E.ON has submitted an application to the Department for Environment, Food and Rural Affairs to build a 150MW biomass fuelled energy from waste plant.
The energy firm proposes to build the plant at the Royal Portbury Dock, North Somerset, which would have the capacity to generate enough electricity to power 200,000 homes.
Although not yet finalised, it is hoped reclaimed wood will fire the plant.
E.ONs renewable business regional director Dave Rogers said: This project and biomass generally has a vital role to play in the UKs future energy mix as we look to produce affordable, secure and lower carbon energy for generations to come.
This scheme will displace more than 450,000 tonnes of carbon dioxide every year, which is the equivalent of taking around 150,000 cars off UK roads.
If Defra agrees to the plans, construction is expected to begin in 2010 and could be fully operational by 2013.
E.ON already owns and operates the 44MW Stevens Croft project, which is one of the biggest biomass plants in the UK.