A HYDRO-ELECTRIC power station could be built on the banks of the River Swale.
Experts believe even a modest plant would provide enough power for 140 homes.
A feasibility study into a hydroelectric power station at Easby, near Richmond, North Yorkshire, found the £2.5m project could pay for itself within 20 years.
The study, by Energy for Sustainable Development, was commissioned by the Richmond Swale Valley Community Initiative (RSVCI).
The scheme would reconstruct a 12th Century weir, near Easby Abbey.
Water would be channelled through a turbine to drive a generator housed in a small building on the river bank.
Mark Whiteley, project manager for Energy for Sustainable Development, told a public meeting at Richmond town hall this week, that a small plant could run at capacity for six months of the year.
As river levels dropped, the plant would run at a reduced level and would probably be switched off in July and August.
It is believed reconstruction of the weir mayincrease leisure use of the Swale. Boating, which took place before the weir crumbled, could be reintroduced. Canoeing, fishing and swimming are also possibilities.
The development could also protect the riverbank, which was repaired last year by the Easby Riverside Regeneration project with money raised by the community.
Experts estimate it would cost about £2m to rebuild the weir and a further £500,000 for the hydroelectric plant. The system would generate £43,000 worth of electricity a year.
Two other locations for the power plant were rejected.
The fall of water was found to be too shallow at Temple Grounds and the Fosse was too popular with visitors to see water levels drop across the waterfalls.
RSVCI has proposed that the power could be used to light historic buildings in Richmond.
Colin Grant, Richmond town manager and a member of RSVCI, said: "This is an extremely exciting project, but it is in its very, very early stages."
He will discuss the project with the Environment Agency later this month.
Studies looking at site access, environmental impact, tourism and planning issues will now go ahead.
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