The Liberal Democrats want mine source heating to be investigated as fuel prices rise steeply and because it is a more environmentally friendly way of producing energy.
It works by taking the heat from water stored deep underground in former mines and using it to heat homes.
The Lib Dems first raised the prospect at a council meeting in October and are now calling for it to be looked at urgently as fuel prices continue to rise.
Coun Barbara Masters said: “The council needs to investigate any innovative and sustainable forms of powering heating systems that are available and this one would use the infrastructure already present in Sheffield.
“This just makes sense, will save people money and saves burning fossil fuels.
“Mine water heating is being promoted by the Coal Authority working with academics, local authorities, central government and others.”
Coun Masters said the system was already being used to heat homes in the North East.
“Building on the existing district heating system would allow us to reduce Sheffield’s carbon footprint.”
“This could be a source of a totally renewable heating and we are urging the Executive to explore the potential as a matter of urgency as other councils are looking into this now.
“This could be put into housing projects as they are being built and may avoid installing expensive and environmentally damaging gas heating systems which will then have to be replaced.”