The zero-emissions unit will be fed manure from dairies located at Terara, Numbaa, Pyree and Brundee via an underground pipe.

The plant will then extract the methane gas to produce clean, green energy 24/7.

The electricity produced will be shared between a group of 18 dairy farmers, who have thrown their support behind the renewable energy hub, with the excess sold on to retail customers.

The pilot plant will be constructed and operated by Nowra based company, Innovating Energy, and will be the first to be developed on a number of sites secured by the company at dairies, pig farms, beef cattle feedlots and chicken farms in most states across Australia.

Innovating Energy's managing director, David Ryan said the company had been looking at developing farm waste to energy systems for the past 18 months.

"We signed with a large-scale piggery to develop a plant in Joadja in the Southern Highlands of NSW near Mittagong and simultaneously we were discussing the possibilities with the NSW government appointed dairy advocate Ian Zandstra, who has a dairy farm at Pyree." Mr Ryan said.

While there are limited stand-alone biogas plants in Australia, the concept has been embraced with gusto in other parts of the world, Germany alone is home to 9000 plants.

With dairy farms so reliant on electricity for things such as chilling the milk and managing the constant stream of manure produced while cows are being milked and fed, it quickly becomes a significant overhead for farm businesses.

It is intended that the plant will also be used to process food and green waste, providing an immediate benefit to the community.

Innovating Energy also intends to incorporate waste milk products in the digestion process.

"We plan to collect green and food waste in large quantities from food processors (not residential areas) and produce distributors, as well as having a constant source of supply of energy crops and liquified bio-solids from Western Sydney food and milk processing plant to supplement the methane production," Mr Ryan said.

Local fourth-generation dairy farming brothers Tim and Tom Cochrane, have been active supporters of the project.

They said the biogas plant would provide significant cost benefits and energy savings for dairying in the area and assist in dealing with manure clean-up.

Once the digestion process is complete and the methane gas is extracted from the manure, the leftover material can be spread across the dairy's pastures.

"We as farmers will benefit from the production of electricity from our cow's waste and the other advantage is our waste getting collected and utilised in a more useful manner than just spread back out on the paddock," Tom said.

Although the facility is not a first in Australia, the concept whereby a group of farmers combine to form an energy hub, is. Tim Cochrane has seen biogas plants operating successfully in the United States.

He approached Shoalhaven City Council about the idea early in 2020.

"I've seen these in the US on different farms, due to the scale of the farms in America, you might only need two farms with two fully housed cows to make a system viable, here, because our cattle are pasture grazed, we are only collecting 20 per cent of the manure at the dairies, we needed a much greater footprint to make one commercially viable." he said.

Shoalhaven Mayor Amanda Findley was excited the large-scale project was getting off the ground.

She met with dairy farmers, including Tim Cochrane, and other interested parties when the plant was in the conceptual stage.

"They saw the value in the product and how the capture and use of methane is one way of tackling climate change as well as using a valuable product," she said.

'It was exciting to hear that people were motivated to do that."

Ms Findley believes the project showcases innovation and it will be something that can be picked up and taken to other areas that have a heavy concentration of dairy farms such as the Shoalhaven.

A suitable site for the biogas plant is yet to be determined, but a central location to all 18 dairies is thought to be the most likely outcome.

Once the necessary approvals have been finalised the plant will be built over a 12-14 month period, with completion expected in late 2021.

The project is being developed with the help of grant assistance under the federal coalition government's Microgrid Energy Initiative.