When completed in 2010 the £400m plant from developer Prenergy will contribute around 70% of the Welsh Assembly's 2010 renewable electricity target.
And with biomass generation it will be able to produce continuous, base-load electricity for 24 hours a day, 365 days a year over the 25 years of its expected lifetime.
"This will be the biggest biomass plant in the world, generating enough clean electricity to power half of the homes in Wales," said Hutton. "It joins eight major renewables projects already given the green light in the past 12 months alone and is another important step towards the low carbon economy envisaged by the Prime Minister."
The wood fuel is expected to come from sustainable sources in the US and Canada.
The Port Talbot plant is the latest in a series of renewable consents cleared by ministers at the Department for Business, Enterprise and Regulatory Reform. Six offshore wind farms have been given the go-ahead, alongside an onshore wind farm in Devon and the Wave Hub marine energy project, which will be sited off the coast of North Cornwall.
Other renewable projects consented in the last 12 months are:
Greater Gabbard (500MW)
London Array (1GW)
Fullabrook Down, Devon (66MW)
Wave Hub (20MW)