Babcock & Brown and National Power, who are also developing the $150 million Lake Bonney wind farm project, expect the $60 million, 30 megawatt power station to be operational by 2005. It will create 150 direct and indirect jobs in the region.

"The majority of the wood will be drawn from plantation residues and Mt Gambier has large plantation resources, both hardwood and softwood," spokesman Allan Stewart said.