LONDON, Oct 22 (Reuters) - German utility E.ON EONGn.DE said it was scrapping plans to build a 150 megawatt biomass-fuelled power plant at Portbury Dock in southwest England because of unfavourable regulation and biomass policy.

"In reaching this decision we considered many factors, however under the current regulatory and policy framework, we concluded that this project was not a priority investment for E.ON," the company said in a statement on Tuesday.

The British government currently rewards renewable energy plants, including biomass stations, through a subsidy scheme and plans to replace it with a guaranteed power price programme from next year.

Under draft proposals, dedicated biomass plants would receive a guaranteed electricity price of 120 pounds ($190) per megawatt-hour (MWh) from 2014/15 and converted biomass plants 105 pounds per MWh.

The current wholesale power price for summer 2014 is around 50 pounds.

E.ON officials could not immediately be reached to provide details on their objections to UK regulation and policy.

The utility is continuing to develop a smaller 30 MW biomass power plant at Blackburn Meadows in northern England, it said.

E.ON is also converting its Ironbridge coal-fired power plant to run on biomass.

Two units at Ironbridge are expected to both generate from Oct. 24, E.ON's plant availability data showed.

Rival utility RWE RWEG.DE decided earlier this year to close its converted biomass power plant at Tilbury east of London due to a forecast drop in power prices and a lack of investment from the Germany-based parent group. ID:nL6N0FE1VA ($1 = 0.6189 British pounds)

(Reporting by Karolin Schaps; editing by Jane Baird)

((karolin.schaps@thomsonreuters.com)(+44)(0)(207 542 6622)(Reuters Messaging: karolin.schaps.reuters.com@reuters.net))

Keywords: BRITAIN EON/BIOMASS