Today in part II, we look at a new set of technologies coming along that are redefining our ideas about scale and cost.
As seen in part I of Biorefinery 2015: the first wave of cellulosic biofuels projects are now reaching completion. It’s a remarkable story of expansion.
According to a report from Tristan R. Brown and Robert C. Brown at the Bioeconomy Institute at Iowa State University — 266 million gallons in cellulosic biofuels capacity is slated for completion by 2014.
A barrier to long term deployment? The $11 per gallon average capital expenditure, or capex — and the average price tag of $302 million per project. It’s a tribute to the companies — and their backers — that they are able to raise the capital for first-of-kind technologies — long-term, we know that capex must come down. But how?
Low-cost paths to scale, that’s one part of the equation, for sure. There are multiple strategies for capital light deployment — and we look at them today.
Disruptive technologies with modular scale
Rethinking thermal technologies, Cool Planet has been involved with Google in developing a small-scale version of its technology. Cool Planet has what it calls a biomass fractioner. What’s that? The Cool Planet idea is essentially one of sequestration.
Instead of running the biomass over one magic catalyst in a fluidized bed reactor, and then trying to do something with the resulting pyro oil, Cool Planet’s systems is based on a series of reactions: Heat biomass into a gas, pass over a catalyst, cool into a soup of liquid molecules, pull off the ones you need (e.g. the gasoline-range molecules); then repeat the process numerous times, with different temperatures and pressures at each reactor “station” and unique catalysts, until you have converted all the volatile gases into gasoline-range molecules. You are left with a residual bio-char.
Recently, Cool Planet Biofuels said it achieved 4,000 gallons per acre yields for production of renewable gasoline, and are projecting 3,000 gallons per acre based on what they believe are sustainable feedstock yields.
Joule is expected to complete construction on its first commercial-scale unit down in Hobbs, New Mexico this year. CEO Bill Sims told the Digest that what you would see at Hobbs is a series of 1 meter “capsules” for converting CO2, sunlight and brackish water into target Sunflow fuels. In contrast to fermentation systems, the Joule system can start up quickly. “There’s no waiting for years. If our target for a project is 1000 modules, we can build 250 right away, and keep adding on. That derisks the technology and project for investors.”
Upgradable? “Absolutely upgradable,” Sims confirms, “and the units can produce either Sunflow-E or Sunflow-D, based on market conditions. “There is no limit on size in the process itself,” noted Sims. “Nutrients are inexpensive and readily available. A 600 MW power gen facility partner gives us enough CO2 for 25,000 acres. Because we use brackish water or seawater, there’s no limit there either.”
Speaking of modular systems for handling sunlight, water and CO2, consider Algenol. Earlier this month, Algenol confirmed that the company had exceeded production rates 9,000 gallons of ethanol per acre per year — and company CEO Paul Woods said that ” I fully expect our talented scientific team to achieve sustained production rates above 10,000 by the end of this year.”
Woods added, “Our patented ‘Direct to Ethanol’ technology enables the production of ethanol for around $1.00 per gallon using sunlight, carbon dioxide and saltwater. The low production costs are achievable because ‘Direct to Ethanol’ technology produces high yields and relies on our patented photobioreactors and proprietary downstream techniques for the low-cost recovery and purification of ethanol.
“One tonne of carbon dioxide (CO2) is converted into 160 gallons of ethanol, and 2 gallons of fresh water are produced for each gallon of ethanol in the ‘Direct to Ethanol’ process. Algenol intends to complete its DOE Biorefinery in 2013. At full scale, the facility will consist of 17 acres filled with photobioreactors, and will produce 100,000 gallons of ethanol per year. The company expects to have a commercial project producing ethanol by the 4th quarter of 2014.
One of the problems of Fischer-Tropsch systems is that they generally require massive scale — hence massive capital costs, and the associated risks of trapped capital. Velocys’ technology produces commercially feasible FT fuels in the 500-5,000 barrel per day range, and with the smaller production footprint can take biomass from a smaller area, increasing the commercial returns. The company develops Fischer Tropsch (FT) microchannel reactor technologies — and has a BTL demonstration plant jointly operated by the Oxford Catalysts Group and SGC Energia for the small scale distributed production of biofuels via the FT reaction at the biomass gasification facility in Güssing, Austria.
Disruptive project structures
To reduce costs — there are paths that involve not only disruptive technology — but innovative use of existing infrastructure and residue feedstock.
Bolt-ons: Gevo, Butamax, and Green Biologics are all working on bolting on biobutanol technology to existing ethanol infrastructure. Downtime for the ethanol plant is a month or less, and with one set of core technology added, the plant has the capability to produce $4 butanol molecules in addition to $2.50 two-carbon ethanol. Because almost the entire ethanol infrastructure is utilized by the new process — payback is said to come as quickly as in three years time, No wonder plants representing more nearly 1 billion gallons in ethanol capacity have enrolled in early adopter programs.
Co-location: POET-DSM is an example of a trend — less intrusively integrated than, say, biobutanol — in this case, bringing extra capacity to an existing plant through a co-located enzymatic hydrolysis technology for making cellulosic ethanol. POET-DSM expects to bring this technology to the 27-plant POET network over the next few years.
Industrial symbiosis: One of the most fundamental ways to reduce cost for advanced biofuels is, for feedstock or process heat and steam, to tap waste residues available in the long-term at negative or nominal cost. Inbicon, LanzaTech, BioProcess Algae, and Pond Biofuels are examples. LanzaTech uses steel mill blast furnace off-gases (which currently must be sequestered or flared). Inbicon uses process heat and steam from co-located power plants, and in turn feeds those systems a lignin by-product that can be used in place of coal. BioProcess Algae uses CO2 from an ethanol plant as a feedstock for producing algae, while Pond Biofuels gets its CO2 from a cement plant.
One of the most disruptive approaches is to utilize a partner to supply renewable sugars. Years ago, it was thought that the best path to cellulosic biofuels was through vertically integrating the process — especially saccharification and fermentation combined into one step.
On the pre-treatment side, it’s become increasingly evident that producing renewable sugars as a specialized activity has a lot of merit. There are companies like Sweetwater and Renmatix that make sugars from biomass, and there are companies like Proterro that create sugars directly from CO2, sunlight, water, and nutrients.
Disruptive pilot and demonstration costs
We’ve seen it in the pharma business. Once, early-stage companies had to build out everything on their own. Now, companies can access ready-made pilot-scale facilities — and it’s a trend that is coming to biofuels. Labs such as NREL and Lawrence Berkeley have process demonstration units that can be configured to serve a variety of processes. The hope is to make “virtual companies” possible through the pilot stage – perhaps reducing “pilot-scale” costs from, say, $10 million down to under $2 million.
Just this week, the Michigan Biotechnology Institute and Michigan State University have entered into a new collaborative arrangement, under which promising bio-based technologies will be accelerated from the laboratory to commercial deployment. The agreement combines MSU’s research expertise with MBI’s derisking process and state-of-the-art bioprocessing facilities to quickly and efficiently demonstrate the market-readiness of new technologies. Intellectual property arising from the collaboration will be bundled, providing industrial partners with both a more valuable technology package and a streamlined process for accessing the technology.
Small-scale ethanol. In December, we profiled a deal between the UK’s Whitefox Technologies, together with its Brazilian partner Green Social, will supply a small-scale ethanol plant to GuySuCo’s Albion sugarcane mill in early 2013. The distillery will use membrane technology for dehydration. The project is supported by the Inter-American Development Bank in hopes of reducing the country’s dependence on imported energy.
Last year, we noted the emergence of Synenergy, and their distributorship via Allard Energy. Allard will provide research, development, and manufacturing services to support Synenergy’s ongoing distribution of ethanol production refineries and related products. Allard supplies small- to medium-scale ethanol refineries designed to support a new distributed fuel production model. Rather than building large-scale ethanol plants, Allard’s distributed fuel production model will have many smaller modular ethanol refineries spread across a geographic region that can leverage different types of feedstock.
One year ago, efarms disclosed that it is developing solutions for producing small-scale, ‘community fuels,’ or ethanol produced from yard waste as well as unwanted fruits, vegetables and other starches and sugars. The company will be rolling out the first 25 to 30 machines this spring for more traditional farm setting production of ethanol like corn, grain and fruit growers. The company is projecting to sell about 100 HD50s the first year with a price range of $140,000 to $150,000 with 18 to 30 month payback periods.
A product that has been around for some time is the eFuel Microfueler, a household appliance-sized unit that creates ethanol fuel (E-Fuel100) from organic waste and cellulosic feedstock. Ignition products company Enerpulse has announced that their proprietary Pulstar pulse plugs will be included on the E-Fuel Grid Buster as factory equipment. Grid Buster is a generator specifically designed to operate on E100. The combination of the MicroFueler, Grid Buster and Pulstar plugs create electricity for $.02/kWh, according to the firm back in 2010. E-Fuel founder Tom Quinn aid that the 1000 KW ignition power of the Pulstar plus was a key ingredient in efficient ethanol combustion.
Small-scale algae systems. Back in 2011, Evodos launched a small-scale centrifuge, with a feed flow of 750 liter per hour, the “Type 10″ positions itself for processing by research institutions, inoculation processes, small-scale algae operations and testing for algae harvesting and various other mixtures. The Evodos SPT technology allows high separation effectiveness, a dry solid discharge and minimal energy demand.
Small-scale Biodiesel. In the UK, Practical Energy Solutions has developed a process called the Biopot that will transform 75 liters of oil into biodiesel in 20 minutes for under 80 cents per liter. The product costs $3,740, produces up to 375 liters of biodiesel per day and pays itself back in under a year when used at maximum capacity.
Small-scale Gasification. Back in 2011, Waste Management announced a strategic investment in Agnion Energy, to advance Agnion’s small-scale allothermal gasification technology. Agnion’s innovative allothermal gasification technology converts solid biomass feedstock into a high hydrogen and carbon monoxide-rich synthetic gas (syngas) with exceptionally high heating value. Agnion’s unique and simple Heatpipe-Reformer design provides a flexible, small-scale on-site gasification technology solution for relatively low capital cost.
Small-scale Ammonia fuel. Also in 2011, we profiled efforts by John Fleming of SilverEagles Energy and Jim Maxwell with Texas Tech University — they are working up a process to produce ammonia as fuel. If successful, their system can be installed at local filling stations where it will produce hydrogen by electrolysis and then pull nitrogen from the atmosphere by way of the Haber-Bosh process. The ammonia can then be used as a fuel for vehicles, producing only water and nitrogen as emissions. The individual units will reportedly be able to produce between 4000 and 40,000 liters a day.
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