SSE Energy Solutions is to develop a new £25m low carbon district heating and electricity scheme in Aire Valley, Leeds.
The energy network is planned to be served by the new Skelton Grange energy-from-waste facility which is currently under construction.
SSE said it will explore potential opportunities to capture waste heat from the waste-to-energy plant and distribute it via insulated pipes under the ground to local businesses, including Yorkshire Water.
The project is forecast to save 5,000 tonnes of carbon emissions per year alone – the equivalent annual electricity use of 3,200 homes.
Located south of Leeds city centre, Aire Valley is home to around 400 businesses.
Tracy Brabin, the Mayor of West Yorkshire, said: “This low carbon energy network is exactly the type of investment we need to see in West Yorkshire if we are to meet our ambitious target of a net zero carbon region by 2038 at the latest.”
Sector Director for Heat Networks at SSE Energy Solutions Jody Pittaway, said: “We know the private sector has a big part to play and we stand ready to deliver on that potential.
“We’re excited to be part of Leeds and West Yorkshire’s transition to a zero-carbon heating future and exploring ways of unlocking new and plentiful heat sources that will benefit its communities, businesses and beyond.”