By John Hanselman, Chairman and Chief Executive Officer, Vanguard Renewables
Special to The Digest
Renewable natural gas production is a good news story, but how to get there successfully is more complicated than most of us in the business anticipated. At Vanguard Renewables, we entered the renewable energy landscape with two different “eat what you kill” on-farm anaerobic digesters that combined varying levels of manure and food waste to less than consistently produce biogas and ultimately generate electricity. We thought we were a renewable energy company that happened to recycle food waste. What we have learned since then is that we are actually an organics recycling company that happens to produce renewable energy.
Reducing variability is key
That first iteration of our business was fraught with way too much variability in feedstock strength and quantity. Vanguard was also seen by the feedstock haulers as lacking reliability as a food waste destination because of our variable performance. Because of the small footprint of those initial anaerobic digesters and the associated lack of reliability, the haulers were unwilling to build a collection/recycling program around the farms to meet their customer needs and they continued to look for other destinations for organic waste.
After a couple of years in, we had the “we are an organics recycling company” aha moment. When we did, what we realized was that a larger capacity AD footprint, that was more stable in terms of volume and technology, was critical to a successful co-digestion AD to renewable energy program. And, using one standardized technology that could accept the same type and volumes of food waste across the platform was key to being a reliable organics destination 24/7/365. In this new scenario, food waste could be managed across a portfolio of facilities and the independent variation of any one digester would not imperil our relationships with the hauling community.
Understanding the haulers
Another critical component of moving toward success was to understand the needs of the waste haulers. What’s important to haulers first and foremost is reliability. They need to know that they will have a destination for the food waste they collect every day and that they will not be turned away by system capacity or maintenance issues. This is the only way they can deliver on their contracts with the food waste generators and make money. If they need to shop around for a destination at the last minute because a recycler does not have multiple facilities to redirect waste between when there is an issue, it cuts deeply into the haulers slim bottom line margin.
And, speaking of margins, haulers need to make money with slim margins. Food waste producers want to spend as little money as possible on collection and tipping fees to have that waste taken away. For everyone, time and hauling distance makes or breaks the profit margin. By having greater capacity in each digester and redundancy in the processing capacity of our AD facilities throughout the hauler’s target area, we deliver on the promise of reliable and profitable organics collection and recycling.
Addressing special customer needs
We also began to run our own vehicles to handle customers with “special waste” needs that the haulers were unable to accommodate. This was an opportunity for Vanguard to build our own side of the business by adding liquid waste hauling capacity for food manufacturing byproducts and other liquid organic waste streams. In some cases, the addition of this offering also enables us to incorporate totes in to our program and contract with smaller solid food waste generators that the haulers simply can’t afford to service.
In the end, any company trying to do large-scale food waste recovery must have capacity to handle all organics streams, not just clean liquids with a few solids. Generators simply want you to show up and take it. In the beginning, we generally got clean waste streams, but the larger addressable food waste market includes a variety of contaminants. Realistically, as an industry, we cannot put that separation burden on the generators. We should charge differential pricing for different “quality” food waste, but to be successful, we need to be able to take all types of loads with organics.
Brand recognition and value
The other thing we realized was as our Farm Powered® brand became more recognizable and symbolized good environmental stewardship by the partner farms, the food waste generators, and the haulers who contributed to its success. This became a valuable asset to all involved as a customer sales and loyalty proposition and a selling point for building a program with us.
Vanguard Renewables today
Today we have capacity for 500 tons per day of organic waste and will take nearly 1000 tons per day by 2020. Our multiple co-digestion facilities, all now 1MW or larger, offer large, reliable capacity that makes us a dependable resource for haulers because they know if they show up, we can take their waste every single day.
A by-product of the AD plant process is separated solids, which the dairy farms that host our facilities use for bedding. In at least one case, a farmer who switched from using wood chips for bedding to digested solids, and saw a significant reduction in the herd’s somatic cell count (which yields a higher price for the milk). The effluent is also land applied on the farms’ acreage and this makes neighbors happy because it is virtually odorless. Garnering this community support has been another key link in our chain to success.
We started the business to make renewable electricity from RNG in the tariff rich environment of Massachusetts, but we see our greatest opportunity in promoting RNG to pipeline and vehicle fuel as part of the massive explosion in interest in Renewable Natural Gas production that began with the California Low Carbon Fuel Standard (LCSF). We’ve also recognized that the appeal of achieving carbon neutral status to institutions and businesses is strong and that Federal RIN credits are a key piece in the puzzle to getting there. Hopefully, understanding the component pieces of the intricate puzzle of food waste recycling leads to success in the creation of renewable natural gas business.
About the Author
John Hanselman, Chairman and Chief Executive Officer, Vanguard Renewables
Vanguard Renewables’ Farm Powered Anaerobic Digesters produce renewable energy from recycled food waste and farm waste. Vanguard was named 2018 Organics Recycler of the Year by the National Waste and Recycling Association. Hanselman has thirty years of experience in environmental innovation including as a Managing Principal and founder of Brightfields, a solar brownfields solutions company, and as a Managing Principal of Renova Partners, a national brownfield investment and development company.