By CYRUS LEVESQUE
MIDDLEBURY — The Foster Brothers Farm in Middlebury has used anaerobic digester technology to turn cow manure into electricity for more than two decades. Now the owners of the farm are helping to create a new company that will act as a broker selling electricity produced on farms around the country to businesses seeking to buy power produced from renewable resources.
“If someone wants to be ‘green,’ this is a good way to be green,” said Robert Foster of Foster Bros. “I encouraged our group to jump on it, because it’s something I wanted to champion.”
The new company, called AgRefresh and based in Burlington, began when Jeff Frost approached Foster about three years ago with questions about anaerobic digestion systems, like the manure digester Foster Bros. uses. Seeing a potential business opportunity, they took the first steps toward starting a company that would make “green” energy more widespread.
Frost, who is president of AgRefresh, said that as more people think about the environmental impacts of their actions, the demand is increasing for energy generated from the agriculture industry. “There is an emerging set of markets … that you can sell this benefit into,” he said. “These markets are in an incredible state of change.”
The company has been lining up farms who want to use livestock wastes to produce energy for the commercial market. Once a reliable supply of power is in place, AgRefresh will buy electricity generated by anaerobic digesters on these farms and sell that power to buyers in the form of Pure Farm Energy (PFE) shares.
The target date for the first sale of PFEs is Jan. 1.
And as use of energy from renewable sources increases, use of energy from other sources should decline, Frost hopes. “When you create renewable energy, the consequence is that there’s less energy put onto the grid from sources like coal power plants,” he explained.
DIFFERENT FROM COW POWER
Many similar efforts have tried to capture the importance of how energy is produced. Central Vermont Public Service, for example, started its Cow Power program in 2004. CVPS customers who want to buy energy from renewable sources can sign up for Cow Power, which charges a premium for their electricity. CVPS, in turn, pays member farms for energy produced from renewable sources.
However, there are differences between the CVPS program and AgRefresh. While CVPS’s program sells electricity only to customers within its network, AgRefresh plans to work with farms across the country — Foster said they had been negotiating with farms in Washington state and Wisconsin — and will be able to sell PFEs to buyers anywhere as well.
“I’m very supportive of what CVPS is doing, and we’re trying to take it the next step further,” Foster said. He added that they do not plan to compete with CVPS’s Cow Power.
In addition to providing consumers with a renewable power option, Foster sees AgRefresh as providing a way to help farmers directly by giving them money for manure that otherwise might simply have to be disposed of. “They are good stewards (of the land), so let’s reward them,” he said. “We want to make sure as much of that (money) gets to the farmer as we can.”
In some ways, PFEs are similar to tradable renewable certificates, a system that has been used for years in this country to promote renewable energy by selling the side effects of producing electricity by “green” methods. Frost would not say how much PFEs will sell for, because he said that price can be misleading by comparison with tradable renewable certificates.
“We don’t try to sell individual shares, we make plans with companies to offset their specific (energy consumption) activities,” he said. “It doesn’t compare to anything.”
Frost argued that such certificates are often worth less than a buyer might think. They can be applied to energy suppliers that have been using renewable sources for years, so buying them might have no effect on the environment, but since AgRefresh’s farms are all new to such systems, he said anyone who buys a PFE is guaranteed that it’s making a difference.
“We can’t compete (on price alone). We can compete for anybody who wants to ensure they’re having an environmental impact,” he said.
John Todd, professor of ecological design at the University of Vermont, thought that guarantee was an important detail in what AgRefresh was trying to do. “(People) are concerned that their money is actually going to renewable energy,” Todd said. “My sense is what AgRefresh will try to do is make that process transparent.”
Foster’s farm, for example, has had a digester for more than 20 years, but it is not among the farms with which AgRefresh is partnering. To ensure that customers’ money actually results in more energy being generated from renewable sources, they are relying on farmers who are using new renewable energy systems. “Our policy is to only focus on new farms because that’s new renewable energy,” Frost said. However, he said that they would not pay to help the farms set up the generation systems, which in some cases would cost hundreds of thousands of dollars.
AgRefresh is still in the early stages of getting started. They have had several consultants and temporary workers to get started, but at the moment, Frost himself is the only employee.
The next step is finding buyers. They don’t have any yet; there are only a handful of farms involved on the producing side of things to supply the power in the first place, so to Frost, getting the supply was the first priority. “We have no product to sell until January 1, so we have not been looking for buyers,” he said.
But Frost and Foster are both confident that there is wide interest in using energy produced from green sources. “This is a nationwide movement, where people decide to green their own footprint,” Frost said.
UVM’s Todd had not studied the market for AgRefresh itself, but he said there was demand for what they were doing.
“I think a fair number of people are willing to pay a premium for renewable energy,” he said.
Foster was almost surprised at how many people have already expressed an interest in PFEs. “We’ve got interest across the country, and we’ve only been reaching out for six to eight months.”
He said that it was a new market for businesses like this, and is still changing rapidly. “There’s all kinds of opportunities out there,” Foster said. “The whole thing’s really exciting, and Vermont can be a part of that.”