The company will finance, build and operate the facility that is designed for handling unsorted household waste without prior treatment using enzymes.
Located in Northwich near Manchester, the facility will use the firm’s REnescience enzyme technology to produce biogas.
According to the company, the REnescience technology has been testing at a demonstration plant in Copenhagen since 2009.
Dong Energy executive vice president Thomas Dalsgaard said: "The decision to build the first plant is a very important step in our roll-out of the REnescience biotechnology.
"This is an entirely new way of treating household waste where we very effectively can ensure that we get as many resources as possible from our waste."
The new facility will hold the capacity to process around 120,000 tonnes of waste, which will be collected from around 110,000 households in the region.
UK-based waste management company FCC Environment will collect and supply the waste for the facility.
FCC Environment group development director Richard Belfield said: "This is an exciting new technology for the disposal of municipal residual waste which is potentially set to revolutionise our thinking as an industry of what can be achieved."
The company plans to begin the construction on the facility by the end of this month, and is expected to commence operations in early 2017.
Image: The new bio plant in Northwich. Photo: courtesy of DONG Energy A/S.
