The £10m GWE Biogas Anaerobic Digestion power station was opened earlier today in Driffield by Environment Minister Lord Henley.
The plant will use around 50,000 tonnes of food waste every year to generate 2.1 megawatts of electricity - enough to power more than 3,200 homes.
It represents the latest step in the East Yorkshire and Humber area becoming a major hub for renewable energy production.
GWE Biogas was formed in 2008 by farmers Tom Megginson and Mathew Girking. The project has been funded with the help of the Waste and Resources Action Programme and C02Sense.
Jemma Benson, project manager for CO2Sense, said "Renewable energy is a large and growing opportunity for businesses, and we're delighted to have helped this farm business to diversify into clean energy production."