Farm Power investing millions in Northwest dairy towns
By Lee van der Voo
Sustainable Business Oregon contributing writer
Farm Power is building energy-producing digesters in dairy towns at about $4 million each.
Maas said the duo envisioned a business model that would create revenue for their investors from energy sales, but also add value to farmers by assuming the risks of digester investments and providing long-term storage for manure, something that reduces the workload for farmers who would otherwise haul it to big tanks and lagoons in the winter and spread it again in the fall.
Digesters cost between $3 and $4 million to build, Maas said, depending on the size. The projects earn about $500,000 a year in power generation. About half of total earnings are spent sustaining operations — each digester requires at least a half time employee to run it. The digesters are built to run for 30 years. A typical financing model has the loans taken out to build the digester paid off after 10 years.
“We take tremendous risk, but the alternative is to do nothing. That’s why we go to areas that have several farms, because we may lose one, and hopefully over the life of the project at least one farm will be around,” said Maas.
“The digester is kind of new on the scene to help with manure management,” said Thad Roth of Energy Trust of Oregon. “Think of it as kind of a refinery. It has feedstocks that come in, and then there are products that come out.”
Aside from the labor reduction that benefit farmers, Roth said digesters offer bedding to dairies, reduce nutrients in manure in ways that benefit the water supply and also create compost. In a study in May 2011, Energy Trust and The Climate Trust concluded Oregon could have a biogas industry 12 times its current size if the state realized its potential in the sector. So far most development has been in the public sector. Eugene and Portland are both developing digesters to manage municipal solid waste.
Lee van der Voo, lvdvoo*at*gmail.com, is a freelance writer for Sustainable Business Oregon.
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