Garioch District Heat, a not-for-profit organisation, hopes hook up 10,000 homes, businesses and public buildings to the new system by 2025.

The project is to be donated from Agile Energy, which gained planning permission to build a £200 million incinerator at Thainstone Business Park.

The development will be capable of generating up to 35MW of electricity and up to 80MW of heat for the district heating network.

The proposed network for Garioch would take residual waste heat from non-recyclable waste to provide affordable heat to the community, The Press and Journal reports.

Garioch District Heat chairman George Niblock said: “Once the plant has generated the electricity that they’ll put into the grid, there is a low level of heat available which in the old days just to be vented back into the atmosphere.

“But nowadays because of environmental considerations, they want to utilise that heat. Agile Energy has offered to gift the heat to the community and we are accepting that very gratefully.”

It is hoped that the development will be extended to rural areas including Hatton of Fintray, Chapel of Garioch and Old Rayne with rechargeable heat batteries.

Garioch District Heat will now seek to raise around £750,000 for the development stage of the project followed by the rest of the money.

Mr Niblock said: “For a massive project such as this, we reckon it will be in the range of three tranches of £10 million. It takes a lot of revenue money to plan that. We need legal advisers, project managers and technical specifications before we can get the thing built.

“We are currently in discussion with the Scottish Government to get the staged funding to start looking at the project.”

He said: “It’s not a lot of money when you consider that at this point in time, using the government’s own figures, we reckon at least £20m a year goes out of the Garioch community to pay for heat and hot water.

“We are going to retain that £20m per annum in Garioch. We don’t know how much we’ll get from grants, but there are several systems available. Heat networks are part of the government’s priority.”

Garioch District Heat has been assisted by Energy4All, which works with communities to develop community-owned innovative renewable energy projects, helps raise the funds needed for the projects to go forward, and provides advice during the construction process.

Mr Niblock continued: “The advice we’ve had from Energy4All at this point in time is there are many pension funds and other sources of long-term investments looking for more ethical and carbon-free investments.

“Their advice to us is that we should have no significant problems. At the moment there are 30,000 homes in Scotland on district heat networks. Within the next seven years there’s got to be one million homes.”

However, Mr Niblock said that there are no guarantees over the prices users could be paying. But he added that he thinks will be cheaper than what householders are currently charged by their gas suppliers.

He said: “We haven’t done the sums, so we can’t say what the cost is going to be. Our expectation is that it’s going to be cheaper than gas prices. It’s a win-win for the community and a very exciting opportunity.”