Algae What will it take? Vinod Khosla Khosla Ventures October 2008

Transcription

1 Algae What will it take? Vinod Khosla Khosla Ventures October

2 agenda The Innovation Handbook Key Criteria Black Swans 2

3 not your niche markets anymore! Main Tech The Markets You Think Of Engines ($200B) Corn Ethanol Lighting ($80B - US) Biodiesel Appliances ($10 sb+) Solar PV Batteries + Flow Cells ($50B+) Wind Geothermal Cement ($100B+) Water ($500B+) Glass ($40B) Home Building (!!!) BioPlastics ($10 sb+) Gasoline ($500B+) Diesel ($500B+) Jet Fuel ($100B+) Power Generation ($250B US) Solar Thermal EGS Clean Coal New Nukes 3

4 relevant cost relevant scale relevant adoption 4

5 the chindia test only scalable if competitive unsubsidized 5

6 1990: Chindia 13% of CO 2 emissions 2005: Chindia 23% of CO 2 emissions 2030: Chindia 34% of CO 2 emissions EIA 6

7 the scaling model brute force or exponential, distributed 7

8 the adoption risk financial, consumer acceptance, market entry 8

9 relevant scale solutions for oil coal materials efficiency 9

10 Khosla Ventures rules of investing Attack manageable but material problems Technology that achieves unsubsidized competitiveness Technology that scales - if it isn t cheaper it doesn t scale Manageable startup costs & short innovation cycles Declining cost with scale trajectory matters 10

11 technology expands the Art of the Possible to predict the future, invent it! today s unimaginable is tomorrow s conventional wisdom 11

12 agenda The Innovation Handbook Key Criteria Black Swans 12

13 key criteria Trajectory: What is or What Can Be Scalability Trajectory Cost Trajectory 13

14 Natural Oils trajectory: scalability Transesterification Methanol/Ethanol Fermentation Glycerin BioDiesel (FAME or FAEE) Ethanol, Butanol, Renewable Petroleum FermDiesel Sugars/ Starch Feed Cost Catalytic Conversion Catalysis and Aqueous phase Reforming ETG via catalysis Biogasoline Dimethylfuran Gasoline, Diesel, Hydrocarbons Algae + Sunlight CO2 Cell Mass Hydrocracking BioDiesel (FAME or FAEE) Cellulose/ Hemicellulose Acid or Enzyme Hydrolysis Saccharification Fermentation Ethanol Butanol Diesel Biomass Waste Mixalco Process Pyrolisis Microbial cultures Gasification Syngas Feedstock Supply Volume Fermentation Catalytic Conversion Fischer-Tropspch catalysis Mixed Higher Alcohol Biooil Methane Ethanol/Butanol Ethanol Increasing Technological Difficulty BTL Diesel

15 trajectory: scalability Gallons oil / acre / year NREL 15

16 trajectory: scalability Gallons oil / acre / year ~440 Year round average 7g/m2/day Warning: Extrapolated from small sample Ulva 16

17 trajectory: scalability Gallons oil / acre / year ~1600 Year round average 16 g/m2/day Warning: Extrapolated from small sample Confidential microalgae 17

18 trajectory: scalability Gallons oil / acre / year ~3100 Year round average 30 g/m2/day Warning: Extrapolated from small sample microalgae 18

19 trajectory: scalability Theoretical gallons oil / acre / year ~ day average 61 g/m2/day Warning: Extrapolated from small sample Kitto et al 1999 Skeletonema costatum 19

20 trajectory: scalability Theoretical MAXIMUM Gallons oil / acre / year 7.2 GJ US Southwest solar energy x 90% Reaches algae x 45% Photosynthetic active radiation x 90% Photons absorbed by PS pigments x 22% Photosynthetic efficiency x 25% Post light saturation and photinhibition x 85% Post 20 Gj/mt biomass, 60 mt/ha-yr, 30% oil ~ 2,000-6,000* gallons oil / acre / year * Maybe 2-3x (2,000 gallons oil / acre / year) with genetically improved algae J Benemann 20

21 trajectory: cellulosic scalability Miscanthus 17 tons / acre Ethanol gallons / acre / year Oil gallons / acre / year 21 Source: Ceres Inc

22 trajectory: cellulosic scalability Sorghum 25 tons / acre Ethanol gallons / acre / year Oil gallons / acre / year (Prof. Holtzapple- Texas A&M) 22

23 trajectory: yields Oil Oil Ethanol Ethanol Algae Miscanthus Sorgum Today 5+ years Theoretical 23 Miles driven / acre / year 50, , ,000

24 biocrude replaces crude Crude oil Refinery Biocrude 24

25 Kior: Millions of years Minutes! 50 Biomass Oxygen(wt%) Catalytic Cracking (BCC in minutes) Thermal Cracking (Pyrolysis seconds) Geo Thermal Conversion (Million of years) 0 0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0 90,0 TAN (mgkoh/g) 25

26 key criteria Trajectory: What is or What Can Be Scalability Trajectory Cost Trajectory 26

27 trajectory: fertilizer costs Little fertilizer Vs. Source: Ceres Inc 27

28 trajectory: harvesting costs 28

29 trajectory: harvesting costs Vs. x 100?? Source: Seambiotic centrifuge 29

30 trajectory: containment cost Source: Solix 30

31 trajectory: containment costs Vs. Source: University of MN 31

32 trajectory: containment costs Vs. Source: AlgaeLink 32

33 trajectory: containment costs Vs. Source: Valcent 33

34 trajectory: containment costs Vs. Source: Live fuels 34

35 trajectory: containment costs Vs. Source: Algenol 35

36 trajectory: containment costs Vs. 36

37 trajectory: energy costs Source: Seambiotic 37

38 trajectory: energy costs Vs. Pumps & Paddles 38

39 trajectory: energy costs Vs. Source: Helix BioReactor (Origin Oil) Light 39

40 trajectory: other cost reduction strategies Co-products like fish or animal feed Fertilizer from human or industrial waste 40

41 trajectory: costs Algae Miscanthus Sorgum Theoretical 41 $ / Gasoline Equivalent Gallon $0 $2 $4 $6 $8

42 agenda The Innovation Handbook Key Criteria Black Swans 42

43 black swan solutions? Black Swans events are: Outliers: outside realm of traditional expectations Material: make significant, game-changing impact Technology Justifiable: not shocks predicted, but are justified classic on ex-post Black basis Swans! Strategy: More at bats ; shots on goal rarity, extreme impact, and retrospective (though not prospective) predictability 43 Source: Nassim Nicholas Taleb, author of The Black Swan

44 Black swan algae idea Source: 44

45 Black Swan? Algenol? Source: Algenol 45

46 Black Swan? Sapphire Energy Source: Sapphire Energy 46

47 Black swan algae idea Source: 47

48 or get to work khoslaventures.com/resources.html 48