Monday, July 6, 2009

Algae Biofuel commercialization!

USA is digging deeper into biofuel as alternative future fuel and as role model in this regard. The whole of EU continent is embracing Biofuel to have more than 15% up to 30% of fuel to be biofuel making mandatory. Huge China is going biofuel from cassava, to sugar cane, canola and other related biofuel plants to control its fuel hunger. Elsewhere, From North to South and east and west had engaged in Biofuel developments and obvioulsy this trend will accumulate into major trades arround the globe. This will add billions of gallons per year increasing widespread interest and development, job creation and economic growth. The climate change threat and fuel reserves depletion are driving biofuel devlopment to newer heiths yearly.

One billion gallons by 2014: algal fuel price, capacity projections
Algae production facility (PetroAlgae plant in Fellsmere, Florida)
Biofuels Digest is projecting that algal biofuels capacity will reach 1 billion gallons by 2014, based on analysis of price and capacity projections for 2009-14 from leading companies in the field.

Algae producers are targeting to reach a $1.30 wholesale cost and 1.62 billion gallons in capacity by 2014.

Costs are based on the lowest cost provider - not an average for all providers. Sources are Biofuels Digest reports and interviews on PetroAlgae, Algenol, Solazyme, Aurora Biofuels, Sapphire Energy, PetroSun and Solix (among more than 30 algae biofuels companies whose progress towards commercialization was reviewed) , and a study prepared on algae feasibility for the Louisiana Economic Development. Production forecasts are based on interpretation of guidance from each company on forward production as well as public statements.

“The $9-$30 cost ranges cited in the latest research reflect today’s prices,” said Biofuels Digest editor Jim Lane. “That’s already competitive in some nutraceutical and food markets - for example, a pound of olive oil retails for around $17 at my store, or about $120 per gallon. But like the computer market - costs are expected to come down quickly.”

Readers expressed some confusion over the differing reports on price and capacity from research organizations, as well as public statements by algae biofuel producers regarding forward price and capacity. The prices expressed are wholesale, rather than retail.

Algal Fuel/Capacity projections, 2009-14

39 percent of 2014 capacity is expected to be built in the US, and 61 percent in other countries. 33 percent of 2014 capacity is projected to use a closed system, photobioreactor (PBR) process, with 67 percent using open pond “raceway” systems.

In 2012, 22 percent of projected capacity would utilize the closed PBR process, and 78 percent would utilize open ponds. 41 percent of capacity by 2012 is projected to be in the US. Algae biomass yields are projected in the 24-53 tons per acre per year for open pond systems.

This blog has focused on Algae as alternative. Below is an extract from biofuel digest on biofuel.

Of all the hydrocarbons that can be made from biomass or recovered from fossil reserves," begins today's Special Report: A Biofuels Commercialization Outlook, "gasoline, diesel and natural gas remain the most important end-products and are likely to remain so for some time to come. Into that mix comes the advent of biofuels, and in recent years the arrival of what are variously termed "second-generation" or advanced biofuels.

Though markets for intermediates and fuels such as methanol, propylene and ethylene are considerable, range into the billions, as high as $25 billion in the case of propylene, the market for gasoline is measured in trillions of dollars, not billions.

According to the Energy Information Administration, global liquid fuel consumption in 2008 was 85.43 million barrels a day at a US refiner averaged cost of $94.68 per barrel, or $2.95 trillion.

The biofuels market today is small - no more than $40 billion, or less than two percent of the total liquid fuels market, and not much more than the market for ethyl propylene. Talk about biofuels is all out of proportion to its market size.

Biofuels have four basic economic drivers: energy independence, climate change remediation, economic development, hedging, and the search for fuels that are lower in cost or in price volatility.

These are linked. As US House Speaker Nancy Pelosi said in urging her colleagues to pass the climate change bill: "remember these four words for what this legislation means: jobs, jobs, jobs, and jobs." Pass it they did.

Algae Movers and Shakers: a Special Digest Report:

The Algal Biomass Organization. More than 600 people attended the last annual ABO summit, and up to 1000 are expected at this year's meeting in San Diego in October, bringing together many of the best-known phycologists, producers as well as high-visibility end-users including numerous airlines. More at

AlgaeVenture Systems. AlgaeVenture Systems leaped into the public eye earlier this year with a dewatering solution that it said could reduce the cost of dewatering by as much as 98 percent compared to centrifuging. Digest sources confirmed that the company has at least one commercial agreement in place with an early-stage algal fuel developer. The company's process takes water out of algae instead of algae out of water. More at

Algenol. Algenol has been in the news heavily in the past week, with reaction to their announced partnership with Dow Chemical. Most reaction has been positive; some continues to be skeptical. Dow Chemical announced that it will partner with Algenol Fuels to build and operate a 24-acre Texas-based algae biorefinery demonstration farm that will produce ethanol at a target cost of $1 per gallon. More at

Aquatic Energy. Low-cost leader Aquatic Energy first came to wider attention this spring when unveiling details of its demo stage project as well as sharing data from its first-gen efforts with an open-pod algal biomass pilot. The company said at the time it is preparing to expand from a "couple of acre" pilot in Lake Charles, to an 30-acre demonstration project that will feature the company's 1-acre open-pond system that is yielding 2500 gallons per acre without using an external CO2 source. More at

Aurora Biofuels. Aurora leapt into the news this spring with a projected $1.30 cost for algae in its second-generation technology, due in 2013. The company completed an 18-month pilot earlier this year, and the company's VC backer Jim Long of Gabriel Venture Partners recently told a group of biofuels execs at Biofuels: Science and Innovation that algae was "the focus" at GVP as far as biofuels. More at

CAAFI. The Commercial Aviation Alternative Fuels Initiative doesn't get as much publicity as other organizations, but it's well worth following. Last October, the CAAFI environmental team established a lifecycle emissions framework for jet biofuels, and CAAFI provided business and economics teams in support of a 46-company meeting at the Department of Commerce last September, including both end-users and producers. More at

The National Algae Association. The NAA evokes passion among its membership of algae innovators, which includes both end-users and producers and ranges from pre-seed start-ups through to high-visibility companies such as Sapphire Energy and the Air Transport Association. The Association holds popular quarterly meetings in Houston. More at

OriginOil. One of the shocker industry announcements this spring came from OriginOil, in revealing a one-step process for algae dewatering and oil extraction. Last month, the company said that it had filed a Patent Cooperation Treaty application for a system that provides efficient light utilization with comparatively low energy cost in algae photobioreactors. More at

PetroAlgae. PetroAlgae was most recently in the news with expansion of their international sales staff to 28 people. Licensing commenced earlier this spring with an Asian deal focused on China and part of southern Japan. The company's model farm is 12,500 acres and produces 60 Mgy of fuel and as much or more value in proteins, according to company execs. In all, PetroAlgae added nine representatives in North America, South America, Europe, Asia, and the Middle East. More at

Sapphire Energy. Sapphire gained instant attention when it raised a stunning $100 million, and participated in the initial algae-based jet test with Continental last December. The combination were factors in propelling Sapphire to a #2 ranking in last December's 50 Hottest Companies in Bioenergy list. The company has been fine tuning its process in recent months, while increasing the pace of its commercialization schedule. The company has indicated it will be at 1 Mgy in production by 2011 and 100 Mgy by 2018. More at

Seambiotic. The main attraction in terms of algal fuel development outside of the US, Seambiotic, a global leader in the development and production of marine microalgae for the nutraceutical and biofuel industries, reappeared in the headlines this past month via an agreement with NASA Glenn Research Center to develop an on-going collaborative R&D program for optimization of open-pond microalgae growth processes. More at

Solazyme. Solazyme's been on a strong run throughout 2008 and 2009, recently announcing that it closed a $57 million third round of funding. $45 million of the round had previously been announced. Funds were invested by Braemar Energy Ventures, Lightspeed Venture Partners, VantagePoint, Roda Group, Harris & Harris and Solazyme chairman Jerry Fiddler. More at

Solix Biofuels. After a quiet start to the year, closed system photobioreactor pioneer Solix Biofuels completed its $16.8 million Series A capital funding that added Shanghai Alliance Investment to its group. Proceeds will be used to finance construction and commencement of operations at the company's Coyote Gulch Demonstration Facility, which will be operational by late summer 2009. I2BF Venture Capital, Bohemian Investments, Southern Ute Alternative Energy LLC, Valero Energy Corp., and Infield Capital also invested in this round. More at

The US Defense establishment. The Air Force, Navy, DARPA and the Defense Department have all been sponsoring projects or looking at algal fuel acquisition. DOD has two projects - one led by General Atomics and the other by SAIC, which have a goal of producing $3 fuel. Most recently, the US Navy's Mid Atlantic Coast section said it is looking to put out RFPs for 30-year contracts to produce biomass and/or fuel on Navy property.