Plans for a £400m power station in Newport have been given the go-ahead by the UK Government.
Severn Power says the project to build a gas-fired plant on the River Usk, next to the Uskmouth power plant, would create 650 construction jobs.
The 800 megawatt (MW) plant is due to open in 2010, employing 60 workers.
Newport East MP Jessica Morden said the decision was "great news for the whole of Wales, but particularly important for Newport East".
Severn Power is owned by Carron Energy Ltd, a privately-owned electricity generating company, which took over the coal-fired Uskmouth power station after it went into receivership in June 2004.
The firm first unveiled proposals for the CCGT (Combined Cycle Gas Turbine) plant two years ago. Newport Council gave its approval in January this year.
There has been a power plant on the banks of the Usk for nearly 50 years, with the old Uskmouth A coal-fired power station demolished in 2002.
The new plant will be built on the site of the former coal-fired power station
Peter Trusser, project director for Severn Power, said the site was "about 350m in length and 200m wide".
"For a very small plot plan area, it's a huge amount of power we can get out of it, compared to the coal station [nearby] which really needs over 100 acres to support it," he said.
The planned new facility will take 30 months to build and will sit alongside the existing plant, Uskmouth Power (formerly Uskmouth B).
Carron Energy said the gas supply for the new plant would involve extending Wales and West Utilities' local gas distribution network.
It said the pipeline would use "the latest below-ground horizontal drilling techniques which will mean minimal disruption to the land above it the pipeline route".
Chief executive Alex Lambie: "I would particularly like to thank Jessica Morden MP for her enthusiasm and support for this project.
"Her dedication has been crucial to securing this vital development for Newport which will boost the economy of south Wales and contribute to the Welsh assembly's aim of energy self-sufficiency for Wales."
Neil Crumpton, who is director of Friends of the Earth Cymru, said he felt an opportunity had been missed as the planned facility was "a mid-efficiency energy technology".
He said a more efficient type of technology could have been installed.