The DOE’s shifting worldview for biofuels deployment, now through 2030

Feedstock costs and challenges come under the microscope as the DOE reports new data on algae-based feedstocks and terrestrial crops too.

Can algae-based biofuels reach full commercial scale by 2030? The Digest investigates.

Twice this year, the US DOE’s Bioenergy Technologies Office has issued a revision of its ongoing Multi-Year Program Plan, once this summer around the time of the DOE Biomass 2014 meet-up, and once just recently in a report update that included new data and more detail on the DOE’s efforts in thermochemical conversion, and on algae-related development.

The complete report is here and is a must-read for anyone interested in the state of US industry — from production costs to available tons of biomass — or interested on how the future is likely to shape up and where DOE might place its R&D emphasis as it drives towards it’s overall goal of, roughly speaking, $3.00 biofuels (per gallon, gasoline equivalent). You can download the latest update here.

Let’s look at the revisions between July and November, as an opportunity to look at how new data shapes and shifts the biofuels R&D landscape.

The biggest changes come in the form of publication of the DOE’s two pathways, in algae biofuels, specifically the projections for the Algal Lipid Upgrading Pathway (ALU), and the Algal Hydrothermal Liquefaction Pathway (AHTL). But there also is some work on terrestrial feedstocks, too, and we’ll start there.

Terrestrial feedstocks — the drive towards $80 per ton feedstocks at large volume

Most of the DOE’s work around terrestrial crop-based biofuels requires an $80 per dry ton acquisition cost for the underlying feedstock. It simply isn’t feasible, the DOE has long concluded, for the technologies to reach $3.00 per gallon (gasoline equivalence) with feedstocks in the $100 range.

Yet, that’s where purpose-grown trees are at the moment — which are the feedstock available in relative abundance right bow, whether it is the managed forests of the US Southeast or Pacific Northwest, or north of the border in the Canadian forests in Ontario or along the Rockies.

So, what’s to be done? The DOE sees a “blended feedstock” approach, where high-volume but high-cost feedstocks like purpose grown pines are offset by lower cost energy crops, construction wastes and logging residues.

What about other feedstocks as they come online? The DOE adds in its November 2014 update:

Moving beyond 2017, the blending strategy will allow even more resources to be made economical and of appropriate quality for bioenergy production, while still hitting the $80/dry ton cost target.

Here’s the DOE model for reaching an $80 modeled feedstock cost.

So, think blended feedstock streams to hit the targets for cellulosic fermentation, or for thermochemical approaches such as fast pyrolysis.

What about volumes? Here’s the DOE view on what will be available, when, for that targeted cost of $80 per dry ton.

Logistics: The Hidden Cost of Biomass

If you think all that dough is going to the grower, think again: The DOE is thinking around $20-$25 per ton as a grower payment — the rest is in the logistics — harvest, preprocessing, transport and in-plant receiving. Here’s the DOE view on the split between the various elements.

It may surprise observers to learn that the single highest cost element associated with advanced biofuels using advanced feedstocks is the “in-plant receiving and processing”.

Over to algae: it’s looking like a long, long wait

In this update, there was a lot about algae, primarily the DOE’s data from its two design cases — much of that work built out of the findings from the NAABB consortium’s work, as well as from experiences with the DOE’s funding of pilot-scale operations and demonstration farms, primarily in its work with Sapphire Energy and Cellana.

The DOE writes:

Design cases for these two pathways…highlight key challenges, provide a framework for prioritizing R&D, and track progress toward performance goals and milestones. Each pathway assumes photoautotrophic cultivation of algal biomass in open raceway ponds. The pathways may differ in types of algae cultivated, as well as harvesting, preprocessing, conversion, and recycle/wastewater treatment operations. Alternative designs for innovative operations and additional products continue to be developed and evaluated, and they will be incorporated into the Office’s strategic plans as they show promise.

Note that the DOE has decidedly come down on the side of open ponds for algae biofuels.

The lengthening timeline

In July, the DOE had this 2030 milestone:

By 2030, validate production of algae-based biofuels at total production cost of $3/GGE (2011$), with or without co-products.

By November, this shifted to:

By 2030, validate demonstration-scale production of algae-based biofuels at total production cost of $3/GGE (2011$), with or without co-products.

So, the DOE is pointing up towards demonstration of $3/gallon algae technology by 2030 (fuel costs in 2011 dollars), and presumably deployment will come after that.

A Shift in viewpoint on algae “integration and scale up”?

In July, the DOE wrote:

Specifically with current algal biomass production, promising algal feedstock development may be developed in laboratory settings under ideal and tightly controlled environments. However, algae production in non-simulated environments with exposure to variability, contamination, and stochastic events is critical to understanding and demonstrating progress relevant to real-world cultivation conditions.

Similarly, integration between production and logistics operations is important. A challenge for research and pre-pilot-scale integration is aligning production capacity with harvest and processing unit operations, as this can require significant commitment of human capital and financial resources. Scale-up activities may ultimately be handed off to the D&D team for construction of pilot and demonstration facilities.

In November, the DOE has come back with a far more detailed, sober assessment, focusing specifically on “outdoor ecological variables”, noting:

It is recognized that high biomass productivities achievable in the laboratory do not always translate to success in outdoor environments due to ecological variables such as parasites, grazers, and pathogenic bacteria. A one-acre equivalent outdoor test environment is closely tied to laboratory bench-scale research as part of an iterative process whereby the results obtained from experiments in outdoor environments are used to inform the laboratory experiments and vice versa. This continuous feedback loop is expected to expedite lessons learned before scaling to larger pilot facilities.

The DOE concludes that there is a severe divide between results in the lab and results in the large-scale pond, and writes:

The greatest impact for Algal Feedstocks R&D is in helping bridge the divide between laboratory and agricultural/industrial field operations by supporting applied research and process development. There are several components to bridging the divide, these include:
• Conducting research and development at the bench scale (approximately cultivation) and research and development integration at the 1 acre equivalent in parallel;
• Supporting replicated field trials at the smallest useful scale, approximately 1000 –10,000 liter volumes under sunlight with natural temperature fluctuations.
• Integrating 1 acre equivalent operations, (approximately 400,000 – 800,000 liter culture volumes), as the minimum scale needed to gain insight into developing integrated processes for inoculation, growth, harvest and processing algal biomass; and
• Scaling to pilot operations, at a minimum scale of 10x process development (approximately 10,000,000 liters) and at a realized acre.

The DOE warns:

Due to the cost and complexity of scale-up, these R&D activities may ultimately be handed off to the Demonstration and Deployment Technology Area for construction of pilot and demonstration-scale facilities.

ALU and AHTL

You’ll be hearing a lot more about those two acronyms. The DOE writes:

Two initial priority pathways were selected by BETO as the most promising approaches to achieving the Algal Feedstocks R&D 2022 targets: Algal lipid extraction and upgrading; Whole algae hydrothermal liquefaction and upgrading.

These analyses suggest that the highest cost to the system is biomass production; key sensitivities are productivity and lipid content, which can be represented as a single metric: biofuel intermediate yield per acre, per year. Other important areas are harvest efficiency, nutrient and water recycle, and processing efficiency, as well as capital costs of the production system.

More about ALU

DOE writes:

Algal Lipid Upgrading Pathway (ALU). The focus of the design case is to document a representative pathway model for conversion of algal carbohydrates and lipids to fuel and blendstock products, with high fractional energy yield to hydrocarbon products (e.g., renewable diesel) supplemented by additional energy yield to ethanol as a representative fermentative product from sugars—primarily to demonstrate a means to achieve a modeled minimum fuel selling price under $5/GGE by 2022.

The process described*in the eesign case uses co-current dilute-acid pretreatment of algal biomass delivered after upstream dewatering (outside the scope of this analysis) to 20 wt% solids, followed by whole-slurry fermentation of the resulting monomeric sugars to ethanol, followed by distillation and solvent extraction of the stillage to recover lipids (primarily neutral lipids with inclusion of polar lipid impurities).

The process design also includes lipid product purification, product upgrading (hydrotreating) to straight-chain paraffin blend stocks, anaerobic digestion and combined heat and power (CHP) generation, product storage, and required utilities.

The flow diagram

The modeled costs

More about AHTL

DOE writes:

The focus of the Algal Hydrothermal Liquefaction Design Case and resulting State of Technology Report is to document a pathway model for conversion of whole algae, rather than the extracted lipids, to fuel and other products. Dewatered algae (20 wt% on an ash-free basis) is pumped to the HTL reactor. Condensed phase liquefaction then takes place through the effects of time, heat and pressure.

The resulting AHTL products (oil, solid, aqueous, gas) are separated, and the AHTL oil is hydrotreated to form diesel and some naphtha-range fuels. The AHTL aqueous phase is catalytically treated to recover the carbon content and allow water recycle back to the ponds.

Process off-gas may be used to generate hydrogen, heat and/or power. A hydrogen source is included as hydrotreating is assumed to be co-located with the algae ponds and AHTL conversion. Nutrient recovery is accomplished by recycling treated water, carbon dioxide containing flue gas, and treated solids back to the algae ponds.

The flow diagram

The modeled costs

Comparing ALU and AHTL

The high cost of algae feedstock

The persistent problem, right now? That $13 per GGE cost for algae biomass — or, $1,092 per ton. Now, if you can produce for the fish feed market at those economics — with fish meal at $1500 per ton, the economics look pretty good. But the DOE and NAABB assessments to date have valued algae biomass in line with soybean meal, which prices out at less than $400 per ton, with a value estimate from the NAABB of under $300 per ton.

And, in the case of the AHTL technology, that biomass is being fully utilized anyway — and with fuels going at $400 per ton in the case of AHTL, you can see why converting all the biomass to fuels makes a lot of sense; in this analysis, it is simply worth more as fuel than as feed.

It’s an area of research that will have to be done — harmonizing algae’s biomass price prospects. Will it compete at the $300 per ton feed markets or in the $1500 per ton markets?

The Bottom Line

That $13 per GGE cost for algae is tough news for fans of algal biofuels. Tough in that it looks like a very long slog towards algae fuels. The DOE has not shifted from their overall $3.00 per gallon target, but one has to wonder how fuel-based algae ventures are going to finance themselves over the 16 years the DOE thinks it will take to get to demonstration scale with affordable fuels. Either the ventures will have to depend on government financing deep-pocketed investors who have the patience, or divert themselves on a parallel track towards a second, nearer-term business in nutraceuticals or other high-margin products while maintaining an R&D effort for algae biofuels.

There are two other possibilities. Unlikely now with low oil prices, but should international conditions deteriorate we might see an enhanced “Manhattan Project” in algae biofuels designed to shorten the timelines — possibly undertaken by an international consortium as was the approach with the International Space Station.

Possibility #2, if algae meal prices alongside fish meal instead of soymeal — as in the Cellana model, then a two-product strategy might prove just the ticket. Meal and lipid-fuels suggest the ALU pathway: we’ll see how the market prices algae biomass.