Viridor has begun a month-long consultation over proposals to increase the capacity of a £76m incinerator from 65,000 tonnes a year to 85,000 tonnes.
Permission was initially granted in 2010 to build a 65,000 tonnes-per-annum energy from waste (EfW) plant at the Fengate site, but the was delayed after a bidding company pulled out.
In August, the council gave Viridor preferred bidder status in preference to rivals Kier, following a special meeting called to scrutinise the bidding process.
The company submitted a planning application to Peterborough City Council that would increase capacity at the site while reducing the size of the facility by around 40%.
When functioning it will be able to generate 7.25MW, enough to power around 15% of homes in the city. The facility is expected to be operational in 2015.
Viridor is contacting local residents and has set up a dedicated website to get feedback on the new plans.
Peterborough produces around 90,000 tonnes of waste per year, which is set to increase to 140,000 tonnes by 2040. Currently, 43% is recycled, with the remaining 50,000 tonnes of waste sent to landfill.