Tillamook County, home to the eponymous creamery cooperative, has over 25,000 cows—and those cows produce a lot of waste. But Farm Power Northwest is about to turn a problem into a solution. Using manure from 2,000 cows, its anaerobic manure digester will generate almost 1 megawatt of electricity—enough to power 600 to 700 homes.
The digester, scheduled to begin production in March 2012, produces energy, reduces odor and makes for easier manure handling. In the process it breaks manure down into nutrient-rich fertilizer and pathogen-free fiber that farmers can use as bedding for their cows.
The Tillamook project is Farm Power’s third completed digester; two more are expected to go online later this year. The Skagit County, Washington–based company, founded by brothers Kevin and Daryl Maas, is on a mission to help dairy farming communities thrive and to produce sustainable energy locally.
The right bank is a must
Securing the multimillion-dollar loan it takes to get a digester from construction to operation can be tough with conventional banks, says Kevin Maas. “A progressive bank like New Resource sees the value in alternative energy production and stronger communities,” he says. “Other banks ask, ‘Do you own the land?’ And that’s where the discussions break down. They aren’t interested in the end product; they just want to know they can take the land if something goes wrong.”
But, Maas points out, a digester loan can be more secure than many other loans. Farm Power has an electricity sale contract with a utility agency, in this case the Tillamook People’s Utility District, that strengthens its ability to repay the loan. Working closely with New Resource, Farm Power takes advantage of carbon offsets, tax credits and the USDA Rural Energy for America Program (REAP), which provides financial support for agricultural energy projects via loan guarantees and grants.
“We’re using a USDA guarantee on this project, which offsets our risk,” says New Resource Senior Vice President Rob Holden. “This can enhance the credit of the loan. Understanding how to use that program to mitigate risk is important, as is understanding how local and national energy grants can be used. This is an area where we excel.”
Making cash from manure
Given Farm Power’s mission, Kevin Maas is focused not on rapid expansion, but on making his current projects a success for the next 30 to 40 years.
Maas and his brother are happy with what they have achieved so far. “We love making payments to our bank every month,” he says, “because it means everybody got it right. We’re creating cash out of manure.”
Photo courtesy Flickr user DrBjorn