A town of 4,300 inhabitants near the Hungarian border, Guessing launched into renewable energy in the early 1990s and now produces more than it can consume.

The latest project, opened last week, is a one-megawatt plant capable of producing gas from wood chips.

According to its backers, this gas can be used in normal gas networks, urban heating systems, and cars or power stations that work on gas.

The technology, developed jointly with Switzerland, has already attracted attention from major energy companies.

"Vattenfall (from Sweden), EDF (France) and E.ON (Germany) are all interested in the plant," Guessing's mayor Peter Vadasz noted proudly.

A similar plant to the one in Guessing -- which can heat 150 homes on a cold winter's day -- but 25 times more powerful is already in the works in Goeteborg, Sweden.

About 20 years ago, Guessing was still a sleepy town in the eastern Austrian province of Burgenland, but its foray into renewable energy soon turned it into a pioneer.

Located in a region of crop fields and forests, Guessing used its assets -- biomass and sunshine -- to pull itself out of its economic stagnation. Since 1996, this project has been coordinated by the European Centre for Renewable Energy (EEE) and co-financed by the European Union.

After discarding wind power for lack of breezes, researchers developed a number of techniques to produce heat, electricity and agrofuel using maize, rapeseed, agricultural waste, wood or sunshine.

-- The town now produces more energy than it can use --

Guessing now covers all its heating and electricity needs thanks to a network of small units with a total capacity of six megawatts. And since 2005, the small town has been producing more energy than it can use.

"We produce 120 million kilowatt-hours of heating every year, and 45 million kilowatt-hours of electricity," said EEE director Reinhard Koch.

Sales of electricity also brought in 6.7 million euros (9.4 million dollars) last year.

"A total 1,100 jobs have been created in the last 12 years," added Vadasz, who has won every re-election since 1992.

"Since the price of heating is determined by the town, we've been able to incite companies financially to settle down here. We have re-invested to renew the town," he said.

Guessing's model, which is partly based on its ability to export its innovative technologies, has not been spared by the global economic crisis: one company specialised in photovoltaics -- solar cells -- is due to sack half its employees due to a drop in demand.

But the small town's ideas have nevertheless spread in the surrounding area.

The surrounding country, whose total population is 28,000, hopes to become energy self-sufficient by the end of 2010 with the development of several dozen more small power plants if the government passes a law proposal providing incentives, noted Koch.

That would cut CO2 emissions in the district by 85 percent, he added.

Guessing's model has also raised interest farther afield and in early May, Vadasz presented his town's model to the United Nations in Vienna.

"Sri Lanka's environment minister is coming to visit us," the mayor added proudly.

Researchers, meanwhile, are already looking for new energy sources. After gas, they now hope to produce diesel and petrol from wood.

The aim is to create an agrofuel that will not endanger food production. First experiments will be held in a few months time.

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