OREANDA-NEWS. July 27, 2009. The British company MGT Power wants to buy from the Baltic countries a million tons of woodchips a year starting from 2012 for the needs of a woodchip-fuelled power plant, the daily Postimees reported.

In the next few months the British company is planning to sign long-term contracts for the purhcase of woodchips from Estonia.

The capacity of the power plant the company is planning to build is 295 megawatts and it will be built at a cost of 500 million pounds.

The British company's plans will sharply increase demand for woodchips and the price of the fuel is likely to rise. This, in turn, may lead to higher prices of electricity and heat, said Tiit Veeber, member of the supervisroy board of Fortum Tartu.

Of major Estonian power plants the Vao Power Plant near Tallinn that was launched this spring and Fortum's Tartu power plant are fuelled by woodchips. Also the Narva Elektrijaamad (Narva Power Plants) subsidiary of the Eesti Energia power utility and a combination power plant Fortum is building in Parnu are planning to start using woodchips as their fuel.