Proterro wins key Notice of Allowance for its photobioreactor from USPTO

February 19, 2014 |

Photobioreactor is a key innovation in Proterro’s patented sugar-making process now deployed at the company’s pilot plant in Orlando, Florida

In New Jersey, the United States Patent and Trademark Office has issued a notice of allowance to Proterro, Inc., for a device patent that protects the company’s proprietary photobioreactor, a novel element in Proterro’s already-patented sugar-making process (U.S. Patent No. 8,597,914).

Proterro’s unique photobioreactor is robust, modular and made from off-the-shelf materials. It provides for the growth of Proterro’s also patent-protected, sugar-producing transgenic cyanobacteria (U.S. Patent No. 8,367,379) and the harvest of a fermentation-ready sucrose stream.

Specifically, based on U.S. Patent Application 13/737,201, allowed device claims describe a photobioreactor for cultivating Proterro’s unique cyanobacteria or other photosynthetic microorganism, explained Proterro CEO Kef Kasdin.

“The claims describe a photobioreactor that includes a non-horizontal, solid cultivation support and a physical barrier over the cultivation support,” she said. “They also describe integration of systems for optimizing light, water supply and sugar collection.”

Proterro Pilot Plant Commissioned

Noting that Proterro has commissioned a pilot plant in Orlando, Fla., where sugar production has begun on a small scale, Kasdin said that, ultimately, Proterro’s sugar “could be used as produced or concentrated and/or purified to a grade appropriate to its application.”

Why the pilot is a bigger deal than usual

In the case of most biofuels companies, which rely on large-scale technologies, the pilot stage is followed by a long set of scale-up steps to prove that the process can be realized at full-scale — and there have been significant delays, for example in the commissioning period, as companies get the kinks out. KiOR, INEOS Bio, Amyris and Gevo are among the companies who have stumbled at the gate, owing to difficulties at scale not easily forseen from the pilot data.

It’s one of the reasons why, even this close to commissioning, observers hold their breath collectively at the thought of POET-DSM, Abengoa and Solazyme’s first commercial plants appearing in the first half of the year.

In the case of Proterro, this is a modular system — rather than reaching scale by building larger and larger primary fermentation vats, the company has a modular design, and reaches scale by multiplying out the number of modules employed. So, there’s scale-up risk of a different sort because the unit only gets so big.

The next (demonstration step) goes beyond proving out that the core technology works as intended. In the pilot, the system is feeding CO2 to the organisms in a lab-like manner — the demonstration step is where as many as 100 reactor modules will be linked to a CO2 distribution system — think of it somewhat as moving from cooling yourself with a fan to cooling yourself with a house-wide air conditioning system.

Another reason this pilot is significant? In this case, Proterro is not building a liquid-phase or gas-phase system — essentially, it’s solid state. Rather than bathing the organism in water (as in the case of fermentation vessels), the cyanobacteria is kept moist by a water-dripping system (that also ultimately captures the sucrose that the cyanobacteria is secreting – with gravity pulling the drips down into a collector). Which means that one of the technical problems that has puzzled other companies, keeping the water temperature from creeping up so high that it impedes the organism’s productivity — is not really a factor here.

Proterro, what?

Here’s a look at the photobioreactor:

proterro-bioreactor

Proterro, who?

Using CO2, sunlight and water, Proterro has developed a patented sugar-making process that yields a fermentation-ready sucrose stream, removing the price volatility that comes with crop-based feedstocks and eliminating the complex and costly steps required to produce cellulosic sugars derived from biomass.

Besides having commissioned a pilot plant, the company has completed a preliminary design, layout and associated cost estimate for a demonstration-scale plant. Proterro is leveraging its core intellectual property to create a 70+ patent portfolio.

Backed by Battelle Ventures, Braemar Energy Ventures, Cultivian Ventures and Middleland Capital, Proterro has been recognized by Lux Research as a top innovative company that stands out for its “disruptive potential.”

Proterro, why?

Proterro is the only company making sucrose instead of extracting it from crops or deconstructing cellulosic materials. In this case, making it from otherwise valueless CO2 coming from the fermenters or the flue stack — which we point out to be called “money escape stacks” because companies that employ them are venting money into the atmosphere in a gaseous state. Plus a relatively light amount of water, plus free sunlight.

The data on yields is not something that Proterro has yet shared publicly — but let’s take a general rule that it would take something like 12 molecules of CO2 to make one molecule of sucrose, and something in the range of 1.5 pounds of CO2 to make a pound of sucrose, theoretically — and let’s hope for one pound of sucrose from 4.5 pounds of CO2 after we’ve allowed for some inefficiency in terms of the microorganism. If that were the case, you could generate something like four pounds of sugar per bushel of corn at a corn ethanol plant from the waste carbon vented as CO2 from a fermenter.

At ten cents a pound, that’s something like 45 cents in added value, per bushel. Considering that a 100 million gallon ethanol plant uses something like 35 million bushels of corn — you’re looking at something approaching $15 million in value add, per year, without changing the inputs.

As we said, consider these values speculative because the yields of the Proterro microorganism are not out in the wild, as they say. Consider them indicative of the scale of the value-add, rather — which is to say, something in the value-range of corn oil extraction in terms of value creation.

And in a world where, for example, Green Plains Renewable Energy’s stock is trading at 20 times earnings — this could have a substantial market cap impact, even taking into account that the value will be split between Proterro and its customer and, after direct costs and taxes.

And that’s before considering the market-value of, say, ten-cent sugars — in terms of liberating value trapped within other companies doing sugar fermentation — trapped, that is, by the high price of dextrose or other available sugars captured through plant extraction technology. While companies such as Solazyme, Amyris and REG’s LS9 unit can find markets in specialty chemicals and nutraceuticals even at current sugar prices — the big volume markets in fuels await a breakthrough in sugar prices.

The Bottom Line

So we continue to keep a close eye on Proterro as it moves along its development path. They are expected to begin constructing a demonstration of the technology in 2015 — and the expectation would have to be that Proterro will locate that project alongside a strategic partner and investor that is a source for the CO2 and may be a customer for the sugars, which could be delivered to an onsite partner in the form of a sucrose/water solution, ready for fermentation.

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