The capital's refuse supply could be used to provide power for up to two million homes, it has been reported.
A study conducted by the London Assembly has indicated that some of the 22 million tonnes of waste generated in the city each year could be converted into electricity potentially leading to a reduction in gas and electricity bills.
At present, only a fifth of all rubbish is recycled in London, with more than half ending up in landfill, it is reported.
Murad Qureshi, chairman of the London Assembly Environment Committee, said the city's waste management is "unsustainable and uneconomical".
He added: "The mayor must take the lead on further measures to help jump-start waste management step change.
"Waste to energy technology will help the capital reduce greenhouse gases, cut down on waste sent to landfill, increase renewable energy generation, benefit the economy and create jobs."
Last week, consumer body Which? called for greater levels of transparency over energy prices.
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