The �28m wood-fuelled plant in the Vale of York should become operational next year, producing electricity from forest wood chip and specially-grown willow.

North of England Correspondent John Thorne: "Everybody wins in this green power project"

The plant's developers - led by Yorkshire Water - say the power station is a significant step towards increasing the use of renewable energy sources to reduce the environmentally harmful output of greenhouse gases.

About one-third of the power station's funding will come from a European Union programme - known as Thermic - which is designed to increase renewable energy sources.

The plant - in the shadow of a traditional coal-fired power station at Eggborough in North Yorkshire - will supply the local grid with enough electricity to satisfied the daily demands of over 30,000 people.

Economically viable

The forest wood chip and specially grown crops of willow which will fire the power station will be harvested every three years from local fields.

The UK Government sees the project as both economically viable and environmentally sustainable, while Yorkshire Water and its Dutch and Swedish partners see a future moneymaker that will help reduce the harmful greenhouse gases produced by traditional fossil fuel power stations.

Government scientists have calculated that if a quarter of the country's farmland were given over to woodlands growing these crops, this would provide enough fuel to satisfy nearly two-thirds of the present demand for electricity.