A DEAL to build a renewable energy plant at Southampton docks that could power up to half the homes in Southampton is near to being struck, the Daily Echo can reveal.

Green energy firms, including big European players, have been in talks with port owner ABP over the past year about building a biomass-fuelled energy station to supply cheap heat and electricity. The plant would potentially create hundreds of jobs and help reduce the city’s carbon emissions.

It is understood negotiations are at a “very advanced stage” and an announcement of a preferred developer could be made in the coming months.

The Southampton plant would rival the £130m, 49 megawatt (MW) wood-fuelled power plant proposed for the Isle of Wight which could provide more than two-thirds of its electricity.

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Island-based Real Ventures Ltd announced earlier this month that it intended to submit a planning application to build the privately-funded Reality Energy Centre on an old council landfill site in Newport, creating 235 jobs.

Last year the Daily Echo revealed how ABP has held discussions with German energy giant Evonik Industries about a £90m, 20MW plant – enough to power 40,000 homes – which would be fuelled by thousands of tonnes of scrap wood sourced from across Hampshire.

Under planning rules power station development over 50MW would be decided by ministers. Smaller proposals would be decided by the city council.

Cabinet member for the environment Councillor Matt Dean said the council was “very keen” for a biomass power plant in Southampton.

However, while it is likely cheap heat from the plant could be piped to thousands more homes in the city by expanding its district heating network, there is no guarantee that the electricity generated would be sold locally.

“We want them to do it but we can’t make them do it. Some of them would supply to homes, some of them want to supply straight to the grid,” Cllr Dean said.

A deal will also need to generate more business at the docks for ABP through increased shipping movements bringing in some or all of the fuel.

Similar schemes have been announced for other cities including Bristol, Newport, Port Talbot and Hull.

One site for the Southampton biomass plant could be land off Western Avenue, in the Western Docks, previously earmarked for a £55m combined heat and power (CHP) plant which was scrapped by the city council after costing taxpayers £2m over eight years.

A pioneering district heating scheme in Southampton already supplies cheap heat to more than 2,000 homes and over 100 commercial buildings in Southampton from a 6.7 megawatt gas-powered CHP plant near Toys R Us. It now provides ABP with most of its electricity needs at the docks.