PLANS to cut the energy bills of hundreds of Southampton residents by building a new power plant are finally set to go ahead.

Civic chiefs are today set to approve to the plans for a gas and biomass plant on the site of a former city school.

When built, the new energy centre will power 900 council homes in Thornhill and could save residents millions of pounds in reduced heating bills.

As previously reported in the Daily Echo, the plans were put forward last year, with Labour council bosses hoping to get funding from the Government’s Energy Company Obligation (ECO) scheme.

But the plans were held up by changes to the ECO scheme, which sees energy companies fund improvements to thermally-inefficient homes, which meant less funding was eventually available for the project.

Now an agreement has been made about the council receiving £4.19m from energy providers nPower and Vital towards the project.

The plant will be built on the site of the former Hightown Secondary School, next to the Eastpoint Centre, and council chiefs say it will be “about the size of a small house”.

Energy from the plant will be pumped through pipes to heat 904 council properties in Thornhill, which will have individual heat meters installed for tenants to have control over their own heating.

The new system is estimated to cut residents’ heating bills by 20 per cent, while it will save at least 2,800 tonnes of CO2 – the equivalent to the output of 470 family cars – every year.

As well as the ECO funding, the council has ploughed in £15.83 million of funding from its housing and revenue account, which is separate to its general budget and largely funded through tenant rent.

It is hoped the new plant could be up and running some time in 2017.

Labour Cabinet member for housing and sustainability Cllr Warwick Payne said: “The Government took with one hand and gave back with the other, although what was given back wasn’t quite as much as it was in the first place.

“We would have been a lot further ahead without the changes, we have lost time and our tenants have lost out on cheaper bills.

“If you can deliver energy bill savings for residents on limited incomes it can make the world of difference.

“By moving residents from an old system to a better one puts money straight back into their pockets.”