It all comes down to the pace of innovation in 8 cores.
Predictions of when algae biofuels will become an everyday option at scale are, famously, all over the map — ranging from “the next few years” to “never”. In a recent survey of its members, the Algae Biomass Organization found that more than 95 percent of producers believe it that algae-based fuels may be able to compete with fossil fuels as soon as 2020.
Yet, algae skeptics abound.
“Right now the fundamentals are the problem. It doesn’t matter how well we engineer our production machine, the engine under the hood just isn’t that good,” said Peter Pfromm, professor of chemical engineering and member of a Kansas State interdisciplinary team that analyzed oil produced by algae as a source of biodiesel.
Using that “most optimistic assumption,” Pfromm and team determined it would take 11 square miles of open ponds making 14,000 tons of algae a day to replace 50 million gallons of petroleum diesel per year — about 0.1 percent of the U.S. annual diesel consumption — with an eco-friendly algae alternative. “A facility close to 11 square miles in size is a steep investment,” Pfromm noted, adding, “biologically these open ponds are also problematic because they are prone to invasions by algae-eating organisms or microorganisms that can be spread by the wind.”
In critiquing the critic’s view, Barry Cohen, the executive director of the National Algae Association, says Kansas State professor Peter Pfromm is “not looking at real-world conditions”. “Pfromm’s assumption that the algae would be grown in open ponds is an old, out-dated technology, and most algae growers are using vertical photo bioreactors and fermenters,” Cohen said.
So, who’s right?
Looking at farm investment
Here at the Digest, we are not entirely sure that adding 11 square miles (7,040) acres to the US aggregate farm acreage represents a daunting challenge for US farmers, should passive-design, open-pond systems ultimately become the dominant deployment system at scale. Passive-design systems are pretty darn passive — according to Sapphire Energy, that company expects its ponds to ultimately feature no pond lining, or electricity-powered systems such as paddlewheels.
True, it’s a carefully sculpted system and is far from something as simple as a backyard garden — but so are modern US farms, which are based on highly precision-designed seeding (and in many cases, irrigation) systems. Last year, US farmers added 4.5 million acres of corn planting, compared to 2011 — an investment of at an average (non-land) cost of $516 per acre (based on estimates by the University of Illinois, here.
Net investment for that one crop, in one year? $2.32 billion. One crop, one year – we don’t see access to land or capital as a significant issue for winning technologies once they are proven at scale.
8 cores of innovation activity
In terms of whether algae will be a significant contributor to fuels production before 2020, generally it comes down to the expected pace of innovation. And there’s a lot of activity going on.
Pessimists generally believe that progress will be slow in at least one critical area. Not only slow enough to push algae’s at-scale future into the 2020s and beyond, but slow enough to make it uneconomic to invest in at the corporate level compared to other opportunities, thereby starving the sector of capital and market-access for commercial deployment.
Here in Digestville, we see 8 cores of innovative activity on a host of related frontiers including:
- Company incubation
- Strain selection
- Optimizing the organism
- Crop protection
- Growth systems
- Harvesting and dewatering
- Fuel processing
Let’s look individually at those 8 areas.
If companies fail to innovate, they die. But if they fail to rapidly develop cash-flowing solutions, they cannot attract capital, and they die that way too.
A host of companies are working on making innovation pay through internal process development. One of the most intriguing innovations we have seen in some time in company formation and incubation is based on the simpler idea of forming companies later in the innovation cycle — directing existing public resources. Now, cooperative research projects are an old idea - companies have long worked with institutions to develop technologies. But the idea of creating commercializstion ecosystems — that optimize the use of public R&D funds and organize them according to a roadmap of innovation that will lead to company formation — well, that’s a newer idea.
In recent weeks, Kapyon Ventures led two Series A capital raises: Algenetix, a company developing biofuels and other products from microbes, raised $2 million while ZeaKal, a developer of technologies to increase yields from soybeans and rice, has raised $3.8 million.
Kapyon’s theory? “New ventures will be less capital intensive and innovation will be driven more by inventiveness rather than infrastructure.”
Here, we excerpt from a white paper detailing Kapyon’s incubation model.
Algae strain selection
One of the bigger trends in the algae business has been development based on marine algae, or those that can tolerate brackish as well as salt water. Why? Freshwater is at a premium, and many algae systems, as designed, need a lot of it.
Last month, researchers at Universitat Autònoma de Barcelona (UAB), in collaboration with the Spanish National Research Council (CSIC), have discovered dinoflagellate microalgae could be a good feedstock for biofuel production. The four-year study shows that biodiesel production from the marine microalgae from the Mediterranean could be cost competitive even in uncontrolled environments.
In Australia, two key projects focused on algae biofuels and drop-in fuels from wood biomass and residues took major steps forwards with an Australian Government investment $4.5 million for Muradel.
The secret to Muradel’s technology? The exploitation of a tiny non-invasive, naturally occurring and highly productive marine microalgae that can be readily concentrated and turned into oil.
Optimizing the organism
In looking at opportunities to improve a given algal strain performance. One area? How algae communities distribute light amongst themselves.
Frankly, little algae critters are light hogs — able to capture almost 100% of the light coming their way via these microscopic photon-capturing antennae they have. But they waste up to 75 percent of that light because, as it turns out, they don’t have the ability to process all that light into energy, and most of it is dissipated as heat or florescence. Not every algae organism makes the co-operative choice that benefits the community.
Consequently, researchers think that one path to success is not making it possible for algae to harvest more light, but less. Much of this is explored in the excellent “Optimization of photosynthetic light energy utilization by microalgae,” by Zoee Perrine, Sangeeta Negi and Dick Sayre, By reducing light harvesting capabilities, they found “a two-fold increase in photosynthetic rate at high light intensities and a 30% increase in growth rate at saturating light intensities.”
Scarecrows in the corn fields, pesticides, herbicides, adding traits for resistance to drought or disease. Crop protection systems abound — but not much has been developed for algae. One area that has been intriguing in research is the idea of treating microalgae with different compounds. A group of researchers found that common antioxidants such as epigallocatechin gallate, found in green tea, and butylated hydroxyanisole (BHA), a common food preservative – have beneficial impact on overall algae growth and oil production.
Another important activity in crop protection is protecting a pond from systemic collapse. Because of the way algae is grown and produced in most algal ponds, they are prone to attack by fungi, rotifers, viruses or other predators. To address the problem, last month a team at Sandia National Laboratories and the Arizona Center for Algae Technology and Innovation is debuting a suite of complementary technologies to help the emerging algae industry detect and quickly recover from algal pond crashes.
Perhaps the ares where there is the most innovation – turbulent competition between radically different ideas, is in growth systems. It has gone far beyond a competition between open-pond and closed photobioreactor systems. In fact, three of the most innovative systems, attracting lots of capital at the moment, are hybrids between the two.
One is the greenhouse idea. That’s essentially the Heliae approach. A greenhouse is a system that works a little like a closed pond system — where you get some of the protection and optimization of a closed system but many of the cost benefits of an open system. Late last month, Heliae announced the launch of its new Volaris microalgae production platform, for producing high purity microalgae at competitive prices.
One other key idea? The concept of solving the problem of algae harvest and extraction by not dumping algae into water, but dipping them, and using the process heat and steam from a nearby ethanol plant to source low-cost energy (as well as CO2) to affordably power the system.
That’s the idea, in a nutshell, behind BioProcess Algae, which was (two weeks ago) selected to receive a grant of up to $6.4 million from the DOE, as part of an innovative pilot-scale biorefinery project related to production of hydrocarbon fuels meeting military specification. The project will use renewable carbon dioxide, lignocellulosic sugars and waste heat, co-located with the Green Plains Renewable Energy, Inc. ethanol plant in Shenandoah.
Once you have made optimized algae, you generally either have to get the water out of the algae or the algae out of the water. First step is to do some concentrating to get the algae to, say, a 20 percent concentration, up from the 0.1 percent mix it might naturally achieve on its own.
In this area, there’s been a lot of work adapting DAF systems from the water treatment industry. Sapphire Energy has been hard at work on such a system. Early last month, the San Diego Center for Algal Biotechnology is using the Algae Harvesting Technology Optimized (AHTO) dissolved air flotation system (DAF) from World Water Works at its testing facility in the Imperial Valley. It says the system harvests up to 9,000 gallons of algae-laden water can be processed per minute, at a 95 percent capture rate, yielding up to 20 percent algae concentrations.
Wet algae processing
Once you have that 20 percent algae concentration, can you directly process to fuel, from there, without further water extraction?
Two months ago, Sapphire Energy revealed that it is now producing crude oil daily from algae biomass cultivated and harvested at its Green Crude Farm. Oil extraction is conducted through a patented method for converting wet algae to crude oil, which enables algae to be processed without the need for a timely and costly drying step. With this process, which is the result of more than four years of research, development and field trials, the entire algae cell is now used in oil production, greatly improving yield. Furthermore, the process is scalable, and has proven to be effective with a wide range of algae strains.
Parity-price, on-street fuels
OK, you’ve made fuel. How is that going to get to market – what are the innovations and the innovators there? The biggest news in years on that front has occurred over the past six months. In a pilot program, SoladieselBD B20 was retailed at a parity price with conventional diesel fuel at Propel Fuel stations in the Bay Area. Propel Fuels and Solazyme announced that sales grew by 35 percent at Propel stations, offering SoladieselBD in a B20 blend during a 30-day retail pilot program.
A follow-on consumer preference study with Propel’s customers found 92 percent of participants noted that they would be more likely to purchase algae-derived fuel for its environmental benefits; 70 percent indicated that they would purchase the fuel more frequently if it were derived from algae; and nearly 40 percent of customers indicated they would pay a premium for algae-derived fuel.
The Bottom Line
It’s frankly too turbulent at the moment — too much innovation on too many fronts — to make stable projections about when algae fuels will become an affordable reality. However, one thing is clear — counting algae out, even before 2020, is a no-no for researchers. It requires scientists to make too many high-risk guesses about the pace of innovation.
Important to remember that algae fuels are based on a system of systems, not a single technology or even a suite of technologies. Our progress in distributing messages from mail service to wireless email — by which the Digest itself is distributed today — involves a convergence of technologies such as wireless protocols, bandwidth building, reliability assurance, cable deployment, tower building, routers and networking, transmission control protocols, and encryption — not to mention the development of an entire suite of devices, stores, business models, marketing tactics and a wave of customer adoption.
All that, too, looked completely daunting just a dozen years ago.
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