Renewable natural gas is ready for disruptive growth

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Imagine if you want a renewable energy source without time of day or weather constraints. A renewable energy source whose surface of potential is just being scratched. Perhaps most important in today’s political environment, a renewable energy source that does not rely on supply chains dominated by antagonistic nations as a source of raw material, but rather on family farms American.

This is the industry in which Vanguard Renewables and its new CEO, Joel Gay, are engaged. It is a company focused on converting manure and food waste into renewable natural gas (RNG). What remains after RNG production is then turned into organic fertilizer, returning nutrients from the manure and food waste produced to the soil to be recycled again and diverting tons of waste that would otherwise have gone to landfills or incinerators.

RNG is the primary source of carbon-negative energy since it is produced from organic matter that would otherwise be released as a potent greenhouse gas. As a result, Vanguard is helping companies like Starbucks and Unilever meet their “zero cleaning by 2050” commitments that have become a fad among large energy and consumer goods companies.

The good news for everyone is that this industry is evolving in a major way. Vanguard, which was founded in 2014 by two entrepreneurs, already has developing farms in 17 of the 50 U.S. states and is embarking on a major expansion plan. To manage this expansion, the company has just announced the hiring of a new CEO, Joel Gay.

“Vanguard has been a real disruptor in the cleantech and renewable energy markets with its creation of the world’s most scalable RNG platform – a differentiated business model incorporating vertical integration that envisions the most valuable components of the world. renewable energy and waste management. value chains, ”Gay said in a company statement. “This revolutionary model has forged a truly circular economy that avoids waste and pollution, captures clean energy for beneficial use and creates value for all stakeholders. In summary, this amounts to an incredibly unique and timely opportunity that I want to develop and monetize further. Vanguard founders John Hanselman and Kevin Chase have positioned the company well for its next phase of growth and value creation.

In a conversation this week, I told Gay that his business move was the first that I had actually learned in detail about this part of the energy world, and that I felt a little guilty about it. . “You’re not the only one who is relatively unfamiliar with this industry,” he laughs. “Until about 4 months ago, I was too. I had heard of landfill gas, but was not familiar with RNG or biogas based on anaerobic digestion. So I spent the last 4 months updating myself in a self-study way and I clearly have the feeling that this sector is about to experience massively explosive and disruptive growth.

Vanguard, already one of the largest players in the production of RNG by anaerobic digestion nationwide, is expected to play a leading role in this growth. “In terms of growth potential, it’s relatively limitless,” Gay said.

“The company is forked between organic farming and organic farming. On the organic side, we combine both manure and recyclable organics – these are non-compliant feed, spoiled feed, body fluids or organic solids. We combine all of these into a homogeneous suspension, which is then fed into our anaerobic digesters. So on the organic side, we end up with about 2 parts manure combined with 8 parts organics. “

Gay said the current business model is to target large urban centers with a variety of sources for this organic material – restaurants, grocery stores, etc. – which can be aggregated in sufficiently large volumes to create economies of scale.

Equally interesting is the Ag side, where the company works hand in hand with large farms to install anaerobic digesters directly on their site. “On the agriculture side, it’s just about creating biogas from cow manure exclusively,” Gay said. “They are two very different processes, but at the end of the day they produce the same end product.

“On the agriculture side, we have an incredible long-term partnership with Dominion Energy, where we have a contract to build and operate. There are different possible models. Within energy, it can be “build only”, “build and operate”, or it can simply be “operate”. So on this side of the business, our model is a ‘build and operate’ where Dominion owns the assets – which is great because it allows a relatively small business like ours today to grow exponentially without taking on the burden. the entire capital risk. “

On the organic side of the business, Gay said the company’s current plan is to “build, own and operate,” thereby taking on capital, execution and technology risk. “It is quite conceivable that over the next 5 years we could have between 250 and 500 anaerobic digesters in the lower 48 states,” he said.

When ESG concerns come into play, Gay acknowledged that RNG is an “ESG company”, but also pointed out that this company “sits at the crossroads of energy, sustainability and the environment”. The company has yet to produce a formal ESG report, but Gay said he plans to make those concerns one of his top priorities.

Gay, who holds an MBA from the University of Chicago’s Boothe School of Business, has experienced a meteoric rise throughout his career. An excellent athlete, he first turned for a professional football career, but gave that up at the age of 22 and set his sights on his business career, including – as he puts it – the goal “Arrogant” to become CEO in at the age of 40. He beat that goal by several years and, in 2016, was named to Fortune’s 40 Under 40 list, an award he called “the honor of a lifetime.”

As Muhammed Ali said at the start of his career, “It’s not a boast if you can back it up.” Given his background and accomplishments, it’s no surprise that Gay has become the choice of the new CEO of this cutting-edge company looking to significantly expand its reach.

The solutions offered by Vanguard are not a miracle cure for all the climatic ailments in the world, which is of course true for any source of energy. But this method of producing RNG comes with a virtually unlimited source of raw materials and lacks the natural constraints and international supply chain issues that threaten to severely limit other forms of renewable energy in the years to come. All of these factors and many more make it a company and the industry it is a part of that deserves to be watched in the months and years to come.



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