The energy centre near Knottingley will produce enough electricity to power around 63,000 homes, once the three-year construction programme is finished.
The plant will save around 95,000 tonnes of CO2 each year, compared with sending the waste to landfill.
The consent, subject to conditions and a section 106 agreement, is another landmark for Peel Environmental after City of York Council granted consent for an anaerobic digestion facility and co-located horticultural glasshouse at Wheldrake, York, earlier this year.
Myles Kitcher, Managing Director of Peel Environmental, said: “This facility is one of a number of energy centres we are developing across the UK which will help broaden the energy mix and move waste away from landfill.
“This decision demonstrates that waste is still a vibrant sector. The overriding economic and environmental benefits of this type of development mean they offer real investment and employment opportunities.”