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Overcoming the Challenges in the Commercial Cultivation of Algae
Dr. George Philippidis* and Michael Welch
Patel College of Global Sustainability, USF, Tampa, FL, USA
Lawrence Walmsley and Dr. Andreas Meiser Culture Fuels Inc., New York, NY, USA
10th World Congress on Industrial Biotechnology, Montreal, Canada
June 18, 2013
Culture Fuels Inc.�
Bioproducts from Algae
2
ALGAE
Lipid Extraction
Screening & Characterization
Harvest Cultivation
Nutrients
Animal
Feed
Solvent Sunlight CO2
Hydrothermal Treatment
Water
Jet Fuel Military Fuel
Diesel
Water
• Limited availability • Pollution and carbon
• Mostly imported
• Abundantly available • Environmentally friendly • All domestic
Energy Security through Sustainability
The Potential of Algae to Revolutionize the Renewable Fuel Industry
• Works in current infrastructure (engines, pipelines)
• No car modifications (drop-in fuels)
• Absorbs CO2 during growth
• Grows in abundant seawater
• Grows in arid, non-agricultural land
Gallons of fuel per acre
High yields
Plug-in fuel Environmentally safe
• Is cost competitive
• Provides energy security
• Is CO2 neutral and minimizes use of scarce natural resources
• Is available now without significant infrastructure conversion
Palm
Soybean
Algae
Government and investors are looking for a fuel that:
High yield
Corn ethanol
2,600
60
550
380
4 Algae’s characteristics are superior to those of land plants
Land Requirements for Commercialization
Permits required
• Develop facility
• Pipe water
Location requirements
1. Large tracts (~2,000 acres/ 4 sq miles) of cheap, flat unproductive land
• Meeting 10 BGY for RFS mandate requires 6,000 sq miles (80 x 80)
2. Access to non-constrained water (pumped seawater, wastewater, aquifers, protected bays, lakes)
3. Sufficient solar illumination
4. Near CO2 source
Mississippi Delta – 400 x
20 miles = 8,000 sq miles
C. FL – 50 x 50 miles = 2,500 sq
miles
S. TX – 300 x 10 miles = 3,000 sq
miles
5
W. TX & S. NM – 100 miles x 300 miles =
30,000 sq miles
Florida Advantages • Year-round solar irradiation • Year-round warm weather • Humidity suppresses water evaporation • Water and cheap energy availability • Significant under- and un-utilized flat land • Strategic location and good infrastucture
Significant activity in the sector…
Venture capital Strategics
Government
Fund Description Company Description $100+ M invested in Sapphire Energy (Additional $200M gov’t funds)
$76 M invested in Solazyme (Nasdaq IPO in June 2011)
$70M invested in Solix BioSystems (Series C closed August 2012)
▪ JDA of $10 M with Martek since 2009
▪ $600M partnership (investment and research) in 2009 with Synthetic Genomics
▪ Partnered with Sapphire in 2011 to develop algae strains
▪ JDA with Solazyme since 2010 to develop oils for personal care
▪ $210 M cost-match program by Departments of Energy, Defense and Agriculture to develop 3 commercial-scale biorefineries in 2012
▪ $40 M cost-match program by Department of Energy for pilot- and demonstration-scale biorefineries in 2012
6
… helps the algae industry grow
7
Constructing large scale facilities • Sapphire in New Mexico • Algenol in Florida • Aurora in Australia
Company clusters emerging • Algenol - Valero • Sapphire - Monsanto - Linde
Algae fuels in use • US Navy ships and jets on algae
fuel in July 2012 Hawaii PACRIM naval exercises (committed to purchase 336 M gallons by 2018)
• Continental Airlines passenger flight in Nov. 2011
Commercialization Issues “Contamination and low biomass concentrations are disadvantages of open systems.” 1 – Prof. Wijjfels, University of Wageningen
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An economically competitive system is one that has simultaneously 1) high productivity, 2) low capital needs, and 3) low operating costs (primarily due to efficient water use)
“The consensus is for simple open or raceway ponds, but water is a significantly limiting factor.“ 2 – Gas2 magazine
"The use of closed photobioreactors (>$100+/m2) for [biodiesel production] is totally absurd.“ 4 - John Benemann
“Existing outdoor open pond technologies produce final algae fuels at production cost of $140 - $900/ barrel.” 3 - Algal Biomass Organization
1 http://www.algae.wur.nl/UK/projects/High+density+cultures+of+microalgae/ 2 http://gas2.org/2009/03/26/algae-biofuels-world-summit-wraps-up-in-san-francisco/ 3 http://www.algalbiomass.org/news/1963/algae-fuel-inches-toward-price-parity-with-oil/ 4 http://www.theoildrum.com/node/2541
Open pond
• Low investment
• Low biomass density (significant volume of water to remove)
• Medium yield
Closed photobioreactor (PBR)
• Very high investment
• High biomass density
• High yield
Principal existing technologies Key characteristics
Economical growth requires high yield at low investment cost
9
Issues with Existing Cultivation Systems
Floating Platform: A Promising Cultivation Technology (scalable and cost-effective)
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Novel Floating Platform (Algae cultivated inside)
High Biomass Density: Shallow platform depth reduces
capital and operating cost for settling and extraction
100 ft. 30 ft.
3’-5’ 2”
Low capital: Constructed of low-
cost plastic film
CO2 tubes
Contamination barriers: Closed system prevents entry of invasive
species and exit of algae
Low capital: Simple supporting body of water
Thermal control: Floating on heat sink lowers internal
temperature at low cost Settling tanks
High productivity: Due to patent-pending integrated
aeration system
Scalability: Modules can be enlarged and
set up in parallel
CO2 input
Algae
CO2
Algae
Wet Algae
No biofilm: Due to air
headspace
Concentrated Algae
Extraction and conversion
Low evaporation: Reduced by enclosure
USF - Culture Fuels Partnership in Algae Cultivation Systems
Started: August 2011
Focus: Novel engineering design to boost productivity via better mass transfer, reduced water use, and inexpensive materials of construction
Location: USF research facility (Lakeland, FL)
IP: 2 patent applications on design and operation of floating modular platform: - 1 patent filed in 2010 (USA and EU) - 1 provisional patent in preparation
Partners: Municipalities, Industry (utilities, cement, fertilizer)
Status: - Sold 4 small units in 2012 - Cultivation system operating outdoors (1.5 year) - Low cost and high productivity proven with several strains at small scale
Validation: ARPA-E funded project at ASU ranked floating system 2nd lowest cost platform
11
Distinctive Features
Capex 1
Biomass density
2
3
4
Thermal control
Scalability 5
Contamina- tion barriers
• Use of thin film, low-cost material floating on a low-cost pond
• Short light path increases density, lowers water use and lowers downstream cost for dewatering
• Enclosed structure decreases external contamination into reactor
• Salinity difference prevents freshwater algae inside reactor from escaping as surrounding water has higher salinity
• Modules are connected to each other; easy maintenance and repairs/replacement
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Description
• Sitting in heat sink lowers internal temperature at low cost (temperature remains within 1 – 20C of supporting pond all year – below 300C)
Engineering Design & Economics Good Medium Bad
Capex 1
Biomass density
2
3
Contamina- tion barriers
4
Thermal control
Scalability 5
Open ponds
USF-Culture Fuels
Tube
Photobioreactors
Vertical plate
Vertical in water
13
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Promising Productivity and Yield
Harvest
Sample of growth data using Nannochloris (outdoors in Lakeland, FL)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
0 2 4 6 8 10 12 14 16
Biom
ass d
ensity [g
/l]
Time [days]
Average productivity: 21.2 g/m2/day
Biomass density at harvest: 4.32 g/L
Module area: 27 ft2 (2.5 m2)
Floating Platform Performance
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Outdoor productivity data of semi-continous system using Nannochloris species (in g/m2/day)
Week 3/26 4/2 4/9 4/16 4/23
0
5
10
15
20
25
4/30 5/7 5/14 5/21 5/28 6/4 6/11 6/18 6/25 7/2
105-‐day run
Cost-Competitiveness based on Scale-up Projections
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Output from financial model based on specific facility design
$/ gal
0.49 0.32
0.72
0.77
0.75
2.23 (3.30)
1.97 ($70/ barrel)
Cost of fuel with floating platform Implied production cost of diesel @ $100/ barrel**
2.87
* Assumed sale price of $350/ ton ** 42 gallons per barrel and assumes 20% diesel refiner margin
*
Technology works with any algae strain
Importance of Co-Products
17
Cosmetics • Algae contain many interesting
components, as various proteins, oils, antioxidants
Nutritional supplements • Algae biomass with
existing market
Feed • Attractive fatty acid profile and high
protein content • In aquaculture potential replacement
for fish oil and fish meal
Nutraceuticals • Omega-3-fatty acids • Antioxidants
Fuels • Algae oil replaces crude oil • Refined into diesel and jet fuels
Animal Feed and Fish Meal Markets
• Global demand for protein meals is 180 M tons*
• The demand is expected to grow to 220 M tons within 10 years
• Producing 3 billion gallons of fuels would co-produce ~40 M tons, which could be absorbed
• Algae meal sold at current prices for soy meal ($350/ ton) would result in cost-competitive production of algae fuels
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• Very high prices for fish meal ($1,000+/ ton)
• Fish meal production is a consolidated industry
• Fish meal markets can absorb proteins resulting from 100 M gal fuel production**
• First interviews with 2 industry leaders confirmed interest of 1 M ton algae each
Growth in protein demand allows the production of 3 B gal. fuel
Fish meal replacement is a very attractive option for first mover
* FAO source: http://www.fao.org/docrep/007/y5019e/y5019e05.htm ** Assuming 20% can be added to current supply (ca. 6 M tons)
Demonstration Facility (1-acre)
• In Southwestern Florida • Public landfill site • On-site CO2 from power
generation that uses landfill gas
• Water availability (treated landfill leachate)
• Construction initiated with planned start of operation 1Q 2014: Ø Scale up to semi-
commercial facility (1 acre/0.4 ha)
Ø Module area: 545 ft2
(50 m2) Ø Produce commercial
products 19
200 x 200 pond
Energy plant
10 x 10 shed
Effect of Scale on Cost Competitiveness
20 Acres 2,500 50 100 5
$/ton
High
Low Fuels, cattle feed
Algae paste for aquaculture
Health foods (omega-3s)
Enriched fishmeal
Mid-Size Project: Financially Attractive
21
Description Economics • 10-acre project producing algae for
aquaculture and health foods • Produces 180 tons per year • Sold to distributors and shrimp farms • Estimated size of market is 50,000 tons
per year
• Total capital required (upstream and downstream) = $8.9M
• 50% of capital is debt-financed at 10% • Aquaculture =$100/kg, health foods = $30/kg • Expenses are CO2, nutrients, electricity and
personnel • 10 year IRR approximately 70%
Financial projections $000s
1 2 3 4 5 6 7 8 9 10Revenue 720$ 2,880$ 8,370$ 8,370$ 8,370$ 10,125$ 10,125$ 10,125$ 10,125$ 10,125$ Costs (397)$ (491)$ (872)$ (972)$ (1,272)$ (1,400)$ (1,925)$ (1,925)$ (1,925)$ (1,925)$ Operating profit 324$ 2,389$ 7,498$ 7,398$ 7,098$ 8,725$ 8,200$ 8,200$ 8,200$ 8,200$
Loan repayment (720)$ (720)$ (720)$ (720)$ (720)$ (720)$ (720)$ (720)$ (720)$ (720)$ Taxes -‐$ (501)$ (2,033)$ (2,003)$ (1,913)$ (2,401)$ (2,244)$ (2,244)$ (2,244)$ (2,244)$
Operating cash flow (397)$ 1,168$ 4,744$ 4,674$ 4,464$ 5,603$ 5,236$ 5,236$ 5,236$ 5,236$ Investment (4,425)$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ -‐$ Free Cash Flow (4,822)$ 1,168$ 4,744$ 4,674$ 4,464$ 5,603$ 5,236$ 5,236$ 5,236$ 5,236$ IRR 68%
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Contact Information George Philippidis, Ph.D. Associate Professor, Sustainable Energy Patel College of Global Sustainability University of South Florida (USF) Tampa, Florida, USA (813) 974-9333 [email protected]
