Drax Group, owner of Britains largest coal fired power station, is planning to build three large biomass plants across Yorkshire and North Lincolnshire costing £2 billion.
The firm said that the facilities in Hull, Immingham and probably the North Yorkshire village of Drax will have the capacity to produce 900MW of electricity for the national grid.
Biomass plants generate electricity by burning a range of fuels. The company said that 50 different types of biomass material could potentially be used for the plants including energy crops, woodchips and crushed olives. But Drax has not confirmed what materials it will be using.
Once the plants are up and running they will have the potential to supply at least 15% of the UKs renewable power and up to 10% of total electricity.
The planning application process for the plants at Immingham and Hull has already begun.
Drax will build, own and operate the three plants in cooperation with German-based technology firm Siemens. The business will be spilt 60% Drax and 40% Siemens.
Commenting on the announcement Drax chief executive Dorothy Thompson said: This is an exciting opportunity for Drax to develop its business and to deliver shareholder value by exploiting our core competencies, while achieving fuel diversification and carbon abatement.
We are strongly of the view that investment in the generation sector will provide attractive returns. We believe our venture into dedicated biomass-fired generation underpins our commitment to reducing the carbon footprint of electricity generation from the continued, but necessary, reliance on fossil fuels, while delivering secure and reliable supplies of electricity.
Construction of the first plant is due to start in 2010 and be operational in 2014.
Image: Wood chippings