Work on a new £650 million biomass plant on the Teesport Estate near Middlesbrough is to begin “within weeks” after the developer MGT Power completed its financing arrangements for the project.

An artist’s rendering of the Tees Renewable Energy Plant

The Tees Renewable Energy Plant will generate up to 299MW of power fuelled by wood pellets and chips sourced in the US and Europe.

Site preparations will begin “within weeks” and the main construction work “a few months later”. The plant is expected to be up and running in 2020. It was granted a contract for difference by the government via the non-competitive Final Investment Decision Enabling for Renewable process with an index linked strike price of £125/MWh (2012 prices).

Macquarie Capital and Macquarie Commodities and Financial Markets, along with Danish pension fund PKA, will become the joint owners of MGT Teesside, which will own and operate the plant.

It will be built by a consortium of Tecnicas Reunidas of Spain and Samsung Construction and Trading of South Korea. Up to 600 jobs will be created during construction and around 100 full time jobs will be sustained on site once it becomes operational.

MGT Teesside chief executive Ben Elsworth said: “The Tees [Renewable Energy Plant] project has had to overcome many hurdles in development but we have now successfully reached the next stage despite the difficult financing environment.

“Support from the local region and a big team effort from Macquarie and all of the different parties involved in the project were instrumental in getting there. We can’t wait to get work started on site and make this project a huge success for the Teesside region”.