The City of Sydney will use trigeneration as a low-carbon energy network to cut greenhouse gas emissions.

Final negotiations will take place with Cogent Energy, a subsidiary of Origin, to power central Sydney after a tender process and negotiations with several other companies.

According to a University of Technology Sydney study, the project could save up to $1.5 billion in avoided capital investment in coal-fired power stations and grid upgrades.

Mayor Clover Moore said the taking most, if not all, of city buildings off the coal fired grid is part of a 2030 goal to cut carbon emissions by 70 per cent.

“Trigeneration runs on natural gas and produces low carbon electricity, heating and air-conditioning for clusters of surrounding buildings,” Ms Moore said.

She said trigeneration is nearly three times more energy efficient than coal-fired power stations and can reduce greenhouse gas emissions by 40 to 60 per cent.

According to Ms Moore, it will reduce energy costs because it avoids part of the ‘network charges’ which currently make up 50 per cent of the average electricity bill.

“These charges are set to rise to 60 per cent in the next two years as network companies upgrade the poles, wires and substations of the electricity grid,” she said.

Sydney already has stand alone trigeneration plants used by locally based companies including GPT Group, Stockland, Investa and Westfield, although the council’s plan includes precincts and city blocks not limited to council buildings.

Instead of only council buildings, the first of four ‘low-carbon zones’ are a part of the package being negotiated by the council and Cogent Energy.

These city locations are Martin Place and George Street in the CBD North; Town Hall Precinct in the CBD South; Pyrmont, Ultimo and Green Square.

The plan is targeted to deliver the system’s 360-megawatts-or-more target to supply energy the entire local government by 2030, with initial plans for council buildings and privately owned buildings in the city’s low-carbon zones.