July 24, 2008 - British supermarket chain Tesco is set to begin construction on a new distribution center equipped with a power plant that generates electricity from straw.

The U.K.'s first-ever straw-powered combined heat and power plant will generate more than enough electricity to power eight Tesco Superstores, the company estimates. Any excess energy generated will be sold back to the grid.

The plant will burn straw to power a steam turbine, which will then generate electricity. (The process will be filtered to prevent polluting particles from escaping into the air.) Ash, the plant's sole waste product, can be used as fertilizer, Tesco says.

Tesco expects to recover the $24 million set-up cost for the plant within six years. After recouping its initial investment, the company says it will be able to generate energy more cheaply than buying it from the local power supplier.

The new plant is part of a wider initiative to reduce the company's carbon footprint, according to David North, Tesco's community and government director. "We’ve set ourselves stretching targets to reduce the carbon intensity of our business, and energy from renewable sources is a key part of our strategy," he says.

Tesco is working to address the carbon footprint of its products as well, introducing a carbon labeling system for select store products earlier this year.