​A Bath energy firm is looking to take total ownership of a company which wants to build a new breed of controversial renewable power plants.

EU anti-monopoly rules have meant that industry giant National Grid has been forced to sell its 50 per cent stake in Blue NG, which is aiming to develop up to eight electricity-generating plants around Britain.

The share is now expected to be bought by 2OC, which already owns the other half of the venture, and which will be carrying on with the process of applying for planning permission for more plants once it has sorted out various legal complications.

The firm has planning permission for one scheme at Beckton in East London, but is still raising finance for it and has not yet started work.

It faces opposition from environmental groups opposed to biofuel power stations, although the Bath Activist Network called off its own protests a year ago after being convinced that Blue NG was behaving ethically.

Opposition centres on fears over air pollution around the sites in the UK, and claims that many such plants will use palm oil from sensitive tropical rainforest zones, although Blue NG has said it will use rapeseed oil from this country.

A statement from Blue NG said that National Grid would complete its withdrawal from the venture next year.

“Both parties are working together to ensure a smooth exit for NG. 

“2OC intends to develop Blue-NG’s renewable generation business in the UK and expand globally. NG supports 2OC in this ambition.

“2OC is raising finance and intends to continue construction of the CHP plant at Beckton in East London and will seek planning permission to build further plants in the UK.”

Andrew Mercer, chief executive of Blue NG and 2OC, said it was a shame that the EU’s Third Package legislation prevented National Grid from continuing with the joint venture.

“I am hugely grateful to them for their support over the past three years and their help in ensuring a smooth handover to 2OC.”

2OC, which was founded five years ago by Mr Mercer and fellow entrepreneurs Michael Edge and Nigel Mitchell, is itself at the forefront of work to harness the energy released from the process of reducing the pressure of natural gas before it is distributed.

Blue NG’s plans for a power plant in Southall in London were rejected, but the firm has plans for sites near Bolton and in Lincolnshire.

Robert Palgrave from the pressure group Biofuelwatch said: “The news that the National Grid is pulling out of this biofuel venture is welcome.  Any investor who is looking at the schemes should be aware that there will continue to be significant opposition to biofuel power stations anywhere in the UK because they are a disaster for climate, biodiversity and people both in the global south and locally, due to the health impacts of air pollution.”