The Clyde Energy Center will supply power to 3,000 municipal customers and can generate enough electricity to power the equivalent of 550 homes.
The city has agreed to purchase all the power generated by the facility for 20 years.
Commercial operation on the 20-acre installation will begin in 2016.
Clyde is home to the world’s largest washing machine manufacturer. The Whirlpool Corporation has operated on the same property in Clyde for more than six decades.