First Milk announced yesterday that Clearfleau - commissioned by the British dairy to design, build and operate the bio-energy plant - has completed the the first phase of construction of an anaerobic digestion plant at its Lake District Creamery in the Northern England.
The plant, which First Milk expects to be operational by early 2016, will convert whey permeate - a by-product of cheese production - into bio-methane.
Once fully operational, the facility will generate 1000m3 of bio-methane per day.
First Milk will use some of the produced bio-methane at its Lake District Creamery for steam generation - reducing its purchase of fossil fuels.
The rest will be fed into the gas grid network, it said.
Lake District Creamery will become the first dairy processing site to do so, according to Clearfleau.
"The new facility is an example of how we are continuing to progress our turnaround plan, by saving costs and improving the operational efficiency of every corner of the business," said Chris Gooderham, business development director, First Milk.
"By utilising the very best technology, First Milk will reduce the cost of handling the creamery's production residues, while generating renewable energy for use on site," Gooderham added.
Craig Chapman, CEO, Clearfleau, added: "It is a very positive move by First Milk to future proof their award winning creamery operations by generating a significant proportion of the site's future energy needs."