The plant is due to be operation by mid-2007

The project by utilities and services company SembCorp Utilities UK will build a wood-burning plant.

Its investment at the Wilton site will create about 400 jobs during construction and 15 permanent jobs as well as support jobs in supply firms.

Enough electricity to power about 30,000 homes will be generated by the new power station, which is due to be operational in mid 2007.

The new 'Wilton 10' project will operate separately of the existing Wilton power station but will be partially situated within the existing building.

'Transform operations'

SembCorp says the approach to burn renewable fuel instead of fossil fuel comes in response to a Government call, following the Kyoto Agreement, for energy to be generated from more renewable sources.

It will require about 300,000 tonnes of wood a year, which will come from a variety of sources.

Wood used will be made up of specially grown energy crops, wood from conventional forestry, sawmill chips and recycled timber.

SembCorp managing director Paul Gavens said: "Such a demonstration of faith by our parent company in Singapore is just reward for the hard work and effort of our employees and contractors in the two years since SembCorp took over the business.

"Renewable energy presents an entirely new business opportunity for this region and one that we're keen to be part of.