WINNER - 2026 Outstanding Industrial Bioenergy Project
Congratulations to Optimal Group Australia and Saputo Dairy Australia for winning the award for Outstanding Bioenergy Project in our 2026 Australasian Renewable Heat Awards.
The Awards recognise the innovative work out there which is leading the transition to renewable heat and setting the benchmarks for projects that follow.
Learn more about this winning project below.
Saputo Allansford Biogas Project
Industry sector: Dairy processing, food & beverage
Location: Saputo Dairy Australia, Allansford, Victoria, Australia
Completed: February 2026
Project partners:
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Saputo Dairy Australia (project owner)
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Optimal Group Australia (solution provider
Project summary
In February 2026, Optimal Group Australia commissioned a 1.7MW biogas combined heat and power (CHP) plant for Saputo Dairy Australia at its manufacturing plant in Allansford, Victoria.
The site's covered lagoon, installed in 1993, produces up to 3 MW of biogas from dairy processing wastewater. Due to operational challenges with the existing biogas boiler, this gas was being flared and that energy was going to waste. The digester was being heated from a natural gas boiler instead.
Saputo had two Capstone C1000R microturbines in long-term storage at its Cobram site. Optimal reconfigured these from stand-alone low-pressure natural gas to high-pressure biogas and redeployed them to Allansford in grid-connected mode. The scope for the balance of plant for this project included biogas compression and chilling, siloxane removal, heat recovery modules and associated hot water circuit, on-line gas analysis, extensive brownfield civil works, HV and LV electrical reconfiguration, installation and testing, controls and commissioning.
Recovered exhaust heat from the turbines now goes back into the existing digester heating circuit, displacing the natural gas boiler and helping maintain digester temperature, for better biogas yield.
The plant now supplies renewable heat and electricity from a waste stream previously flared.
The heating challenge addressed by the project
Allansford is a dairy manufacturing plant processing significant volumes of milk into dairy products. Its covered anaerobic lagoon (CAL) has been part of Saputo's on-site wastewater treatment process since 1993. Maintaining a healthy CAL and maximising biogas yield, while achieving the required effluent quality, relies on providing thermal input to maintain digester
temperature.
Previously, CAL heating was supplied by a 2 MW hot water boiler burning approximately 78,840 GJ of natural gas each year, despite the digester producing up to 3 MW of biogas that could potentially provide the same thermal energy. The boiler was originally designed to burn that biogas; however, the gas contains approximately 900 ppm sulphur and other impurities introduced upstream. The resulting corrosion and fouling damaged the boiler and affected its reliability, leading the site to revert to natural gas and redirect the biogas to the flare.
As a result, a significant volume of biogas was being flared rather than used as an energy source. The challenge was to find a technology capable of reliably operating on biogas for the CAL while recovering heat at the temperature and flow required by the digester heating circuit: approximately 100 m³/h at 85-95°C.
The solution also needed to be delivered at a continuously operating manufacturing site with wastewater compliance obligations, limiting opportunities to interrupt existing services and requiring careful integration with plant operations.
The technologies featured in this project
The project centres on two Capstone C1000R microturbine packages, each comprising five independent 200 kW bays, providing up to 2 MWe combined at ISO conditions. They were natural gas machines in long-term storage at Saputo's Cobram facility. Optimal reworked them from low-pressure natural gas to high-pressure biogas duty.
Heat recovery comes from two Alfa Laval Micro 814 shell-and-helical-tube heat exchangers, one per turbine package, installed downstream of each exhaust manifold. Each one has a clean duty of 1,136 kW, which heats roughly 100 m3/h of hot water from 85 to 95 degrees C. Each unit has a regulation damper that either sends exhaust across the coils or bypasses it through the core, so the heat recovered can be varied.
The hot water is pumped through Saputo's existing hot water tank, from which a separate set of pumps sends this through the digester heating circuit.
Fuel conditioning is handled by two Adicomp BVG75 biogas compressors with matched chillers, which deliver gas at turbine inlet pressure across the full ambient range and allow pipeline gas blending if biogas quality or quantity
falls short. An activated carbon polishing stage removes the siloxanes. We also supplied switchboards, HV and LV reconfiguration, an instrument air header, gas analysis and a master controller that sequences the turbine bays against available biogas.
The 2 MW natural gas boiler is now displaced as the main heat source whenever the turbines run. Routine flaring has been minimised, though the flare is kept for safety and excess gas.
Results and benefits of the project
The modelled annual outcomes reported to Sustainability Victoria at project close-out were 78,840 GJ of natural gas avoided, 7,529 MWh of imported black grid electricity offset, and a greenhouse gas reduction of 8,934 tonnes CO2-e per year.
Operational performance has exceeded expectations. The plant has consistently operated above its 20 MWh per day generation target, typically producing 25 to 28 MWh per day, and is expected to run well above 1 MW continuously for extended seasonal periods. Heat recovery has been sufficient to maintain the covered anaerobic lagoon temperature without requiring the top-up boiler, further reducing energy consumption.
The project captures value from an existing organic waste stream that was already available on site and had previously been destroyed through flaring. Improved and more consistent digester heating is also expected to support increased biogas production and enhanced digestate quality over time, although the plant has not yet operated long enough to quantify these
benefits.
By generating electricity behind the meter, the project reduces reliance on imported electricity and helps free regional network capacity for other electrification projects in the area. The microturbines operate at less than 9 ppm NOx, lower than the flare they replaced, and are quieter than conventional stationary engines, improving conditions for nearby operators. In addition, reusing the Cobram turbines avoided the need to manufacture new generation equipment, further reducing the project's overall environmental impact. These outcomes contribute to Saputo Inc.'s commitment to reduce absolute
Scope 1 and 2 emissions by 42.6% by FY2030 from an FY2020 baseline.
Special innovations included in the project:
Microturbines running on biogas are not new internationally, but they are still uncommon in Australian industrial applications, where boilers and reciprocating engines are the usual choice. Given the operational challenges associated with biogas quality with boilers and reciprocating engines, and the desire to maximise biogas utilisation at Allansford, Saputo saw an opportunity to trial an alternative technology.
Microturbines were selected because they tolerate sulphur up toapproximately 5,000 ppm, which is well above the 900 ppm at this site. Thatmeant the gas did not need full upstream treatment. Only the siloxanes were removed, using an activated carbon polishing stage, since those were the contaminants that would have damaged the turbine blades.
The two C1000R packages were eleven years old and sitting idle at Cobram. Reworking them for biogas and moving them 400 km avoided manufacturing new plant and improved the project economics.
Heat recovery runs back into the digester that produces the fuel, so better heating supports gas yield, which supports generation.
The modularity of the system suits fuel supply that varies in volume and quality. Ten independent 170 kW bays stage up and down with available biogas; the turbines handle wide Wobbe Index and calorific value swings, and servicing one bay does not take the plant offline.
The plant needed tuning after commissioning. Turbines were tripping on upstream biogas pressure dips, so we changed from block power dispatch to analogue dispatch logic to manage transient gas feed. Output improved once that was in place. Saputo Inc. is now evaluating the same technology on biogas at its Waupun plant in Wisconsin.
State or federal funding which supported the project
The project received a $1 million grant from Sustainability Victoria under theWaste to Energy Bioenergy Fund. It was one of 24 projects funded under that program, which sits within the Victorian Government's circular economy policy, Recycling Victoria: a new economy. Saputo sought the grant to cover relocating the two Capstone microturbinesfrom Cobram to Allansford and reconfiguring them to run on biogas in grid-connected mode, along with the heat recovery system that lets turbineexhaust heat replace the reactor heating the 2 MW natural gas boiler used toprovide. The grant process ran from September 2022 to April 2023, and the capital investment decision was made in May 2023.The grant played an important role in getting the project approved. The funding materially enhanced the business case, which allowed Saputo toproceed with the capital expenditure investment.