German utility E.ON received approval on Thursday to build a storage facility for biomass it plans to burn in its converted coal-fired power plant at Ironbridge, the company said.

E.ON plans to start firing one of its 500-megawatts (MW) coal units at Ironbridge with wood pellets from early 2013, with an option to co-fire 20 percent with coal if the government's renewable energy subsidies review offers higher support for this type of power generation. The results of the review are expected shortly.

We're pleased at the decision reached by Shropshire Council today as it is a crucial step towards continued operation of the power station and securing employment at the site until the end of 2015, said Ironbridge Plant Manager Dave Eynon.

Despite the changes, Ironbridge will have to shut down by the end of 2015 under EU-wide regulation that bans highly polluting power stations, called the Large Combustion Plant Directive (LCPD).

E.ON said three weeks ago it would review plans to build a new dedicated biomass plant in the port of Bristol, after the government's announcement to review renewable energy subsidies.

A spokesman said because Ironbrigde was a converted biomass plant its business strategy was different and that plans to start biomass firing remained on track.

E.ON follows in the footsteps of rival RWE npower, which opened a converted biomass plant at Tilbury in January.

But RWE npower's plant has been shut down since late February when a blaze tore through the station.

Two out of three units are expected to remain out of service until the end of July.

Tilbury is also due to shut down by the end of 2015 under the LCPD legislation.

(Reporting by Karolin Schaps; editing by Keiron Henderson)