Up to 10,800 homes could be powered by renewable energy generated from methane after the expansion of the landfill gas capture project at Mugga Lane.
The move is also expected to cut down further greenhouse gas emissions produced by Canberra's main tip.
On Monday, the ACT government announced plans to add two extra gas to energy generators, as well as a further 12 megawatt of battery storage and a 20 megawatt grid connection with electricity distributor Evoenergy to the existing operations at the Mugga Lane site.
Four generators producing around 37,000-megawatt hours of electricity annually, enough to power some 5700 homes, have already been operating at the landfill for about three years.
Transport and City Services Minister Chris Steel said the expanded project would be able to generate 50,000 megawatt hours of "dispatchable energy" - enough to power 10,800 homes annually.
"The addition of this new battery system will provide storage capacity and rapid dispatch of the renewable energy generated by the engines at times when the grid requires it most," he said.
"Further upgrades to the Mugga Lane site will allow us to go even further with our emission reductions building on the more than 80 million3 of biogas captured at Mugga Lane which has allowed for 96 Gigawatt hours of renewable energy to be generated."
Methane is a greenhouse gas that can be generated from decaying organic waste. Landfill gas capture and processing technology can trap the gas and convert it into energy.
In addition to generating renewable energy, the project at Mugga Lane has facilitated the reduction of 764,000 tonnes of emissions over a three-year period.
Renewable energy and carbon abatement company LGI Limited is contracted by the ACT government to run the facilities and is expected to start work on the expansion in the coming weeks.
LGI founder and managing director Adam Bloomer said emissions from landfills "without biogas management systems can be a significant problem and can contribute up to 80 per cent of a local government's carbon footprint".
"The ACT government's carbon cutting approach of using proven, cost-effective technologies to capture and abate the harmful methane emissions from Mugga Lane and generate reliable, dispatchable 24/7 renewable energy is an example of what progressive governments can achieve by prioritising the environment," he said.
Two additional full-time roles will be brought in for the project and local contractors will be engaged for a variety of jobs, including concreting and catering.
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