One of Britain’s biggest coal plants is preparing to join the fight against climate change, The Times has learnt.

 

Eggborough Power Station in North Yorkshire, which generates about 4 per cent of the country’s electricity, has drawn up plans for a full conversion to burning biomass material such as wood pellets.

 

The move, costing hundreds of millions of pounds, will transform Eggborough into the country’s leading renewable power plant.

 

It also signals a further retreat for coal-fired power generation in Britain, which as recently as 20 years ago provided two thirds of the country’s electricity.

 

It is understood that more than 1,000 jobs will be created by the overhaul. The first boiler is set to be converted as soon as early next year, with all 2,000 megawatts of capacity earmarked for completion in 2015.

 

The arrival of tighter environmental regulations and higher taxes are forcing coal plants to close or go green. Biomass creates fewer carbon emissions than coal and operators can qualify for green energy subsidies, funded by levies on consumers’ electricity bills, to offset the higher costs.

 

Ten days ago Drax, Britain’s biggest power plant at 4,000MW, announced a £700 million plan to convert half its boilers from coal to biomass. Eggborough’s full conversion will generate the same amount of renewable electricity as its rival near by, making the two plants the joint-largest green generators in the country.

 

Other coal plants have followed suit, but Eggborough will become the biggest to opt for a full conversion.

 

An industry source said: “Coal is history in the UK for environmental and financial reasons. Eggborough’s planned shift to burning biomass marks another milestone in the slow death of coal burning.”

 

It is understood that fundraising plans for the biomass project are under way but that Eggborough’s owners have not yet signed it off. One potential hitch is that the Government has not decided what level of subsidy such biomass generators will receive under its new Energy Bill. With the Bill due for publication this month, Eggborough wants to secure a commitment from the Government that will allow it to go ahead.

 

The company also hopes that the Government’s new Green Investment Bank will help with the fundraising by underwriting some of the loans, according to sources.

 

The Government has yet to publish its final sustainability criteria covering the sourcing of biomass material, which has created another area of uncertainty. Only projects that can show that their biomass material has been sourced responsibly, for example not from rainforests, will qualify for green subsidies.

 

It is understood that Eggborough, like Drax, plans to use wood chips sourced from approved forestry land in North America.

 

The Government is backing biomass as a cheaper way to reduce carbon emissions from the power sector than offshore wind farms. Britain has set a target of generating about a third of electricity from renewable sources by 2020. Eggborough and Drax’s biomass conversions alone would meet a fifth of that target.

 

Environmentalists have raised sustainability concerns about how biomass material is sourced and, for example, the carbon footprint of shipping the material over large distances.