A derelict farm building on Dartmoor is about to become the focus for a renewable energy scheme which could see hotels, businesses and maybe even a prison becoming carbon neutral – at least as far as their heating is concerned.

At present, Andy Bradford, tenant farmer at Brimpts Farm conference centre and holiday complex at Dartmeet, pays oil bills of £12,000 a year. Meanwhile, wood from extensive Forestry Commission plantations right on his doorstep is being transported to Wales – 10,000 tonnes of it every year.

Now Mr Bradford is going to install a 150-kilowatt wood chip boiler (once he has converted the cowshed) and run it off some of that wood. To heat the complex, with the farmhouse, tourist cottages, conference rooms, tearooms – not to mention the hot tub and sauna – will, he believes, need 80 tonnes of timber a year.

It is hardly rocket science and the benefits are so attractive, it is difficult to imagine others will not soon be following suit. Unlike fossil fuels, burning wood is carbon neutral. The CO2 given out during burning exactly matches that captured during the trees' lifetime. There is the warm feeling of using a planet-friendly heating system. add to that the tangible benefits of a 40 per cent cut in heating bills and you can see why Mr Bradford is smiling.

'To me it fits so well with the national park and our environment. Also, you don't have the vulnerability of being reliant on the oil price, which can vary up to 25-30 per cent. It'll be nice to be independent of that,' he said.

The total cost of the project is £75,000. Renewable Energy for Devon (RE4D) has given £10,000, the Centre for Renewable Energy in Bristol another £10,000 and the Carbon Trust has made a £50,000 interest-free loan, repayable over five years.

If the idea of being condemned to fill your days feeding the boiler is making you wince, think again. The only way Mr Bradford could sell the plan to his partner, Gabrielle, and staff of ten was to assure them that no (or not much) physical work would be involved. The wood chips are fed into the boiler from an attached holding bay thanks to a giant corkscrew. The holder is capable of holding ten tonnes – four to six weeks' supply. The boiler itself is made by Binder, an Austrian company.

According to Mr Bradford, the concept is well-accepted on the continent. He visited one scheme in Switzerland, which uses wood from a 80km radius to heat a whole village and hospital. Now the idea is catching on quickly here as well. Exmoor already has schemes up-and-running and renewable energy firms are popping out of the woodwork.

Mr Bradford has put the plan out to tender and hopes to have it up-and-running by the autumn. He said: 'We will become a district demonstration site. Until you physically see it, it is a job to describe. The next stage is "clustering", where we help other businesses to develop wood energy.'

Realistically, he said, oil bills needed to be at least £10,000 a year to make it worthwhile. Once a few more people participate, it will make sense to invest £20,000 in a wood chipper instead of hiring contractors, to convert timber into a usable form. The Forest Inn, Hexworthy, is showing signs of interest. so, too, is his landlord, the Duchy of Cornwall. It would be great, he says, if Dartmoor Prison also decided to get on board. 'It will be nice for Dartmoor to have a renewable energy project.'