The €8 million agreement has been entered into with Scottish and Southern Energy (SSE).

The anaerobic digestion plant will be built at Barkip, North Ayrshire. It is expected to be operational for energy production in early 2011.

The plant will be capable of processing 80,000 tonnes of organic waste and produce 2 MW of renewable electricity annually. The anaerobic digestion plant will be the first for both Xergi and SSE in Scotland.

Xergi will deliver the entire plant, which converts organic waste into renewable energy in the form of methane gas and nitrogenous organic fertiliser.

The anaerobic digestion plant includes a combined heat and power (CHP) unit producing power and heat, and storage tanks for the fertiliser.

SSE Chief Executive Ian Marchant says: “Biogas has the potential to be one of the most important new generation renewable and sustainable energy solutions available to us, capturing the energy contained in waste.

“SSE is excited about entering the biogas market which we believe offers opportunities beyond onsite electricity generation to include connections to the gas distribution network in the future. This new project will enable SSE to gain experience in owning and operating this technology so we are well placed to bring that knowledge to future projects in Scotland.”

Xergi UK Country Manager Colin Steel adds: “This project is indeed a further leap forward and an important step in our establishment on the UK market. Everyone involved in this project should be congratulated in their efforts; we look forward to working closely with SSE in the future.”