Gateshead Energy Company, which operates the council-owned district energy scheme in the northeastern town of Gateshead, is to add 4 MW to a virtual power plant run by DSR firm Flexitricity.
The project will receive more than £60,000 ($75,000) per year over a 15-year period by providing capacity to National Grid, Flexitricity said in a statement.
The £14m district energy scheme is currently being commissioned, and is planned to be fully operational by mid-2017.
Gateshead Councillor Martin Gannon said: ‘Once we realized that we could bring more revenue into the project by providing capacity to the National Grid – without changing our day-to-day operations – the decision was made for us.
‘It’s win-win for ourselves and our customers. Not only does it support our business model of providing low cost, low carbon energy to homes, organisations and businesses, but Flexitricity’s system works seamlessly with our own, meaning we can provide heat and power to our customers while supporting critical national infrastructure.’