A potential farmer’s cooperative is, with the support of Victorian and local government, preparing a feasibility study for the harvesting of straw (stubble left after grain harvesting) and supplying as a thermal energy source to the Skipton Hospital and manufacturers currently using gas. Indications are the straw could be delivered for $6 to $10 per Gigajoule (GJ) compared with the cost of natural gas at $12 to $16 per GJ. The farmers cooperative (known as the Straw Alliance) is hoping that broad acre harvesting equipment that can harvest the stubble and process it into pellets will make the production, storage and transport of straw more appealing. In the interim CPH Ballarat is working on a parallel feasibility study using straw bales and mechanised handling and shredding systems as a potential system for large Ballarat gas consumers. The community benefits are potentially removal of the need to burn stubble with the health and fire risk associated issues and the development of an additional income stream for cereal crop farmers.