It will help the company produce more sludge – a by-product of wastewater treatment and the anaerobic digestion process produces biogas, which is used to fuel a combined heat and power (CHP) engine that heats water for the process and generates electricity.
The electricity will be used to power the site and any surplus will be transferred to the grid.
The water company is also exploring alternative uses of the biogas, like injecting it to the gas grid to provide renewable energy to homes and businesses.
Senior Project Manager Mike Smith said: “We are delighted to announce this investment which will make a huge improvement to the performance of the site.
“The investment shows our commitment to invest in renewable energy and benefit the environment as we look at ways of becoming more efficiency and self-sufficient and help keep customers’ bills low.”