The European Commission has given permission for the UK to convert a coal station to biomass.

It has been given the go-ahead as the conversion of Lynemouth power station complies with EU state aid rules.

The Commission found the project will “further EU environmental and energy goals without unduly distorting competition”.

Last December the UK notified plans to subsidise the conversion of the coal-fired Lynemouth power plant to biomass. It will use around 1.5 million tonnes of wood pellets a year and is expected to generate 420MW of electricity.

The UK Government intends to support the project in the form of a premium paid on top of the market price of the electricity generated and will receive aid until 2027.

The Commission opened an investigation in February 2015 to assess the terms and conditions of the UK’s support. It concluded the project’s contribution to the European renewable energy targets outweighed potential distortions of competition which could be triggered by the state support.

Electric and gas company RWE bought the power station in December 2012.

Andree Stracke, Chief Commercial Officer of RWE Supply and Trading, said: “This is an important milestone for the further development of the site. We are working towards full conversion and power production from 100% biomass within 18 months.”