Cofely District Energy will take the role of a 'heat shipper', buying heat from the existing waste-to-energy plant in Whitley on the edge of the city centre and 'shipping' it, via a 6.6km network of buried pipes to consumers in the city centre.
The 'Heatline' low-carbon district heating network will be installed in Coventry city centre and the heat will be sold to scheme members.
Phase I will see buildings such as the Council House, Herbert Art Gallery and Museum and Coventry Cathedral being supplied with heat and hot water. It is planned to be operational by September 2013. A second phase will to extend the scheme to be able to benefit tenants in social housing and other residential developments, as well as to local businesses that want to invest in the scheme.
The scheme has received £2.3m of investment from the government's Homes & Communities Agency for installation of the infrastructure.
Councillor Abdul Khan, cabinet member for sustainability and local infrastructure, said: "By using the surplus energy from the incinerator in Whitley, we will be able to keep our fuel costs low which will benefit the taxpayer and also the environment as it will save around 2000 tonnes of carbon per year - the equivalent of fuelling 400 Coventry homes for a year. The project will help grow the city's low carbon economy and help draw companies here who wish to reduce their carbon footprint and bring investment into the city, as well as benefit the fuel poor and other residents who want to have security of energy prices."
Simon Woodward, CEO of Cofely District Energy, added: "I am delighted that Cofely District Energy has achieved another UK first with this ground-breaking project and we are very excited at working with Coventry City Council on the Heatline scheme. As well as the buildings that have already been earmarked for connection to the scheme, there is great potential to extend the heating network to residential properties and new developments in the future. I am also delighted that this will be our third major district energy scheme in the Midlands, following on from our very successful schemes in Birmingham and Leicester."