More than eight million people live and work in London. A cultural, sporting and financial capital, Europe's largest city is also looking to be a world leader when it comes to sustainability and energy efficiency.

Authorities have set ambitious environmental and energy usage targets. They hope to slash carbon emissions by 60 percent by the year 2025, while Boris Johnson, the Mayor of London, wants to ensure that a quarter of London's energy is supplied from "decentralized sources."

The energy sector thrives on new ideas, and the Mayor of London's Low Carbon Entrepreneur competition, sponsored by Siemens, has been seeking out the city's brightest students and their innovative energy ideas.

"The incredible students behind these green innovations are the future leaders who will be powering London's booming green economy," Johnson said.

Here, we look at this year's finalists, including the winner. Will their ideas help ensure a sustainable future for London?

By Anmar Frangoul, special to CNBC.com

"E-waste" -- electronic goods that are no longer needed -- is becoming a serious issue. According to StEP, a United Nations backed initiative, by 2017 E-waste around the world will amount to 65.4 million tons.

Founded by Imperial College London students Alireza Tahmasebzadeh and Serge Vasylechko, BLOCKS is an innovative take on wearable technology that could help users save money as well as reduce waste and CO₂ emissions from manufacturing.

Described by BLOCKS as, "a fully customizable smartwatch," users will have the ability to choose the type of hardware – from heart monitors to GPS trackers – they need, when they need it, instead of being saddled with technology that is irrelevant to them. As such, people would never need to throw away their devices.

According to London Undergound, 1.265 billion passengers used the Tube in 2013/14. With 3.5 million people on the network every single day, it's little surprise that a considerable amount of rubbish and waste is left behind.

Zack Daniels and Alex Pullen, two Product Design students from London South Bank University, have come up with the idea of installing 'magazine holding infrastructure' on London's tube trains to encourage people to share free newspapers and magazines rather than throw them away after reading.

"On the three main tube lines around 9.3 tons of waste in the form of discarded free newspapers are gathered every day," Daniels told London South Bank University's website.

"Our idea is to create and facilitate a formal method for commuters to be able to share their papers, which would ultimately reduce the need to print so many copies."

Founded by Dominic Jacobson and James Winfield, two students from Imperial College London, Crowd Power Plant was the overall winner of the Low Carbon Entrepreneur 2014's first prize of £15,000 ($24,720).

According to their website, Crowd Power Plant's objective, "is to revolutionize the U.K.'s energy mix." This is done by aggregating surplus energy from small renewable providers in the U.K., creating a "crowd".

From a position of collective strength, this "crowd" can then sell clean electricity to both the wholesale market and suppliers, earning a better price and sharing profits.

According to the Carbon Trust, 20 percent of the U.K.'s electricity output is used up by lighting while, "over 75 percent of lighting installations are thought to be out of date and unable to meet current design standards."

Another finalist from Imperial College London, Light-Fi offers up an innovative solution to the problem of lights being left on in the city's office buildings overnight.

Light-Fi is proposing a fully automated lighting system, linked via an intranet, that would ensure no lights being left on after hours.

Three students from the University of Greenwich – Andrew Ndungu, Aleksandra Gajda, and Arturas Niemcinskas – came up with the idea of 'greening' London's River Thames by installing a floating farm on its waters.

Designed with the environment in mind, London's Food Farm would make use of solar and wind power, as well as a sustainable food production technologies. By growing food in the capital, CO₂ emissions from food transportation would be dramatically cut.

Commenting on the floating farm, Deborah Sims, Senior Lecturer at the university's Faculty of Engineering & Science, said, "Their idea could 'green' the river, [and] provide organic healthy produce to local residents and restaurants."

The brainchild of no less than seven Imperial College London students, The Energy Defenders are described as, "cartoon superheroes designed to influence the habits of the next generation and encourage responsible energy use."

In the past, cartoon characters such as Captain Planet (pictured) have encouraged children to think about the environment. The Energy Defenders team hopes to use their own set of cartoon superheroes to increase environmental awareness among young people.

Devised by Royal College of Art students Giulio Ammendola, Seungyeon Ryu, Leo Green and Miki Asatani, SOLO, or Social Logistics, offers an alternative to traditional courier services.

Instead of using vans, motorbikes and cars to deliver packages, they propose using commuters.

"Every day over 24 million journeys are made using public transport," Green told judges. "That got us thinking: what if we could harness this power of a crowd and create a new form of courier network?"

By using commuters instead of cars, SOLO hopes to reduce pollution in the capital.

Michael Barsties, a recent graduate from the University of West London, devised a concept which would use London's vast Tube network to transport goods throughout the city during off peak hours.

If implemented, Barsties' system would get cars and lorries off the road, cutting CO₂ emissions and pollution in the process.

"This has been a great opportunity to become involved in shaping London's future," Barsties told the University of West London's website.

"Students and recent graduates are the next generation and they can influence the world to become more carbon friendly," he added.

Lee Wilshire, a student from London Metropolitan University, proposed using current infrastructure on London's waterways – 'dumb' barges – as recycling facilities.

"It's my belief that in the 21st century this has the potential to become new, green infrastructure that provides an equally valuable role to the city," Wilshire told judges.

Harold Craston and Kirsty Kenney, two students from the London School of Economics and Political Science's Department of Geography and Environment, came up with an idea to turn London's iconic telephone boxes into solar-powered public charging points.

Designed as a free service, it is hoped that SolarBox – which came second and won £5,000 in the competition – will both restore disused infrastructure and offer a practical solution to the increasing problem of low battery life on smartphones.