£500m biomass plant: European backing for plan which would create 900 jobs

Plans for a long-awaited £500m biomass power plant on Teesside set to create close to 1,000 jobs have moved a major step forward.

The European Commission today approved Government support for MGT Power’s 299MW renewable energy facility planned for Teesport.

The Tees Renewable Energy Plant (Tees REP) was one of eight given an early contract under the Government’s Contracts for Difference scheme.

The scheme guarantees a fixed price for energy and The European Commission has now announced the state aid is in line with EU rules.

A commission spokesman said: “The commission concluded in particular that the project would further EU energy and environmental objectives without unduly distorting competition in the single market.

Tees REP received full planning consent in 2009, but bosses have struggled to reach financial closure amid changing UK regulations on biomass power schemes.

It is expected to cut 32 millions tonnes of carbon emissions over its 30-year life span.

The plant, expected to start operations in July 2018, will be able to generate enough energy to power 600,000 homes running exclusively on biomass.

Energy and Climate Change Secretary Ed Davey said: “Our renewable energy plans are driving new green jobs and green growth.

"By bringing together combined heat and power and biomass plant, MGT estimates that this plant will create 750 construction jobs and 150 permanent jobs on Teesside, as well as cutting Britain’s carbon emissions.

“Renewable electricity generation has been booming across the UK, and we are seeing record levels of renewable investment. Teesside is now well placed to be a major hub in this future green economy.’

Last October, Government support for the eight projects was strongly criticised by MPs.

The Public Accounts Committee said consumers had been left to pick up the bill for “poorly conceived and managed” contracts worth £16.6bn.

MPs said the Department of Energy and Climate Change had let down consumers by awarding contracts to five offshore wind projects and three biomass schemes early without competition.