German utility E.ON is to convert a 500 MW unit at a UK coal fired power plant to run on biomass.

Work at the Ironbridge plant will begin next year and the company said it may decide to convert the site’s second unit as well. The unit will run on wood pellets imported from the US.

E.ON’s decision comes as fellow German energy firm RWE prepares to open its converted coal plant in Tilbury as the world’s largest biomass facility, with a capacity of up to 750 MW.

Meanwhile, Bulgaria’s agriculture minister Miroslav Naydenov said today that German investors had shown an interest in funding biomass production in his country. He said Bulgaria – which yesterday banned shale gas exploration – had huge biomass potential due to its surplus of diseased trees which are yet to be felled. He said this rotting wood could be utilised in biomass plants, of which Bulgaria has none at the moment.

Television network Sky hopes to start operating a combined cooling heat and power plant at its main studio complex in London by the end of this month.

At full capacity, the plant will take delivery of 32 tonnes of wood chips a day, sourced from local businesses in a 25-mile radius, and could supply up to 40 per cent of energy to the complex.

This month US analysts at Pike Research said that worldwide biomass power generation capacity could reach 115 GW in the next decade, representing $138bn in cumulative investment.