Plans to build a combined heat and power plant (CHP) at South Hook have been granted development consent.
It will have an installed capacity of up to 500MW – enough to power around 900,000 homes – and will meet the needs of the existing Liquefied Natural Gas (LNG) terminal as well as export extra electricity to the grid.
Energy Secretary Ed Davey said: “CHP is a highly efficient means of generating power that can lower costs, increase efficiency and reduce carbon emissions from heating and power generation.”
A final investment decision on the project has however yet to be made.
A spokesperson for South Hook CHP said: “Though an important step in the project development process, the approval of the DCO application does not necessarily mean that the project will proceed to construction.
“It is anticipated that South Hook CHP’s shareholders will make the final investment decision early in 2015.”