RWE npower said on Monday that a fire had broken out in a fuel storage area at its wood-pellet-fired Tilbury power station, which is located to the east of London and is Britain's largest dedicated biomass plant.
The company said no injuries had been reported in the fire that broke out at 0745 GMT, and added that police and 100 fire-fighters were at the plant, which only began generating power last month.
The fire involves some 4,000 tonnes of fuel in storage cells. At least two are very well alight, the Essex County Fire and Rescue Service said in an update.
The fire service said operations were being hindered by the fact that the fire is high up in the main structure of the building, making it difficult for crews to reach.
The Tilbury Power Station, Britain's first dedicated biomass plant, is located in Essex to the east of Tilbury Docks on the River Thames.
The 750 megawatt (MW) power plant is on the site of the utility's ageing Tilbury coal-fired power plant, which will shut down by the end of 2015. RWE plans to burn just over 2 million tonnes of biomass at Tilbury through 2015.
Britain's energy ministry last October unveiled plans to increase subsidies for co-firing biomass and coal in power plants, making it more profitable for UK developers such as Drax to proceed with planned co-firing biomass projects.
(Reporting by Adveith Nair with additional reporting by Nina Chestney; Editng by Paul Hoskins)