A £25 million low carbon heating and electricity system is being developed in Leeds by SSE Energy Solutions.
The scheme will supply Aire Valley, home to 400 businesses – cutting their carbon emissions.
Yorkshire Water is set to benefit from the new system, which could save it up to 5,000 tonnes of carbon emissions each year – the same as the electricity use of more than 3,000 homes.
SSE Energy Solutions is looking into ways to convert captured waste heat to be redistributed through the piping to local businesses.
Jody Pittaway from SSE 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.”
West Yorkshire Mayor, Tracy Brabin, added: “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 [becoming] a net zero carbon region by 2038 at the latest.”