Few people get as excited about wastewater as Thomas Fudge. He has good reason: he and his colleagues believe they have figured out how to turn sludge into gold.

Wastewater from places like breweries and food processing plants can’t be dumped down the drain; it has to be specially treated, a costly endeavor that often happens offsite. Fudge’s company, Wase, is offering them an alternative: treat the water on site, and get some free energy to boot.

Harvesting methane from organic waste and using it to produce electricity or heat is nothing new. Companies do this not only to wring some value out of the sludge, but also to reduce their carbon footprint since it can be a source of greenhouse gases when left to decompose on its own. Sending it through an anaerobic digester and burning the resulting methane can cut a company’s carbon footprint.

What Wase is building isn’t a typical anaerobic digester, though. The UK-based startup says its system is significantly smaller and can squeeze about 30% more methane from the sludge. The organic waste that can’t be digested is 30% to 50% smaller in volume.

The company’s secret is electro-active microbes.

“They’re absolutely everywhere,” Fudge, Wase’s founder and CEO, told TechCrunch. “They’re in the soil in the ground, they’re in wastewater sludge, they’re in anaerobic digestion systems, but they don’t have the environment where they can really thrive.”

Basically, Wase built a contraption to make these bacteria happy.

Inside one of Wase’s systems, stacks of electrically charged fins called electrodes provide a home for the electro-active bacteria to grow. On one electrode, some species cleave hydrogen ions off the sludge. On another, methane-producing bacteria take that hydrogen and use excess electrons to attach it to a carbon atom stripped from carbon dioxide. The system needs to provide a small amount of electricity to keep things flowing in the right direction. “It’s more or less like a traffic light,” Fudge said. The end result is biogas.

Once the gas is generated, it is drawn off and can be burned to produce heat and electricity.

Because Wase uses microbes that are broadly distributed, and because it’s supplying them with the electrons they need, the bacteria are happier under a wider range of conditions, Fudge said. Compared with the anaerobic digesters normally used to do the job, Wase’s system can work at lower temperatures and a wider range of acidic (or basic) conditions, Fudge said.

“They grow much faster so they can rapidly break down organic compounds much more effectively.”

The colonies that form on the electrodes constantly rejuvenate. As old bacteria die, they become food for the living. Each colony contains a diversity of species and strains, and they evolve over time as they grow accustomed to the particular sludge they’re processing.

Wase is developing a control system that will maintain wastewater flow through the system to keep the bacteria at their best. Because the bacteria draw electrons from the electrodes, the control system can monitor the current to determine how happy they are.

“You can get real-time optimization,” Fudge said, which can be used to determine maintenance schedules, automate feeding and monitor overall system performance. “It gives operators a way to communicate with the biology and the bacteria,” he said.

The startup recently closed an £8.5 million ($10.74 million) seed round, TechCrunch has exclusively learned. The round was led by Exantia Capital with participation from Elbow Beach Capital, Empirical Ventures, Engie New Ventures, Hitachi Ventures and WEPA Ventures.

Wase will be installing a pilot system on a dairy farm in Wales this spring. The company is also working with two breweries.

Wase’s approach may reduce the overall carbon footprint of the wastewater treatment process, though the company has yet to perform a full accounting. For now, the methane its system produces will be burned on site, which is a smart move because it limits the distance the gas has to travel. Providing it to the natural gas grid would make the climate benefit a little murkier, as methane leaks along the way have become a significant source of greenhouse gases, research shows.

Still, it’s likely the methane will be transported in some way or another. The EU has set a target of 35 billion cubic meters of biogas by 2030, which means that however it’s used, this young startup will have plenty to chew on.