This article covers the development of a combined heat and power scheme, with an associated community heating network, in the centre of the city of Newcastle upon Tyne. The proposed scheme comprises a gas-fired gas-turbine-driven electricity generator to provide electrical energy to a major hospital complex and the adjacent university Waste heat from the gas turbine would be used to displace or supplement existing boiler plant in the hospital and university and also in those municipal buildings (including a second university) in the centre of the city connected to the community heating network. The technical and financial evaluation work carried out during the first phase of the project is described. The stages in. the development process which would lead to the establishment of the necessary agreements with the heat and electricity consumers are discussed.