The associated harmful environmental, health and social effects with the use of traditional biomass and fossil fuel has enhanced the growing interest in the search for alternate cleaner source of energy globally. Ghana, a developing country depends heavy on woodfuel as a source of fuel contributing about 72% of the primary energy supply with crude oil and hydro making up the rest. Biogas generation has simply been seen as a by-product of anaerobic digestion of organic waste. Having proven to be a practicable and promising technology, it has been very successful and a very reliable and clean source of energy when proper management programmes are followed. There are vast biomass resources including organic waste in Ghana that have the potential for use as feedstock for biogas production to reduce the over reliance of woodfuel and fossil fuel, and to help reduce the it would reduce greenhouse gas emissions which may be affecting climate change. Ghana having the technical potential of constructing about 278,000 biogas plants, only a little over 100 biogas plants has so far been established. This paper presents the energy situation and the status of the biogas technology and utilization in Ghana. It also presents the potential benefits, prospects and challenges of the biogas technology.