Power from dairy manufacturing waste

The Murray Goulburn Co-operative expects to save up to $600,000 a year in energy costs by turning waste from dairy products into biogas at its Leongatha facility in Victoria.

The biogas is used to generate electricity, which is used onsite.

Cost and savings

  • The biogas system cost $1.82 million to install over 18 months. The company received support from Sustainability Victoria ($140,000 from the Renewable Energy Support Fund) and SP Ausnet.
  • The payback period is expected to be three years or less.
  • When the capital cost is paid off, the company expects to save $600,000 a year in energy costs. The savings are due to reduced need for electricity from the grid, plus income from renewable energy certificates earned.

Other benefits

  • 99% of the methane gas generated is destroyed.
  • Greenhouse gas emissions from grid electricity are offset by the electricity generated.
  • Untreated effluent is no longer going into Venus Bay.
  • Waste treatment now fully complies with Victoria’s Environment Protection Authority requirements.

How the system works

At the Leongatha facility, local milk is used to produce dairy products such as butter, cheese, milk powder and Devondale Milk.Waste from the manufacturing process is put into an anaerobic biomass digester, which creates biogas—a renewable energy source consisting mostly of methane and carbon dioxide.

The digester can produce about 9600 cubic meters of biogas per day.

A machine called a scrubber removes impurities and moisture from the biogas.

The biogas runs two engines that can produce 760 kilowatts of electric power per year.

All of the power generated at Leongatha is used onsite, with no export to the grid.

The company plans to install a steam turbine for energy co-generation, which is expected to produce up to 1000 kilowatts/year.

Find out more

Victorian Department of Primary Industries’ detailed case study, including lessons learned, is published by EcoGeneration (2010).

The Victorian Bioenergy Network lists the project in its directory of operational bioenergy projects in Victoria.


18 Yarragon Road, Leongatha, Victoria, 3953
Phone: 03 5662 9666