The project, which has received a £5 million investment package from development agency ONE North East, has been described by business and enterprise minister John Hutton as evidence that the UK is "fast becoming a magnet for renewable energy investment".
Mr Hutton also said: "A recent report from Ernst & Young showed that the UK has moved up from fifth to second in the world for attractiveness in new renewable investment.
"Behind this is the government's determination to bring down planning barriers and target support at marine and emerging renewables. By 2015 we expect to see a threefold increase in green energy feeding into the grid."
The announcement that the new development is to be based in the north-east of England has come several weeks after EDF Energy announced it had been given planning permission to build a windfarm in Teesside.
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