enough capacity to meet the electricity needs of around 600,000 homes in the region. According to MGT Power, its development will create 600 construction jobs, in addition to 150 permanent jobs during the station’s lifetime and 300-400 jobs indirectly.

Chris Moore, director of MGT Power, said: ‘The government’s consent is welcome news as we are at an advanced stage with forestry establishment for fuel sourcing and power-plant procurement. We can now mandate our banks, conclude the financing and reach agreement with our preferred technology bidders. We are moving towards an early construction start with a high degree of confidence.’

The plant is expected to enter commercial service in late 2012 and will use 2.4m tonnes of woodchips per year to provide an electricity supply equivalent to that of a 1,000MW wind farm. This will account for 5.5 per cent of the UK’s renewable electricity target and will save 1.2m tonnes of CO2 per year.

Moore added: ‘Other similarly sized biomass plants are proposed in other parts of the country but our Teesside project is currently two years ahead of the pack and likely to be one of the first to be operational. It comes at a time when replacement UK energy-generation capacity is urgently needed.’