Finnish energy company Fortum has committed €40m in its associated company Turun Seudun Energiantuotanto’s (TSE) new combined heat and power (CHP) plant in Naantali.

Expected to be commissioned in the last quarter of 2017, the €260m plant, which can be fuelled by biomass, coal and high-quality recycled waste, will replace the 50-year-old coal-fired power plant in the region.

Efforts are also being made to design it to operate exclusively on biomass, mainly of locally sourced wood chips transported from surroundings in a radius of around 100km to 150km.

Initially the CHP plant is expected to consume wood chips of about 0.7 million cubic meters a year and eventually up to 1.2 million cubic meters a year.

To be funded by shareholders and external financing, the project, with a capacity of 142MW electricity and 244MW heat, will significantly contribute to the growth of the local economy.

In addition to producing 900GWh electricity and 1,650GWh heat annually, the plant will create 200 permanent jobs for sourcing of the domestic biomass and 500 jobs at the peak of the construction phase.

In December 2013, the board of directors of TSE, in which Fortum has a 49.5% stake, has agreed to propose the plant investment to the annual general meeting.

Fortum heat division vice-president Jouni Haikarainen said the company is pursuing growth in energy-efficient combined heat and power production in line with its strategy by investing in the new plant in Naantali.

“The fact that the new power plant aims to utilise as much domestic biomass as possible also makes the new project an interesting one for Fortum,” said Haikarainen.