The association is to be launched at the Africa Energy Indaba in Sandton next week.
Mr Tiepelt said it was possible 2,500MW could be generated through biogas, and he estimated there was potential to develop a R10bn domestic industry. The state’s Independent Power Producer programme is meant to produce 3,725MW of power from wind, concentrated solar energy, small hydro-gas, biogas, biomass and landfill gas by 2016.
"Setting up involves quite substantial capital expenditure, but around mid-year last year Eskom’s rebate system began to include biogas.
"That increases financial viability. Then the Department of Trade and Industry issued a grant scheme, geared towards (the) manufacturing (sector). Now it becomes an absolute no-brainer," Mr Tiepelt said on Thursday.
The process of turning waste into gas involves the breakdown of organic waste in an oxygen-free environment, with, on average, 60% of the gas created being methane, the combustion of which produces the energy.
There is very little biogas-based power generation in South Africa, with only about 10 of the 200 biodigesters (in which the biogas is generated through decomposition) commercial-sized, he said.
Challenges to the use of biogas range from how much feedstock is available in South Africa, where waste is not generally separated at source, to the Municipal Finance Management Act (MFMA) not allowing municipalities to sign contracts of more than three years with private enterprise, said World Wide Fund for Nature South Africa Living Planet Unit chief Saliem Fakir.
While most biogas power generation in South Africa has been small scale, Mr Tiepelt said the biggest potential for the industry lay in the industrial and agricultural sectors. It was here that it was likely enough power could be generated for it to be sold on to companies or municipalities.
"But it’s early days and there’s lots of red tape. For one, we need legislation to allow municipalities to sign 15-year contracts (with biogas producers).
"You are talking about a R50m to R60m investment in a plant, if you sell only a three-year contract you won’t get a return on your investment," he said.
Trade and Industrial Policy Strategies sustainable programme manager Peet du Plooy said there was precedent for "working around the MFMA legally. (It is) to be found in the 20-year contracts the other renewable energy providers have signed with municipalities".
Mr Fakir said "the big thing" with biogas was to get a regular supply of generated gases, and there was "great" potential in municipal waste.
But separation at source is still in its infancy in South Africa, especially in households. There are pilot programmes in some urban centres.
Mr du Plooy said: "Overall, (biogas) can’t be the basis of our future energy supply, but it is tantalisingly job intensive."