Scientists at the University of Queensland have hooked up with Foster's brewery to build a fuel cell powered by brewery waste.

The power source mixes by-products of the brewing process with special bacteria that feed on the leftover starch, alcohol and sugar. The device produces power, clean water and carbon dioxide.

"Energy and water supply are among the biggest challenges we will face in the coming decades," said Dr Korneel Rabaey from Queensland University.

"Therefore, we must learn how to diversify our portfolio of fuels, and we must learn to reduce our energy and water usage."

The 10-litre prototype battery has been operating successfully for three months and a much larger unit is planned at brewer's plant in Brisbane later in the year. This 660-gallon battery will be capable of producing 2kW of energy.

The team has won a $140,000 grant from the Queensland government's Sustainable Energy Innovation Fund and is backed by a $1.3m Australian Research Council Discovery grant in addition to onsite and financial support from Foster's.

"Technology that can do this should be supported, so the decision by the Queensland government is a very important signal to universities and the industry," said Professor Jurg Keller of Queensland University.