Toronto-based startup StormFisher Biogas has partnered with private-equity firm Denham Capital of Boston to create a $350 million fund that will be used to source out, construct or buy into about 30 biogas projects across North America. The composition of the fund will be part private equity and part debt financing.
StormFisher, started a couple of years ago by three MBA grads, is focused on sourcing out agricultural and food-industry byproducts that can be easily converted to methane gas using anaerobic digester technology. We’re talking everything from cow dung to grape residue from winemaking. The aim is to prevent all this material from entering a landfill where it will decompose and release methane (as a greenhouse gas 21 times more powerful than CO2) into the atmosphere.
For the company’s first three projects, located in Ontario, the biogas will be used to generate electricity that will be sold into the province’s electricity grid at 11 cents per kilowatt hour under its standard offer program. Outside of Ontario, the gas is likely to be sold into the natural gas distribution network and used for heating applications.
Denham has experience investing in this area. Last November it struck a $1.5 billion partnership with Recycled Energy Development (RED) to fund waste energy recycling projects across North America. RED’s chairman Thomas Casten is a pioneer in the development of combined heat and power systems and recovering industrial waste energy. Earlier this month RED signed a $50 million deal with West Virginia Alloys, the country’s largest silicon producer, to capture and make steam from the hot gases coming out of its silicon furnances. The steam will run a generator to produce 40 megawatts of electricity.
Casten has been a vocal advocate of waste-energy recycling in Ontario, but it seems the government here — while it has listened — hasn’t been keen to act. It’s a shame. As for StormFisher, it’s nice to see some local boys making lemonade from lemons and attracting the capital to do it.