The power of water will be used to generate electricity in the Tees Valley, officials announced today.

A hydroelectric station is to be built at Selset Reservoir, 14km north west of Barnard Castle, now that a power partnership has been signed by Northumbrian Water and RWE npower renewables.

It will generate up to 750 kilowatts of electricity - 4,000 megawatt hours a year - sufficient to meet the average annual needs of about 1,000 households. The power generated will be fed into the national grid.

It will add to Northumbrian Water’s hydro power plant at Kielder Water, Northern Europe’s largest man-made reservoir, which is also operated in partnership with RWE npower renewables.

The larger Kielder scheme generates some 20,000 megawatt hours sufficient to meet the average annual needs of about 5,000 households.

Work on the £2.5m Selset hydroelectric project will begin early in 2010. It will require integration with the existing water supply operations, improvement of an access road and construction of a small building, approximately the size of a double garage which will house the turbine and generator. It will be built in the style of a Teesdale farm building in stone and with a pitched roof.

The water level of Selset reservoir, which when full holds 15,320 million litres, will be lowered to facilitate safe working conditions during construction.

Tim James, Project Manager at RWE npower renewables said: ”We have a number of hydroelectric projects in Wales and Scotland and this is the first we have constructed in England. It will make a useful contribution to UK renewable energy targets.”

Dr Colin Price, Northumbrian Water’s Technical Director, said: “This project in the Tees Valley is one of several energy generation schemes Northumbrian Water is currently developing. We believe that creating renewable energy where we can is the responsible way forward, for the business, our customers and the environment.”