Europe's first commercial wood-fuelled power station near Selby is set to play a vital role in reducing pollution and global warming, says Yorkshire Water boss Dr Kevin Bond.

He said the revolutionary plant at Eggborough - work on which will start next week - could have enormous environmental benefits.The £28 million "green" venture, announced on the stock exchange this morning, is being spearheaded by Yorkshire Water plc in partnership with Sweden and the Netherlands.

Using wood chips from forest residues and short rotation willow coppice, the plant's emissions will be significantly lower than those from coal-fired stations.

The developers say it will help the UK Government fulfil its commitment to cut emissions of carbon dioxide - the main contributor to the greenhouse effect - by 20 per cent by 2010.

Yorkshire Water says wood also has a negligible sulphur content, which means that releases of acid rain-causing sulphur dioxide will be minimal.

Even the ash and effluent could be used for fertiliser production, they say.

Dr Bond said: "Growing concern about global climate change and pollution are driving the development of renewable and sustainable energy sources.

"In the future, plants of this type could make a significant contribution to the UK's energy supply and help in meeting greenhouse gas commitments.

"The potential environmental benefits are enormous."

The new plant, being built in the shadow of coal-fired Eggborough Power Station just across the A19, is scheduled to produce its first electricity at the end of next year.

It will produce up to 10 megawatts of electricity, eight megawatts of which will be fed into the local grid - enough to meet the daily demands of over 18,000 people.

Henrik Lundberg, of Swedish technology developer TPS Termiska Processer, said: "It will utilise some of the most advanced, efficient and environmentally-sound technology available in the world today.

"This type of plant will make an important contribution towards an energy-efficient, clean and sustainable world in the future."

The project, known as Arbre, will see willow coppice planted on about 5,000 acres of land within a 50-mile radius of Eggborough. The coppice land will also be used to dispose of sewage sludge generated by Yorkshire Water Services.

The venture, expected to create up to 40 jobs, has received £10 million of funding from the European Union's Thermie programme, which aims to increase European renewable energy sources from five to 12 per cent by 2010.

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