Teesport owner PD Ports has welcomed the government’s approval of a £500m wood-fuelled power station at the port.

The 295megawatt plant, to be built by MGT Power on the south dock, will produce enough electricity to power 600,000 homes across the north-east.

“With MGT Power’s plan becoming a reality we will see a new traffic flow of over two million tonnes per annum through the port,” said PD Ports group chief executive David Robinson.

MGT has secured long-term supply contracts for biomass feedstock from sustainably-managed forests and plantations.

The plant, which will comprise a single, circulating fluidised bed boiler burning woodchip to produce steam, will take two to three years to build and is expected to be operational by autumn 2012.