Work is under way to create a mine water heating system which will supply hundreds of homes.
Water from disused mines will eventually be used to heat houses in a new community near Seaham in County Durham.
Half the 1,500 homes on the Seaham Garden Village development, which will be built over the next 10 years, will be heated through an ultra-low carbon district heat network.
Councillor Mark Wilkes, Durham County Council cabinet member for neighbourhoods and climate change, said the project will have "significant environmental benefits".
Water is extracted from former coal workings to protect the groundwater aquifer which provides drinking water to households.
This water is extracted and treated to remove heavy metals before being discharged out to sea.
The heat in the water currently dissipates into the atmosphere but, under the new project, it will instead feed into the heat network.
Miners' legacy
Durham County Council, the MRA and Karbon Homes are working together on the scheme to heat 750 affordable homes at Seaham Garden Village, with Vital Energi designing, building and operating the heat network.
The mine water project has received £4.3m from the government's Heat Networks Investment Project, including £3.23m towards construction.
Wilkes said the mine water will be "there for the long-term, for decades".
"If you think about oil and gas, these are finite resources that are coming from overseas," he said.
"This is right here in County Durham. It's that legacy from all of those people who worked in the mines."
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