Tesco to build straw-powered CHP plant

Cheshunt, England-based Tesco (LON: TSCO), the world's third largest grocer, plans to power one of its U.K. distribution centers using straw power.

The company said the new 5 megawatt facility will be the country's first straw-powered combined heat and power plant. The new plant will meet the electricity and heating needs of Tesco's Goole Distribution Center, with the company planning to sell all excess electricity back to the grid.

"We've set ourselves stretching targets to reduce the carbon intensity of our business, and energy from renewable sources is a key part of our strategy," said David North, community and government director at Tesco. "We've identified five sites that would be suitable for further biomass technology, and are making big investments in wind turbines too."

The company recently secured planning permission for two large 800 kilowatt wind turbines at its distribution centers in Daventry and is applying for consent for another three turbines which will each generate 1.25 MW.

Tesco said the £12 million combined heat and power plant works by burning straw which powers a steam turbine, generating electricity. The company said the only waste from the process is ash which can be used by other industries, or passed back to local farmers to be used as a fertilizer.

Construction at the Goole Distribution Center is set to begin shortly, with the power plant scheduled to be operational next year. The supermarket has also submitted a planning application to build a second small-scale biomass plant at its Livingston Distribution Center.

The company said it expects to recoup the cost of the Goole facility within six years.