CHP systems use gas or biomass to generate electricity, but then supply the "waste heat" and electricity from the production process to local communities.
Commenting on the deal, SSE chief executive Ian Marchant said: "Our investment in Vital Energi demonstrates our commitment to providing sustainable solutions for our customers throughout the UK and supports our existing Energy Services business.
"We believe that towns and cities can play a significant role in fighting climate change, through the use of more efficient community heating projects which can also generate electricity."
SSE is one of the UK's biggest energy suppliers, with over eight million gas and electricity customers across Britain.
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