Plans by Glasgow-based company ScottishPower to build a small generating station in Blackburn will provide North West businesses with access to cheaper electricity.

ScottishPower is seeking planning permission to construct a 59 Megawatt combined heat and power (CHP) generating station at the South African Pulp and Paper Industry's (Sappi) paper mill at Feniscowles in Blackburn.

The new plant - which will be built and owned by ScottishPower - could reduce Sappi Europe's energy bill by around £1 million a year and meet all of its future steam requirements.

Surplus output will be offered at competitive rates to ScottishPower's business customers in the North West.

The project will create around 100 jobs during the 18-month construction phase and 12 full-time jobs in all.

Gas-fired CHP generating stations are recognised by the Environment Agency as clean energy technology. They are up to twice as efficient as conventional power stations and produce significantly less emissions of the exhaust gases linked to global warming.

Mr Franz Neudeck, Chief Executive of Sappi Europe, said: "The partnership with ScottishPower will provide significant impetus for our drive for further success in the world paper markets. The CHP will replace our existing 20-year-old on-site boilers and equip us with the most cost-effective means of providing energy.

"Along with our own investments in the site this represents a multi-million pound investment in the local economy."

Bill Landels, Managing Director of ScottishPower's Energy Supply Division said: "The Sappi project is an example of how ScottishPower is able to combine expertise of electricity generation with knowledge of a company's energy needs to offer businesses access to competitively-priced electricity and also steam.

"This is major cost benefit, especially for businesses such as Sappi Europe, whose processes require large amounts of energy".

ScottishPower is currently preparing a full assessment of the project's environmental impact which will form the basis of a planning application to be submitted later this year.

All local groups, including local authorities, are being kept informed and ScottishPower and Sappi held a public exhibition on the plans in Feniscowles Community Centre, Blackburn, on Saturday, 15 November.