Vancouver will insist that new buildings in most areas of the downtown peninsula be hooked up to a low-carbon alternative-energy utility.

The requirement, which will cover northeast False Creek, Chinatown, the West End and Downtown South, is part of the city’s greenhouse-gas reduction plan.

The city has reserved a large piece of city-owned land for the energy provider, Creative Energy Canada Platforms Corp, to build a new energy centre that would produce heat from biofuel such as wood chips. The land is in the False Creek Flats.

Creative Energy is owned by developer Ian Gillespie, whose Westbank Projects is one of the largest and most influential builders in the city. Last year, Gillespie paid $32 million to buy Central Heat Distribution, a steam heat provider regulated by the B.C. Utilities Commission that serves more than 210 buildings in the downtown core. He intends to use the company as the backbone for Creative Energy’s larger low-carbon plans, but before he first needs to convert the existing six natural gas boilers to low carbon fuel.

The city’s ruling party, Vision Vancouver, has long pressured Central Heat to convert, noting its boilers pump out 70,000 tonnes of greenhouse gases annually, making it the single largest source in Vancouver. The company declined to convert until Gillespie stepped in and bought it.

The city selected Creative Energy from six applicants for its new district energy plan.

In a report to council Tuesday, Brian Crowe, the director of water, sewers and district energy, said Creative Energy will begin converting to a low-carbon source. In order to do that, it needs a large industrial property near rail lines or water. The city and Creative Energy studied properties on Port Metro Vancouver lands and the False Creek Flats, and settled on a large piece of land owned by the city on Industrial Avenue.

The city agreed to reserve the property for 18 months while the company makes a business case for the new plant. If the deal goes ahead, the city will lease the land to Gillespie’s company at market rates, Crowe said.

The city and Creative Energy have already signed a deal to create a neighbourhood utility in Northeast False Creek and Chinatown and are negotiating a franchise agreement for Downtown South. Next year, they expect to finish negotiations for new systems in the West End and Downtown Eastside. All of these areas would be served by the new plant.

Under the terms of the deal, the city would draft bylaws requiring mandatory connection to Creative Energy’s system for all new developments. The company will have to apply to the B.C. Utilities Commission to create each new utility. The commission would regulate what Creative Energy will charge.

Crowe said the downtown core will be excluded from the mandatory hookup requirement because it is already well-served by the existing system.

Unlike the city-owned district energy utility in Southeast False Creek, which recovers waste heat from sewage for passive heat distribution to the Olympic Village, Creative Energy needs to use combustible materials to provide high volumes of steam to service its existing customers.