Dive Brief:
- TotalEnergies and Vanguard Renewables are embarking on a partnership to build dairy digesters in at least 10 locations, with the possibility for more. The deal for the renewable natural gas facilities was signed April 12 and announced Wednesday, per a release.
- The partners plan to build the first three anaerobic digesters on dairy farms in Wisconsin and Virginia. They anticipate beginning work on the remaining seven facilities within the next 12 months. Each facility will produce about 75 gigawatt-hours of energy annually.
- The initial 10 facilities will produce about 0.8 terawatt-hours of energy annually once completed, bringing TotalEnergies closer to its goal of producing 10 terawatt-hours, or 10,000 gigawatt-hours, of RNG by 2030.
Dive Insight:
The joint venture is one of the largest RNG deals of the year, adding to the growing roster of partnerships that are fueling investment in the space.
“We are thrilled to welcome TotalEnergies as a strategic partner, building on our mission of developing farm-based organics-to-renewable natural gas projects across the United States,” Neil Smith, CEO of Vanguard Renewables, said in a statement. “This collaboration validates Vanguard’s leadership position in the RNG space in the U.S. and brings together our expertise with TotalEnergies’ extensive experience in large-scale energy development, safety procedures, and global partnerships.”
The announcement comes amid Vanguard’s ambitious plans to commission 100 facilities by the end of 2028. BlackRock’s Diversified Infrastructure business supercharged the company’s growth after one of its funds acquired Vanguard in 2022, valuing the RNG company at roughly $700 million and opening up access to deep coffers for new investment.
“This exciting partnership brings together TotalEnergies’ global experience in scaling and operating renewable gas assets with Vanguard Renewables’ market-leading position in the United States, extensive operational history and customer relationships, and robust project portfolio,” Doug Vaccari, managing director of diversified infrastructure at BlackRock, said in a statement.
The joint venture adds to a growing number of partnerships in the RNG space. Among waste companies, Republic Services and Archaea Energy (now a division of BP) set a high-water mark with a deal in 2022 to jointly develop 39 landfill-gas-to-RNG projects. Last week, Clean Energy Technologies also signed a memorandum of understanding with Asia Management Energy Capital Partners to get up to $12 million in funding for a Vermont RNG project and establish a presence in the Asian market.
TotalEnergies is among many of its peers in the energy space investing in waste-derived fuels. Olivier Guerrini, vice president of biogas at TotalEnergies, said the deal would also “accelerate the development of food biowaste processing into renewable natural gas in the United States.”
“By expanding into this fast-growing market, our joint venture will create value for both companies while benefiting the food and farming sectors as well as providing a ready-to-use solution to industrial companies willing to decarbonize their energy supply,” Guerrini said in a statement.
The facilities will be built and operated by Vanguard, with TotalEnergies providing industrial expertise. While the digesters will be built on dairy farms and process manure, they will also codigest organics recovered via partnerships with members of the food and beverage industry. The RNG produced at the facilities will then be sold via long-term purchase agreements with industrial partners.
Massachusetts-based Vanguard operates 17 such organics-to-energy facilities today that produce about 440 gigawatt-hours of energy. The partners “will consider investing together” in a larger agreement for 60 facilities, which would produce up to 5 terawatt-hours of energy if built, according to the release.