A NEW £60m wood-burning power station at Wilton has been given the green light.

SembCorp Utilities UK is to build the new plant, known as Wilton 10, creating about 400 jobs during construction and 15 permanent jobs within the company.

The project will also secure and create jobs in the farming, forestry, wood recycling and transport sectors.

The plant will generate 30mW of electricity, enough to power about 30,000 homes, and is expected to be up and running by the middle of 2007.

The announcement is good news for farmers in the region who are looking to diversify into short rotation coppice. The plant will need about 7,500 acres to be grown within a 50-mile radius over the next four years.

Robin Twizell, of Renewable Energy From Agriculture, welcomed the announcement.

He said for years farmers had been told to grow short rotation coppice but had not had a market.

"Now we have a serious market and it's no longer just for enthusiasts. It's excellent news: when did anyone last hear of a £60m investment in an industry for something that farmers can grow?"

SembCorp does not expect to source wood from local farmers until 2011; until then most supplies would come from forests.

Wilton 10 will operate separately to the existing 197mW Wilton Power Station, but will be partially situated within the present building.

The new plant will meet all UK and European emissions targets. SembCorp will submit an application to the Environment Agency for a permit to operate the plant.

Paul Gavens, managing director, said the announcement was extremely good news for SembCorp, the Wilton International manufacturing site and the people of the North-East.

"It will sustain jobs and play a part in helping the Government meet the UK's climate change and greenhouse gas reduction targets," he added.

"We believe this investment will transform our operations and offers us a great platform from which we can move forward to a brighter, greener future."

The new power station will require about 300,000 tonnes of wood a year. It will come from specially grown energy crops, wood from conventional forestry, sawmill chips and recycled timber.

About 20pc of the wood will come from forests, 20pc from sawmills, 20pc from short rotation coppice and 40pc from the wood recycling industry.

Middlesbrough South and East Cleveland MP, Dr Ashok Kumar, said the new power station was a major leap forward.

He said: "I congratulate SembCorp's managers, engineers and technologists for their foresight.

"I believe the new station will be a showpiece example for environmental engineering and can act as a beacon of excellence on Teesside."