The government agency responsible for the UK's network of canals and rivers yesterday unveiled ambitious plans to generate enough renewable energy to power 45,000 homes through the installation of 50 bank-side wind turbines and a number of micro-hydro projects.

British Waterways said it would work with Partnerships for Renewables – a joint venture between the Carbon Trust and HSBC dedicated to undertaking renewable energy projects on public land – to identify suitable locations across its network of 2,200 miles of canals and rivers.

Under the proposals, the company will aim to install 50 wind turbines with a combined capacity of 100MW, as well as an undisclosed number of small-scale hydro power generators.

British Waterways is presenting the project as a major commercial opportunity and is expecting to generate about £1m a year in revenue following the completion of the project in 2013.

A spokesman for the agency said that wind energy would represent the main component of the project. "There are a number of weirs on the network where we will look at microhydro, but, by definition, the water flow in the canals is slow so the bulk of the energy will come from the wind turbines," he said.

He added that Partnerships for Renewables would now begin work on selecting suitable turbine locations with good wind profiles and grid connections.

The proposals could face opposition from local residents' groups, but the spokesman insisted that the agency was confident planning permission could be attained.

"We're mindful of local issues and will go through local planning processes and work closely with communities," he said. "But there is a sense that attitudes to renewable energy are changing and people who use the waterways tend to be aware of environmental issues."

Stephen Ainger, chief executive of Partnerships for Renewables, said that he hoped the partnership with British Waterways would provide a template for other public sector bodies to follow.

"When Partnerships for Renewables was set up by the Carbon Trust it was in the knowledge that the public sector owned more than 10 per cent of the land in the UK, but was having real difficulty translating this resource into renewable energy generation," he explained. "We believe that this announcement marks the beginning of a trend in the public sector to embrace the potential of renewable energy generation."

The move was also welcomed by green groups who urged other government bodies to follow suit.

"Community-scale renewable energy projects such as hydropower schemes and wind turbines have a huge role to play in reducing our dependency on fossil fuels and helping Britain to develop a low-carbon economy," said Friends of the Earth's energy campaigner Nick Rau. "It is clear that renewable energy generation development could offer substantial economic and environmental benefits right across the public sector and we hope that other public organisations follow the lead set by British Waterways."