WORK on a £500m renewable energy plant at Teesport could start by the end of the year after a Government pledge to support the industry.

Work on the development by MGT Power was delayed due to uncertainty over what support the Government would give bioenergy plants.

But, in the first annual energy statement to Parliament on Tuesday, Energy and Climate Change Secretary Chris Huhne announced extra help for the sector, which will see fixed levels of support under the Renewables Obligation for 20 years after a scheme’s completion.

Last night a MGT Power spokesman said: “We very much welcome this announcement.

It has removed the uncertainty and is what everybody in the industry needed.” He added it was reasonable to think construction could now start later this year.

MGT, which is planning a similar-sized biomass power plant at the Port of Tyne, said the Teesside plant would create 600 jobs during the construction period and 150 permanent jobs once built.

The 295MW capacity plant will generate enough power for 600,000 homes.

Liberal Democrat MP for Redcar, Ian Swales, said the announcement represented a huge step forward, adding: “The Tees project is the only large-scale biomass project in the UK to be shovel-ready and has the potential to be the largest annual generator of renewable electricity in the UK. It would also bring much needed investment and jobs to Teeside.”