Severn Trent Green Power, which runs the Cassington AD (anaerobic digestion) facility near Yarnton, just north of the city of Oxford, said the strike "caused an explosion in our biogas tanks".
"Thankfully no one has been hurt and we are working with the emergency services to make sure the site is safe so that we can assess the damage as soon as possible," the company said.
The Cassington AD plant handles commercial food waste, processing more than 50,000 tonnes of solid and liquid waste each year.
It generates 2.1 megawatts of electricity as well as bio-fertiliser, according to the company, which has a contract with the local authority.
Thames Valley Police said the nearby A40 main road had been closed as a precaution, and local residents had been advised to stay indoors and shut windows and doors.
BBC local radio said some residents in the locality had reported power outages.
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