The energy produced by power plants that provide both heat and electricity could be almost tripled in the UK, according to an analysis of nine industrial sites. So-called combined heat and power (CHP) plants are far more efficient than conventional power stations because they harness heat that is normally wasted, by piping it to industrial or domestic users.

The report was written by Pöyry Energy Consulting for Greenpeace, and the additional CHP energy generation it suggests is feasible on the nine sites is equivalent to the energy needs of more than two-thirds of UK homes and half the nation's natural gas imports. Currently 5.5GW of electricity is produced by CHP plants, but the new report suggests there could be up to 16GW more, the equivalent of 8 nuclear power stations.

The sites included clusters around Grangemouth in Scotland and in the Humber. The latter area already has the largest CHP site in Europe, producing 730MW of electricty. The report suggests an additional 2,550MW could be produced there. Building CHP stations near industrial sites means that the heat can be piped into factories or buildings as high pressure steam or hot water. Greenpeace said that the increased efficiency would reduce the UK's carbon dioxide emissions by 10m tonnes a year.

Tim Warham, principal consultant at Pöyry, said: "We were surprised at the large technical potential for industrial combined heat and power we encountered. Provided the policy framework is right, CHP could make a huge contribution to securing power supplies for UK."

John Sauven, Greenpeace executive director, said: "Energy technologies like industrial-scale CHP beat nuclear and old-style coal plants on every front. They're cheaper, they're much quicker to construct, they'll cut more carbon emissions, they could halve gas imports and they won't leave behind an expensive radioactive legacy." He added that heat was key because it accounted for 49% of the UK's final energy demand, compared to just 17% for electricity. Greenpeace says that CHP had been neglected in the UK as part of the energy mix, noting that the Netherlands and Denmark are 40% powered by CHP.

The government recently held a consultation on a heat strategy for the UK and is expected to publish its results later this year. A spokesperson for the Department for Business, Enterprise and Regulatory Reform said on Thursday: "The government recognises the benefits of the combined production of heat and power. Our target is to install 10GW of electricity of good quality CHP by 2010 and with current generation from CHP at 5.5GW, we're over halfway there."

At the launch of the report, Liberal Democrat leader, Nick Clegg, is expected to highlight the record high prices of oil and gas, saying these have brought the UK's energy crisis into focus. He will say that CHP makes both environmental and economical sense. "The political debate to address this crisis is at a crossroads: do we stick with old centralised technologies like nuclear power or should we instead be investing in efficient localised energy production and usage?"

Graham Meeks, director of the Combined Heat and Power Association, warned: "Without effective and enduring incentives to make these investments, the fact remains that our next generation of power stations will simply replicate the failings of the past and continue with a needless waste of valuable heat. It really is time to stop fiddling as gas burns."