Rising energy bills pose a big threat to the university’s investment for teaching and research.
The renewable energy plant at Guardbridge will extract and transport hot water four miles underground to St Andrews for the purpose of heating and cooling the labs and residences within the St Andrews campus.
The Scottish Funding Council offered its support for the Sustainable Power and Research Campus (SPARC) project in the form of a £10m grant.
The university is planning to submit its planning proposal by the end of 2013, following which a public consultation for SPARC will take place.
The works on the Sustainable Power and Research Campus (SPARC) site are planned to begin next year with the Renewable Energy Centre complete and operational by December 2015.
According to the university, the scheme would help the institution’s effort to become the UK’s first carbon-free university.
University Quaestor and Factor, Derek Watson, said: “It has taken us much longer than we originally anticipated to crystallise our thinking on a renewable energy centre and we are grateful for the patience and encouragement shown to us by the local community over the last three years.
“Guardbridge represents a major strategic step for the University. We are committed to becoming carbon neutral and this large industrial site lends itself to the creation of a range of renewable energies, which are vital to our efforts to remain one of Europe’s leading research institutions.
“There is also an ideal opportunity to establish a Knowledge Exchange Centre for spin-out, local companies seeking affordable accommodation and for prototype testing.
“We believe the diverse range of potential uses at Guardbridge has the capacity to re-establish this huge site as a key economic centre in Fife. We will consult closely with the community as our plans take shape.”