Plans to set up a green district heating scheme in Birmingham are moving a step forward with the appointment of a private sector partner.

Utilicom Ltd has been named as the preferred partner for the Energy Services Company (ESCo) following a procurement process.

The company will deliver the Combined Heating and Power (CHP) district scheme in the Broad Street area.

Utilicom is a privately owned energy services company with over 25 years experience operating of some of the country's largest and well known district energy schemes.

CHP is a process where electricity is generated and the resulting heat, which is normally wasted, is used in a district heating scheme to provide heating, cooling and hot water.

It is a recognised way of decreasing CO2 emissions, and it is estimated that the scheme proposed for Birmingham would reduce the city's emissions by 20 per cent by 2010.

The CHP plant would be situated at the International Convention Centre and the scheme will provide energy to two city council buildings - the Council House and Paradise Circus area - as well as the Town Hall, the Repertory Theatre, the Hyatt Regency Hotel, the ICC and the National Indoor Arena.

The city council's deputy leader, Coun Paul Tilsley (Lib Dem Sheldon), said, "This is an excellent example of how the city council is taking a lead in tackling climate change.

"This scheme is really exciting, as it will help make a difference to the environment in which we all have to live.

"I look forward to seeing it become a reality, and hope it is the first of many. We shall be using it as an example to encourage major developers across the region to address sustainability issues."

Utilicom chief executive Simon Woodward said: "We are delighted to be working with Birmingham City Council and its partners on this exciting flagship project.

"This will be an exemplar scheme for other local authorities throughout the UK to follow.

"The city council should be congratulated on its vision and determination to deliver large sustainable energy projects such as this. "