ARTICLE: Clean energy venture lands equity, capital commitment
January 10, 2018
Boston firm helps give former PHG runway to build half dozen gasification plants
Waste gasification company Aries Clean Energy has secured more than $21 million in equity as well as a $25 million commitment to help it capitalize on a promising pipeline for its small-scale plants.
The new equity has come from Thompson Machinery, which helped launch the venture as PHG Energy in 2010, as well as several members of the Thompson family. New to the picture — and pledging to help fund plant construction — is Boston-based Spring Lane Capital, a private equity firm that focuses on the energy, water, food and waste industries.
Aries CEO Greg Bafalis told the Post the financing, which BNP Paribas helped arrange, will let his team push on with contracts it expects to close in the coming months. La Vergne-based Aries’ plants take wood and municipal waste that can’t be recycled or digested and uses a high-temperature thermo-chemical process to produce a synthetic gas as well as high-carbon biochar.
“This is a new technology […] and still a learning curve for our customers and communities,” Bafalis said. “This funding lets us get out there and do multiple projects, to show how it works.”
Aries in the fall of 2016 commissioned what it says is the world’s largest downdraft gasifier in Lebanon. At capacity, the facility can process up to 64 tons of waste daily and produce up to 420 kilowatts of electricity. Lebanon officials are using that energy to help power their wastewater treatment facility.
Bafalis said Aries, which gets its revenues from tipping fees for the material it takes in as well as by selling its energy, can generate high-teens rates of return on its projects. There also are still big efficiency gains to make, he added, primarily by pumping synthetic gas directly into a generator rather than using heat transfer.
With the new equity and Spring Lane’s capital commitment, he expects to be able to launch and finance five or six projects — each with a total cost of $25 million to $30 million — in the next two to three years. Around the country, he said, his team has identified more than 1,000 potential customers, most of them mid-sized communities like Lebanon. If things go according to plan, Aries’ local team of 20 could double in the next five years.