A £60m power station poised to put the region at the centre of the renewable energy industry will create more than 400 jobs and safeguard several hundred more, it was announced yesterday.

SembCorp Utilities UK will build one of the UK's largest biomass energy plants at the Wilton International site, on Teesside.

Known as Wilton 10, the project will create about 400 jobs during construction and 15 permanent jobs with Semb-Corp.

It will also secure and create hundreds of job opportunities in the supply chain, in farming, forestry, construction, wood recycling and transport.

It will be capable of generate 30MW of electricity at any one time - enough to power about 30,000 homes - and will be operational by mid-2007.

Dermot Roddy, chief executive of Renew Tees Valley, said: "The message it sends is that the Tees Valley is the place to be for companies wanting to be involved in the rapidly-expanding renewable energy technologies.

"As well as the development announced, we also have the Biofuels Corporation biodiesel production plant at Seal Sands now under construction, as well as D1 Oils, based in Stockton, with plans to build biofuel plants for use across the world."

A feasibility study is also being undertaken into creating a separately-owned and operated wood recycling facility at the Wilton International site to support the project and Redcar and Cleveland Borough Council's recycling initiatives.

SembCorp's wood-to-energy operation comes in response to a Government call, following the 1997 Kyoto Agreement, for more energy in the UK to be generated from environmentally friendly renewable sources.

Paul Gavens, SembCorp Utilities UK managing director, said: "This will sustain jobs and play a part in helping the Government meet the UK's climate change and greenhouse gas reduction targets.

"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 power station will need about 300,000 tonnes of wood a year.

The wood will come from energy crops specifically grown for the purpose, conventional forestry, sawmill chips and recycled timber.

The biomass industry, which generates only one percent of the UK's electricity, is expected to grow significantly in the next few years.

SembCorp entered the renewable energy sector with a tallow project that involved burning 100,000 tonnes of cow fat from cattle slaughtered during the BSE crisis. It is about half way through the project, which is expected to finish by the end of the year.

Originally, the wood-burning plant was to burn only willow, which takes four years to reach maturity, but SembCorp said it would take time to convince farmers that it was a good crop to grow.

SembCorp moved into renewable energy to avoid being too dependant on chemical customers at the Wilton site.

A spokesman said: "We need to diversify. We are sitting here on Teesside, but have lost some big players and customers in the last few years, with a polypropylene plant closing and BP closing their polythene plant.

"Any business losing customers needs to find another way to return its revenues."