Nova Scotia Power (NSPI) and NewPage Port Hawkesbury are to develop a 60MW biomass co-generation facility in Canada.

NSPI will invest $200m in the project including $93m in construction costs for new facilities and $80m to purchase assets from NewPage.

NewPage will construct and operate the facility and will be completely responsible for fuel supply, the company said.

The unit will use stem wood provided by NewPage for energy generation and could potentially supply the Canadian province with about 400GWh annually accounting for about 3% of Nova Scotia’s total electricity demand.

The project will need approval from the Nova Scotia Utility and Review Board and the facility is expected to begin operations in late 2012.

The firms plan to float requests for proposals to test the competitiveness of the proposed project.