Wood-fuelled power station to be UK's first

The development, at Lockerbie, Dumfriesshire, will burn natural fuel to power around 70,000 homes when it opens in December 2007.

The energy company E.ON UK, which already operates two wind farms in Scotland, said the project would generate more than 300 jobs in the area - 40 directly and 300 in forestry and farming.

All 220,000 tonnes of fuel required for the station every year will come from the local area, the company said, with up to 45,000 tonnes coming from willow trees harvested by farmers.

The plant will also be the largest dedicated wood-burning power station in the UK. Unlike fossil fuels, biomass is renewable energy.

E.ON, which owns Powergen, is working with Siemens and Kvaerner on the power station, to be based at Steven's Croft.

The company's chief executive, Paul Golby, said the development would be a huge boost for Scotland. "This is a major project for us and for Scotland because biomass is a carbon-neutral fuel with huge potential for both electricity generation and for farmers growing the crops we can burn," he said.

"Lockerbie is further evidence of our commitment to helping both the UK government and the Scottish Executive to meet their tough green-energy targets. The project will also be creating hundreds of jobs, both directly and indirectly, in the local area, and we at E.ON are committed to using local producers for our fuel needs."

The enterprise minister, Nicol Stephen, welcomed the plan. "This is excellent news for Lockerbie and Scotland," he said. "We know that Scotland has an abundant resource to lead the way in biomass development in the UK, providing and sustaining jobs and meeting local energy needs.

"Developments like E.ON UK's demonstrate extremely clearly that, by seizing these tremendous opportunities, we can help make Scotland a powerhouse of renewable energy."

Dr Elaine Murray, the MSP for Dumfries, said her local constituents supported the plant, and she welcomed the creation of jobs.

Shiona Baird, MSP, the Scottish Green Party's energy spokeswoman, said: "The new power station, and the considerable number of jobs that it will create, is good news.

"This move confirms the environmental and economic benefits of developing renewable energy sources. I hope it will kick-start demand and help boost confidence in the biomass industry."

The government wants 10 per cent of energy generated from renewable resources by 2010.

Scandinavia, France and Germany have installed thousands of automatic wood-chip-powered heating systems over the past few years.