Phycal: Biofuels Digest’s 5-Minute Guide

November 26, 2012 | Jim Lane

Address: 51 Alpha Park, Highland Heights, OH 44143

Year founded: 2007

Type of technology:

Phycal is developing an integrated production system based on its patent pending technologies for growing algae and extracting energy products, primarily algal oil. Phycal is focused on delivering energy products at a market-competitive price. Algal oil can be converted into biodiesel, or refined into renewable, drop-in replacements for diesel, jet fuel, and feedstock for other energy products.

Phycal’s core technologies include:

1. Olexal Non-destructive extraction (“milking”) of oil from algae.

Phycal’s patent-pending non-destructive extraction process, Olexal, milks the oil from algae while maintaining their viability. The “milked” algae are recycled to the ponds to grow more oil. Olexal requires no dewatering, kills competitors and contaminants, and increases both biomass productivity and lipid accumulation.

2. Heteroboost, a hybrid 2-stage phototrophic (sunlight & CO₂) and heterotrophic (fixed carbon) system for optimum economic yield of oil from algae.

Phycal’s production system also deploys the patent-pending Heteroboost technology. It starts with a phototrophic first stage to grow biomass and lipid to optimum levels with sunlight and CO₂ and then moves algae to a heterotrophic second stage which provides fixed carbon (e.g. inedible sugar) to the algae that quickly and dramatically boosts oil and biomass. This hybrid system synergistically combines the benefits of what is achievable through purely phototrophic or heterotrophic growth.

Fuel Type:

Phycal produces commodity energy products from algae, primarily algal oil, as a feedstock for partners who will convert Phycal’s algal oil to renewable diesel, biodiesel, renewable jet fuel, and renewable naphtha.

Major investors:

Logos Energy, Inc.

Past milestones:

1. In June 2008, the company opened their subpilot-scale plant. This subpilot was built to scale-up all unit operations from laboratory-scale to the next technology readiness level. At the subpilot technology readiness level, the goal is to scale-up, develop, and integrate all unit processes into a continuous system in a relevant environment.

This is the last level necessary before implementation at the pilot/demonstration level. To achieve this, Phycal has to date installed and developed: outdoor ponds, 3 prototype iterations on Olexal® non-destructive extraction unit, 2 prototype iterations on Heteroboost™ hybrid growth system, a low-cost primary dewatering process, an aqueous extraction process, a water treatment process, a distillation process, and process logic controls. Phycal submitted multiple patent applications as a result of this subpilot development. In October 2009, Phycal constructed the first pilot-scale skid-mounted Olexal and Heteroboost units for shakedown and preparation for pilot installation.

2. In June 2008, the company completed a preliminary design and executed a lease for a 30+ acre pilot site in Hawaii. This pilot will be capable of 100,000+ gallons of algal oil per year. As part of the pilot, the State of Hawaii has committed cost share. Collaboration was secured with potential customer and customer’s customer.

3. In September 2009, the company delivered algal oil under an Air Force contract.

Future milestones:

1. Raise funds for pilot plant and operations in Hawaii with combination of federal and state awards and venture capital.

2. Construction, commissioning, and commencement of pilot plant operations in Hawaii.

3. Verify that pilot plant operating parameters meet cost model assumptions for $4/gal algal oil.

Business model:

Phycal will partially own and operate project-financed commercial algal oil production facilities. The company may also choose to license unit processes.

Fuel cost:

Target cost for first commercial facility in Hawaii is $4 per gallon of algal oil by 2016 with natural algae, without an operating subsidy, and including an adequate return to capital. Rollout of follow-on farms in contiguous U.S. will drive to $1-2 per gallon with transgenic algae and continuous improvement.

Competitive edge:

Phycal’s primary differentiators and competitive edge are from the access and development of breakthrough technology and a culture of execution. Both the Olexal® non-destructive extraction technology and Heteroboost growth system fundamentally change the production of algal oil. See their value propositions in tables below. The tremendous advantages of Olexal and Heteroboost can only be realized if successfully executed. Phycal has built an execution culture based on the integration of scientists and engineers.

Working together provides broad perspectives where the biology and system-wide implications are understood so that knowledge is deployed quickly.

Table 1 – Value Proposition of Olexal

Direct Advantages	Indirect Advantages	Commercial Advantages (i.e. How Olexal reduces CapEx and OpEx)
The recycling of viable algae back to ponds after lipid milking to grow more lipids	Decouples production of oil from production of biomass (i.e., do not need to grow more biomass to grow more oil) Energy, nutrients, and CO₂ go more directly to oil production instead of algal cell production Allows continuous algal oil production instead of traditional batch processing which reduces inoculum and grow-up space and time Oil extraction can begin in inoculum ponds thus converting into active area Increases overall system efficiency and benefits energy balance	Reduced nutrient supply chain and pumping of CO₂ Reduced land requirement and greater percentage of land is active area
Eliminates or reduces dewatering	Reduces system complexity Reduced dewatering chemicals that must be handled up- and downstream	Eliminates or reduces costs of an entire unit process
The removal of chemical algal growth inhibitors (i.e. algal waste)	Algae cannot signal to each other that they are too “crowded” Higher culture densities Increased both biomass and lipid productivity.	Higher return to capital for ponds Reduced land requirement
The reduction or elimination of algal predators and competitors	Dramatically reduces risk of culture crash Extends open pond production for many weeks instead of a few days Decreases amount of inoculum Reduces both scheduled and unscheduled downtime Increases Overall Equipment Effectiveness (OEE)	Reduced land requirement because of reduced inoculum Higher return to capital for ponds
Extracts only non-polar lipids and not impurities (e.g. chlorophyll, gums, phospholipids)	Higher quality product Reduces purification burden	Lower purification costs

Table 2 – Technical Value Proposition of Heteroboost Technology

Direct Advantages	Indirect Advantages	Commercial Advantages (i.e. How Heteroboost reduces CapEx and OpEx)
The use of phototrophically grown biomass as a feedstock to rapidly produce additional lipid and biomass heterotrophically	Decouples production of oil from phototrophic production of biomass (i.e., do not need to grow more biomass to grow more oil) Fixed carbon provided goes more directly to oil production instead of algal cell production Increased both biomass and lipid productivity Increases overall system efficiency and benefits energy balance	Reduced land requirement and greater percentage of land is active area Increased oil production from fixed set of biomass
Modify the lipid profile of the algal strain by metabolism shift	Algae appear to use different metabolic pathways for lipid production under heterotrophic growth allowing selection of different lipid end products Different carbon sources provide different end products	Higher value lipid product of better product specifications for customer satisfaction Flexibility in the production system to tailor end products to customer use
Ability to use fixed carbon from inexpensive sources such as lignocellulosic industry	Take advantage of the rapidly developing lignocellulosic industry as it develops sugars targeted to ethanol production Offer an alternative fuel for producers of lignocellulosic derived sugars to ethanol that is more energy dense (and a direct drop in for current fuels). Potentially provide more bang for the buck from lignocellulosic sugars as they are shuttled via respiratory metabolism to useful end products (vs. fermentative pathways for ethanol).	Lower cost fixed carbon sources Provide flexibility to lignocellulosic sugar producers.

Stage:

Pilot, producing up to 100,000+ gallons of algal oil per year.

Website URL.

www.phycal.com

Category: 5-Minute Guide

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Phycal: Biofuels Digest’s 5-Minute Guide

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