Helsinki, Finland's Wartsila announced today that it received contracts to supply and install two biomass plants for Edinburgh, Scotland-based brewer Scottish & Newcastle (LSE: SCTN).

Financial terms of the contracts were not disclosed.

Wartsila said the power plants, which will be combined heat and power plants, will be fueled by spent grain from Scottish & Newcastle's breweries as well as wood chips from local sources.

"The Wartsila BioPower plants will enable Scottish & Newcastle to make more efficient use of residue from its beer production, cut down on waste handling and energy costs, as well as reducing CO2 emissions," said Tauno Kuitunen, regional sales director of Wartsila Biopower.

The company said the plants would be the first in the world to produce both electricity and heat using spent grain as fuel.

The plants will be installed at breweries in England, with one of the facilities going up in Manchester and the other to be located in Tadcaster.

Andrew McMurtrie, project manager at Scottish & Newcastle, said "we believe the investments make good commercial sense, providing some protection from the volatility of the energy markets, as well offering additional security of supply."

The combined heat and power plants are expected to each have a thermal output of 7.4 megawatts and an electrical output of 3.1 MW.

Wartsila said the plants would produce steam and electricity for the breweries' processes and export excess electricity to the local electricity network.

The company said the two projects should be operational in the first and second quarters of 2009.