Jenny Mandel, *Greenwire* reporter

Used vegetable oil from restaurant deep fryers has long been waste that
restaurants paid to have trucked away. But times are changing.

Skyrocketing fuel costs have allowed some restaurant owners to avoid
disposal costs by giving the waste oil to car enthusiasts who have found
ways to run it through their engines. And some "grease bandits" have even
been known to tap restaurant grease vats and siphon off the valuable stuff.

And soon, restaurant owners may have a new option. Enter Vegawatt -- a
diesel engine that burns used cooking oil to generate electricity and
preheat water for cooking and cleaning.

Now being site-tested by Boston-based Owl Power Co., the system is designed
to give restaurant owners the benefits from their used fuel that might
otherwise go to motorists.

"Right now, the biodiesel folks and the grease car folks are getting that
oil for free, and restaurants are actually giving that away, and it has a
lot more value than they realize," said Chad Joshi, Owl Power's chief
executive.

Joshi estimates that with a Vegawatt unit, a typical burger joint or
doughnut store can save 20 cents in disposal costs per gallon of used oil,
while generating electricity worth $2.20 and, by using the engine's waste
heat to pre-warm water used in the restaurant, avoid 60 cents in natural gas
costs.

Many restaurants store waste oil in 55-gallon drums or other large
containers for disposal, and Owl Power's unit would replace that, Joshi
said.

Currently seeking beta testers in the Boston area, the company plans to
start leasing the units in the fall for about $400 per month, Joshi said.
Energy savings at the target facilities would be $700 to $850 per month,
depending on how much fry oil the restaurant uses.
Supersized potential?

The company is talking with big names, including McDonald's and Chili's
Grill and Bar, as well as independent Chinese restaurants and other shops,
and is targeting "any chain that you could name," Joshi said.

"There are over a million restaurants in the U.S., and about 25 percent
would be candidates for having one or more of our units," he said. Chili's
representatives did not return a call requesting comment.

Veggie oil disposal companies typically model their businesses on converting
used oil to biodiesel, according to Joshi. Since those companies have
significant infrastructure costs to collect and transport the fuel, he
thinks Owl Power has a competitive advantage, even if the price of diesel
goes high enough that disposal companies would be willing to pay restaurants
for the waste oil.

For eateries eager to flaunt their "green" credentials, reusing fry oil
on-site could be as tempting as a to-go bag of doughnut holes. Of course,
since disposers also make fuel from the grease, the eco-credentials of the
two processes would be roughly comparable. But generating electricity from
fryer power has a ring of eco-cachet that could prove irresistible in
today's marketing climate.

Joshi said Owl Power is privately held by himself and company President
James Peret and will be looking for new funding and partners over the next
year to expand nationwide.

If the business takes off, it could spell bad news for "greasers," the auto
hobbyists who modify diesel engines to accept vegetable oil. Running a car
on the stuff requires tricky switching between a starter fuel like biodiesel
and the fry grease, but a slew of Web sites and user groups exist to help
novices figure out how to convert their cars and where to find friendly
restaurateurs who can help them power up.

Converting a car to run on veggie oil is illegal, violating emissions rules
in the Clear Air Act. "Vegetable oil has not been registered as a motor oil
diesel fuel," said an EPA spokeswoman, so selling the stuff is also an
offense, though giving it away does not appear to be regulated at the
federal level.

Rather than get involved in the shady world of grease theft and back alley
car conversions, restaurant owners may well take to the idea of using their
own, home-cooked energy.
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