A PIONEERING energy firm has officially started work on a second North-East factory.

Air Products is building another advanced gasification plant in Billingham, near Stockton.

The factory will create 50 jobs, support about 750 construction posts, and operate from 2016.

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Bosses say it will annually take up to 350,000 tonnes of non-recyclable waste away from landfill, helping to power about 50,000 North-East homes.

The development is backed the Government's Energy for Growth scheme, which aims to save taxpayers' money by securing a fixed electricity price from suppliers.

The Cabinet Office last year agreed a deal to buy power from the plant for the next 20 years, which ministers predict will save £97m and meet two per cent of the Government's overall energy consumption.

The factory is being built next to Air Products' sister advanced gasification plant, which is under construction on land near the North Tees Chemical Complex, and will operate commercially from 2015.

When finished, it will be one of the largest of its kind in the world and the UK's first energy-from-waste power station using plasma technology to generate energy by burning domestic and commercial waste.

The first factory is also creating 50 jobs.

David Taylor, Air Products' energy business vice-president, said: “Our agreement with the Cabinet Office serves as a strong endorsement to our renewable energy projects and to the Teesside area.

“We are at the forefront of technological innovation, investing in green jobs and skills in the North-East.

“Once the second factory enters commercial operation, the projects will have created and supported more than 1,500 jobs in the region.”

The Government is now inviting bids for the second phase of its Energy for Growth scheme.

Under the project, ministers want submissions for a 15-year deal, similar to Air Products' agreement, from renewable energy firms.

Francis Maude, Minister for the Cabinet Office, visited the North-East to see the new plant and said the programme would help cut bills.

He added: “We are reforming Whitehall to get the best possible value for hardworking taxpayers.

“The Energy for Growth programme ensures the security of our energy infrastructure.

“It is good for the industry, good for taxpayers, and supports our long-term plan for a stronger economy.”

  • See Wednesday's Jobs and Business supplement for an in-depth look at Air Products' work on Teesside