to set up anaerobic digesters that are co-located at existing compost facilities. These digesters, which Allen likens to a “concrete cow stomach,” are set up to create the ideal mix of temperature, moisture, and percolation so that Mother Nature’s microbes can do their digesting magic more efficiently than they would in an open landfill. The digesters can throw off natural gas in 14 days, instead of about 14 years in the typical landfill environment, Allen says. The technology is simple, and requires few moving parts, he says. The resulting gas can be converted into natural gas fuel, or used to power big engines that generate electricity. The biomass that’s left over, after the gas is skimmed off, is turned into soil.
Harvest’s big break came in October 2009 when it purchased Fraser Richmond Soil and Fibre, a family-owned business that was founded in 1993. Fraser Richmond’s plant near Vancouver, BC, was, and is, one of the largest compost facilities in North America. The location couldn’t have been better for a business like this—it’s located near lots of progressive-minded consumers, there’s a public awareness campaign to support composting, the Canadian government provides grants to help build capital-intensive green facilities, and local utilities have agreed to pay “very generous” prices for electricity generated by this anaerobic digestion of organic waste, Allen says.
Harvest is already profitable from selling the soil that comes from the Vancouver compost facility, Allen says. But the company is putting itself in position to get even more interesting about a year from now. That’s when its “concrete cow stomach,” should be in position to churn out commercial-scale quantities of natural gas.
Vancouver will be a critical test market for Harvest, which could lay the groundwork for lots of other geographies, Allen says.
While Allen lives in Seattle—and says he personally didn’t want to move to Boston to be with Sellew and the other co-founders—there’s a business reason for Harvest to have a toehold here in the Northwest. Seattle, like Vancouver, is home to many green-conscious, early-adopter consumers. The Emerald City also charges some of the highest prices in the U.S. for trash removal, about $145 a ton, Allen says. And, like all major metro areas in the U.S., Seattle produces enormous piles of trash. The City of Seattle alone, not counting surrounding areas, produces 100,000 tons a year of landscape waste, and another 100,000 tons a year of commercial food waste that is the raw material of Harvest Power’s dreams.
There isn’t really much in the way of competition for this material—it’s mostly destined for the landfill. But there are barriers to entry. In every location you look at on the map, somebody today is getting paid to manage the waste stream exactly the way it works today. Consumers can be notoriously fickle or indifferent about composting. Local politicians may or may not beat the drum for the composting cause. While Harvest wouldn’t say so on my visit, I can imagine there is a complex legal and political thicket of crony contracts for trash hauling in most municipal areas.
“We are competing against the status quo,” Allen says.
Like any startup, it won’t be easy, but Harvest has some powerful allies on its side. Al Gore’s investment management firm, London-based Generation Investment Management, led a financing round that was worth more than $50 million in March. The Canadian government has lent a hand. Munich Venture Partners brings some trans-Atlantic perspective. And Houston, TX-based Waste Management (NYSE: [[ticker:WM]]), the largest trash hauler in North America, has gotten on board to invest.
How big this could get is anyone’s guess. It’s certainly not the answer to global warming, even if it’s replicated in every major center in every developed country. “We can’t replace big coal plants or hydropower facilities,” Allen says. “We can’t make gigawatts of power. We’re talking about megawatts.” And Harvest is a distinctly local business that will need to build clusters of infrastructure in densely populated areas to reduce transportation costs—nobody is going to haul organic waste across the country just to make some natural gas.
Still, there’s no doubt the company has a big idea, and appeals to constituencies who want to see reduced waste in our society and more renewable sources of energy. If the Vancouver plant proves the model feasible for other cities in the U.S., Harvest might even be the kind of story that convinces Kleiner Perkins to hatch companies more often. “This is a game changer,” Allen says.
