Southwark Council in London is looking at the possibility of heating nearly 3,000 homes across five estates using waste from a nearby energy plant.
The council is working with its waste and recycling partner Veolia Environmental Services, which will play a key role in managing the project.
The contract would mean both a cheaper and much more energy efficient method of heating some 2,700 homes, and there is potential to bring substantial environmental benefits by reducing carbon emissions by 70% and nitrogen oxides emissions by 90%.
SELCHP is the South East London Combined Heat and Power facility, and is one of only a few such facilities of its kind in London.
Councillor Barrie Hargrove, cabinet member for transport, environment and recycling at Southwark Council, said:”This scheme has the possibility of providing renewable energy to thousands of homes, in a much more environmentally friendly way than before.
“Residents will not notice any difference in their heating, except for the knowledge that it will be provided in a cheaper, more local, and more secure manner.”