A £1.5m grant has been secured by Nottingham City Council to expand the district heating system into the Southside regeneration zone.

Council-owned company EnviroEnergy runs the heat station in London Road, which uses Eastcroft incinerator to provide heating and electricity to thousands of local customers.

The new cash from the Homes and Communities Agency's low carbon fund will enable a new main to be installed – to provide a renewable energy source for new private developments.

It is envisaged it will serve proposed developments such as Sovereign House and the redeveloped train station.

Coun Katrina Bull, portfolio holder for environment and climate change, said: "It is excellent news that the district heating system will extend to Southside. This is a key regeneration zone in the city.

"The city council also has a target to be carbon neutral by 2016. This project will help meet this target."

Margaret Allen, East Midlands regional director for the agency, said: "This is extremely positive news and is testament to the innovative approach taken to reduce the environmental impact of house building and regeneration.

"Our team is looking forward to working with Nottingham City to deliver the proposals."