Irish renewable energy group Kedco has signed a heads of terms with Londonderry Port & Harbour Commissioners to build a new 25MW biomass plant in Ireland.

The agreement allows Kedco to lease a 10 acre site within the Londonderry Dock in Northern Ireland for construction of a biomass electricity and heat generating plant.

The port already has 400MW ESB Coolkeeragh gas fired power plant as well as another biomass project that has secured planning permission.

Kedco plans to begin the planning process immediately after signing a binding option agreement by March 2013.

Meanwhile, the company has also commenced pre-planning consultation process to extend its Newry Biomass project by 4MW.

This will take the total capacity of the Newry project up to 8MW once all phases are completely developed.

Kedco also said that it expects the Altilow wind project to commence operations by mid-2014 following completion of 12 months of wind studies.