Fonterra's Edendale site in Southland is next in line to have one of its coal boilers switched out for a renewable energy alternative.

The dairy giant will replace the coal boiler with a new electrode one, which uses electricity to create steam.

The move is the latest step in the farmer-owned cooperative's plans to get rid of coal by 2037.

The forecast $36 million investment will reduce the Edendale site's emissions by around 20 percent, or 47,500 tonnes of CO2e per annum, when it is up and running by the middle of 2025.

Fonterra acting chief operating officer Anna Palairet said that with up to 15 million litres of milk being processed at the site each day, the cooperative needed to ensure that it had a secure energy supply that could meet processing demands.

"Cost is also an important consideration. Getting out of coal requires significant investment and we need to choose the best option that reduces emissions and operational complexity while also doing what's best for our farmer shareholders."

Fonterra is partnering for the electricity supply with Meridian Energy, which generates electricity from 100 percent renewable resources.

Reproduced with permission