The Sutton Decentralised Energy Network (SDEN) will use low-carbon energy from waste from a new Energy Recovery Facility being built in Beddington.
Diverting waste to the facility will replacing a landfill site that is almost full.
SDEN has confirmed it is working on a deal with Barratt Homes, which is preparing to build some 725 new homes in the Felnex development (pictured, artist's rendition) in Hackbridge.
Calling on developers in Sutton, Merton and Croydon to join the network, it has the potential to provide sustainable heating and hot water to 19,000 homes, a statement from the council says.
Councillor Jayne McCoy, Chair of the Housing, Economy and Business Committee at Sutton Council, said: ‘The SDEN will offer developers in South London a sustainable alternative to fossil fuels for the provision of heat and hot water. There are lots of potential benefits including lower construction costs, lower green taxes, better resilience, no ongoing plant maintenance and increased lettable floor space.’