In a bid to make London’s Square Mile more sustainable, its homes and offices will be warmed by drawing heat from over 650ft below the streets of the City.

As one of the largest low-carbon heating systems in the UK, which forms part of a £4m scheme, the system will produce the same amount of heat needed by 2,300 average UK homes – with 50 per cent fewer carbon emissions.

“Heating in buildings forms a significant part of the UK’s carbon footprint, so changing how we warm and cool our homes and workspaces is a vital part of eradicating our contribution to climate change by 2050,” energy minister Lord Callanan said.

The system, built by energy company E.ON UK, will be housed in the Port of London Authority building on Charterhouse Street next to Smithfield Market.

As well as using a heat pump and three 650ft boreholes to tap the Earth’s natural warmth from below the Square Mile’s bustling streets, a nearby gas plant will also help with supplies.

Heat networks that do not rely on fossil fuels are expected to become more common under the government’s plan to cut the UK’s reliance on climate warming fuels.

The UK’s bid for low carbon, sustainable heating will push energy giants to ‘reimagine’ how homes get the energy they need, chief executive of E.ON UK, Michael Lewis, said.

“In taking the next step and installing heat pump and geothermal technology at Citigen we’re making a powerful statement of what can be done to reduce carbon usage on a large scale.”