Durham County Council has secured a £110,000 grant to study the feasibility of using the naturally generated heat from underground water in Horden near Peterlee.
One idea is to use mine water pumped up at temperatures of 20C to heat greenhouses to aid food production.
Mark Wilkes, cabinet member for climate change, said there could be some "fantastic opportunities".
The Coal Authority is constantly pumping out disused mines across County Durham to stop water levels rising and prevent it polluting drinking supplies found higher up the water table.
Currently the mine water, which has been naturally heated by geothermal energy, is stored in ponds, cleaned of iron deposits and pumped out to sea, but the council is considering utilising the natural heat.
Geothermal energy in food production is not a new idea and has been used for decades in some countries, notably in Iceland where hot springs power greenhouses for growing all year round.
