09/02/2014 02:57 EDT | Updated 11/02/2014 05:59 EST

Biogas pilot project gets the green light in Newfoundland and Labrador

ST. JOHN'S, N.L. - The Newfoundland and Labrador government has handed a $50,000 contract to a consulting firm to help develop a biogas electricity generation pilot project.

Natural Resources Minister Derrick Dalley says the project is aimed at diversifying the province's electricity sources.

Biogas is a renewable energy source that generates electricity from raw materials, such as landfill and agricultural waste.

Methane, a greenhouse gas, is the main component of biogas.

Dalley says burning biogas as an electricity fuel source will reduce the province's greenhouse gas output and create economic value from a waste product.

Navigant Consulting Ltd. has been selected to research industry practices and provide guidance on developing a so-called net metering policy.