Unions GMB and Unite have warned the government that some 850 jobs will be lost unless it reverses the decision to exclude the coal to biomass conversion of Unit 2 at Eggborough Power Station from the Final Investment Decision Enabling for Renewables process.

The £750m project was shelved last month after it was ruled to have fallen short of Westminster’s “affordability” grade and the 500MW unit will now shut down this September.

The facility’s management said that without the biomass element, the existing 2000MW fossil fuel plant (pictured) “will no longer be supplying power to the grid beyond 2015”.

The station in North Yorkshire (pictured), owned by Blue Bay Asset Management and Strategic Value Partners, is one of the largest in the UK and contributes 4% of the nation’s total electricity supply.

GMB national officer for engineering construction Phil Whitehurst slammed the situation as “another indictment of the failing energy policy of this government”.

He said: “This power station has been left high and dry because the carbon capture project at neighbouring Drax power station is more favourable to the government’s failing energy policy.

“Some 850 in-house workers will go, as well as thousands in the supply chain. In addition a £60m investment at Immingham Docks and another one at Teesport will be shelved.”

Whitehurst insisted the station was “a viable generation facility if converted to biomass” and added: “There are foreign investors interested but without the biomass subsidies the investment will not happen.”