The Council of Barnsley has given permission to build a £65 million biomass plant.
The Houghton Main Renewable Centre, located in the region of Little Houghton, will be developed by Peel Environmental and Northern Bio Power.
It is estimated to process around 150,000 tonnes of waste wood per year generating 20MW of electricity – enough to power 49,000 homes.
It will create up to 200 jobs during construction and 25 jobs during operation.
Jane Gaston, Development Manager at Peel Environmental said: “There is a real opportunity for the Houghton Main Renewable Energy Centre to act as a catalyst for further regeneration as the site is surrounded by land earmarked for employment use. With the ability to provide a renewable and reliable source of energy, the Centre could unlock even further inward investment to the area.”