Glenarlea Farm, a Fortuna Group dairy farm is seeing the benefits of cheaper power that also limits greenhouse gas emissions.
On Wednesday the official opening of the dairy methane recovery project took place at the farm.
Dairy Green agricultural and engineering consultant John Scandrett said the new system, which was 13 years in the making, would generate electricity from waste, which would keep harmful greenhouse gases out of the atmosphere whilst being economical.
"It's all powered by poo," he said.
The dairy farm has been converting methane gas captured from the dairy effluent pond into electricity and hot water for the dairy shed since November 2016, Scandrett said.
Waste from the dairy shed, including manure, urine and wash water, goes into a sand trap then a pump sump, which is a storage tank, before it ends up in the biogas pond, he said.
Methane then naturally develops and collects under the black lining before it is pumped through a generator to make electricity and hot water, he said.
"It's working exceptionally well.
"There will be other farms interested," he said.
The farm had about 900 cows that would be utilised for milk, fertiliser and now power.
Dairy Green agricultural and engineering consultant Quinton Scandrett said the farm was producing "more than enough" gas to run the dairy shed and hot water.
The methane quality was "really good" at 80 per cent purity, which meant that it would burn efficiently and cause less emissions into the environment, he said.
Venture Southland business and strategic projects group manager Steve Canny said system marked a significant step towards a cleaner, more cost effective dairy industry for Southland as well as the rest of the country in the future.
"It's an example of things to come," Canny said.
In the next 12 to 18 months measurements on the pond would give "solid numbers" on the benefits of the new system, he said.
He expected the technology to be available to roll out across Southland farms next year.
Venture Southland chief executive Paul Casson said the new system was "a pilot for the region".
This project was worked on by Energy Efficiency and Conservation Authority (EECA),the National Institute of Water and Atmospheric Research (NIWA), Dairy Green agricultural engineers, Venture Southland and the Fortuna Group.
Fortuna Group Executive Director David Dodunski said Glenarlea Farm was the first in several initiatives to become for environmentally friendly.
"We've got to get smarter and smarter to lessen our environmental footprint."
The technology has also been trialled in dairy farms in the Waikato, Geraldine and Taranaki.