More than 100 jobs could be secured at Lynemouth power station under new green energy plans.
The government has given its blessing for the £100m biomass conversion of the coal-fired power station to help cut carbon emissions.
Officials at owner RWE npower have welcomed the announcement, which they see as ‘a positive step in the right direction’, although a final decision will not be made until early next year.
The introduction of a new tax on carbon emissions was blamed for the loss of 550 jobs at the nearby Lynemouth aluminium smelter last year.
Fears had been raised at the time that a similar fate could fall on the 400MW coal-fired power station before it was bought by RWE npower, helping to save 130 jobs.
Now bosses are pushing ahead with their £100m plans to convert the plant to biomass, or wood-burning, or face closure under European emissions regulations.
If they are given the go-ahead, they would be able to sell electricity generated at £100 per MW/h – twice the current wholesale price.
Bob Huntingdon, managing director at Lynemouth Power Limited, said: “This is a good step forward for Lynemouth Power, but there are a number of steps remaining before we can make a final investment decision.
“We are aiming to take an investment decision on the station’s conversion to biomass early next year, but today is a positive step in the right direction.”
An RWE npower spokesperson said: “DECC (Department of Environment and Climate Change) has confirmed that the project to convert Lynemouth Power Station to run on dedicated biomass meets the minimum criteria for an investment contract under the Final Investment Decision Enabling Scheme, part of the Government’s proposed ‘Contract for Differences’ mechanism aimed at supporting major low carbon energy projects.”
The announcements were made by chief secretary to the Treasury, Danny Alexander, as part of the National Infrastructure Plan.
The government has also finalised the subsidy levels that will be paid for the varied forms of renewable energy.
Energy and Climate Change Secretary Edward Davey said: “This package will deliver record levels of investment in green energy by 2020. Our reforms are succeeding in attracting investors from around the world so Britain can replace our ageing power station and keep the lights on.
“Investors are queuing up to express their interest in these contracts. This shows that we are providing the certainty they need, our reforms are working and we are delivering ahead of schedule and to plan.”