A family-owned piggery in northern Victoria is about to unplug from the grid and rely on a $1 million biogas system for all its power.

The biogas system is expected to save the business operators at Yarrawalla, 80 kilometres north of Bendigo, hundreds of thousands of dollars.

While other intensive animal farms and regional hospitals across the state face rising energy prices, the Kia Ora piggery will become self-sufficient in two months time.

One interstate research fellow who advises Australian Pork Limited has described the operator as a trail-blazer in the industry.

The Kia Ora business has 40 employees with 24,000 pigs, including 2,000 sows.

The power costs of the business have increased by close to 200 per cent in two years.

Power bills surging

The owner Tom Smith said the change in energy meant he was no longer pay power bills of $350,000 a year.

The process will involve treating and recycling pig effluent with a 250-kilowatt biogas system which makes electricity.

Mr Smith said he was confident of his return on investment on the environmentally sustainable system.

"If you are a normal business, it is a 25-30 per cent minimum they want to get a return on their capital," he said.

"Well, in farming, usually it's around 5 or 6 per cent," he said.

"Something like 20 per cent, is pretty attractive for us," Mr Smith said.

A similar ambitious plan was being set up at another farm west of Shepparton last year.

Cutting energy costs of farming

The methane recovery set-up at Kia Ora will be similar to other modern farm effluent systems, except for an additional covered pond, where methane is produced and captured.

The methane is sucked from the pond to a generator shed, where it is used to power a biogas generator, which in turn, creates electricity.

Mr Smith said he would be able to generate enough to not need mains power, which is traditionally a huge cost burden for piggeries.

He had also been earning income via carbon credits through the Federal Government's Carbon Farming Initiative, minimising his environmental footprint.

Mr Smith said the system, which would reduce energy costs comes at a pivotal time.

"We should have had it done years ago purely because of the cost of our electricity," Mr Smith said.

"If you can take out a cost of production, the sooner you can do that sort of thing, the better," he said.

A proactive trend in the pork industry

The University of Queensland's Stephan Tait who has worked with piggery operators across the country, said it was important for technology providers and specialists like himself f at universities to be able to work together with farmers on the ground.

"It's a real sweet spot industry," he said.

He said piggeries were well placed to benefit from biogas technology and could reduce their green house gas emissions.

"Pigs like to poo and their manure is actually very rich in nutrients," Dr Tait said.

"Those nutrients can be converted in the fuel gas called biogas," he said.

"But biogas can be unsafe if you don't handle it properly like electricity," Dr Tait said.

Dr Tait said operators and the sector were still learning how to implement the technology on farms but it could be rolled out across the whole industry.

"The exciting thing is that now smaller piggeries in Victoria are doing the same," he said.

"It may sound like a lot of money to invest a $1 million, but some sites around Australia have been able to pay off their infrastructure equivalent amounts within three, three and a half years and now essentially don't have a power bill at all," Dr Tait said.

He said Kia Ora was showing others what could be achieved.

"It is an amazing thing and a very positive outcome for this, for this particular livestock sector," Dr Tait said.