Overcoming the Challenges in the Commercial Cultivation of Algae

Transcription

1 Culture Fuels Inc. 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 10 th World Congress on Industrial Biotechnology, Montreal, Canada June 18, 2013

2 Bioproducts from Algae ALGAE Sunlight CO 2 Solvent Animal Screening & Characterization Cultivation Harvest Lipid Extraction Feed Water Nutrients Water Hydrothermal Treatment Jet Fuel Military Fuel Diesel 2

3 Energy Security through Sustainability Limited availability Pollution and carbon Mostly imported Abundantly available Environmentally friendly All domestic

4 The Potential of Algae to Revolutionize the Renewable Fuel Industry Government and investors are looking for a fuel that: High yield yields Gallons of fuel per acre Algae Is cost competitive Provides energy security Is CO2 neutral and minimizes use of scarce natural resources Is available now without significant infrastructure conversion Soybean 2, Palm Corn ethanol Environmentally safe Absorbs CO2 during growth Grows in abundant seawater Grows in arid, nonagricultural land Plug-in fuel Works in current infrastructure (engines, pipelines) No car modifications (drop-in fuels) Algae s characteristics are superior to those of land plants 4

5 Land Requirements for Commercialization 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 CO 2 source Permits required Develop facility Pipe water W. TX & S. NM 100 miles x 300 miles = 30,000 sq miles Mississippi Delta 400 x 20 miles = 8,000 sq miles S. TX 300 x 10 miles = 3,000 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 C. FL 50 x 50 miles = 2,500 sq miles 5

6 Significant activity in the sector Venture capital Strategics Fund Description Company Description $100+ M invested in Sapphire Energy (Additional $200M gov t funds) $70M invested in Solix BioSystems (Series C closed August 2012) $76 M invested in Solazyme (Nasdaq IPO in June 2011) JDA of $10 M with Martek since 2009 Partnered with Sapphire in 2011 to develop algae strains $600M partnership (investment and research) in 2009 with Synthetic Genomics JDA with Solazyme since 2010 to develop oils for personal care Government $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

7 helps the algae industry grow 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 Constructing large scale facilities Sapphire in New Mexico Algenol in Florida Aurora in Australia Company clusters emerging Algenol - Valero Sapphire - Monsanto - Linde 7

8 Commercialization Issues Contamination and low biomass concentrations are disadvantages of open systems. 1 Prof. Wijjfels, University of Wageningen The consensus is for simple open or raceway ponds, but water is a significantly limiting factor. 2 Gas2 magazine Existing outdoor open pond technologies produce final algae fuels at production cost of $140 - $900/ barrel. 3 - Algal Biomass Organization "The use of closed photobioreactors (> $100+/m2) for [biodiesel production] is totally absurd. 4 - John Benemann 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)

9 Issues with Existing Cultivation Systems Principal existing technologies Key characteristics 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 Economical growth requires high yield at low investment cost 9

10 Floating Platform: A Promising Cultivation Technology (scalable and cost-effective) Contamination barriers: Closed system prevents entry of invasive species and exit of algae No biofilm: Due to air headspace High productivity: Due to patent-pending integrated aeration system Algae 30 ft. Low evaporation: Reduced by enclosure 100 ft. Low capital: Constructed of lowcost plastic film CO 2 input CO CO2 tubes Algae Novel Floating Platform (Algae cultivated inside) 2 Low capital: Simple supporting body of water Thermal control: Floating on heat sink lowers internal temperature at low cost Scalability: Modules can be enlarged and set up in parallel Wet Algae Settling tanks Concentrated Algae High Biomass Density: Shallow platform depth reduces capital and operating cost for settling and extraction Extraction and conversion 10

11 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 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

12 Distinctive Features 1 Capex Description Use of thin film, low-cost material floating on a low-cost pond Biomass density Thermal control Contamination barriers Scalability Short light path increases density, lowers water use and lowers downstream cost for dewatering Sitting in heat sink lowers internal temperature at low cost (temperature remains within C of supporting pond all year below 30 0 C) 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 12

13 Engineering Design & Economics Photobioreactors Good Medium Bad USF-Culture Fuels Open ponds Tube Vertical plate Vertical in water 1 Capex 2 Biomass density 3 Thermal control 4 Contamination barriers 5 Scalability 13

14 Promising Productivity and Yield Sample of growth data using Nannochloris (outdoors in Lakeland, FL) Biomass density [g/l] Harvest Average productivity: 21.2 g/m 2 /day Biomass density at harvest: 4.32 g/l Module area: 27 ft 2 (2.5 m 2 ) Time [days] 14

15 Floating Platform Performance 25 Outdoor productivity data of semi-continous system using Nannochloris species (in g/m 2 /day) 105- day run /26 4/2 4/9 4/16 4/23 4/30 5/7 5/14 5/21 5/28 6/4 6/11 6/18 6/25 7/2 Week 15

16 Cost-Competitiveness based on Scale-up Projections $/ gal Technology works with any algae strain Cost of fuel with floating platform 2.23 (3.30) Implied production cost of $100/ barrel** ($70/ barrel) * Assumed sale price of $350/ ton ** 42 gallons per barrel and assumes 20% diesel refiner margin * Output from financial model based on specific facility design 16

17 Importance of Co-Products Cosmetics Algae contain many interesting components, as various proteins, oils, antioxidants Fuels Algae oil replaces crude oil Refined into diesel and jet fuels Nutritional supplements Algae biomass with existing market Nutraceuticals Omega-3-fatty acids Antioxidants Feed Attractive fatty acid profile and high protein content In aquaculture potential replacement for fish oil and fish meal 17

18 Animal Feed and Fish Meal Markets Growth in protein demand allows the production of 3 B gal. fuel 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 Fish meal replacement is a very attractive option for first mover 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 * FAO source: ** Assuming 20% can be added to current supply (ca. 6 M tons) 18

19 Demonstration Facility (1-acre) Energy plant 200 x 200 pond 10 x 10 shed In Southwestern Florida Public landfill site On-site CO 2 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 semicommercial facility (1 acre/0.4 ha) Ø Module area: 545 ft 2 (50 m 2 ) Ø Produce commercial products 19

20 Effect of Scale on Cost Competitiveness High $/ton Algae paste for aquaculture Health foods (omega-3s) Enriched fishmeal Low Fuels, cattle feed Acres 2,500 20

21 Mid-Size Project: Financially Attractive Description 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 Economics 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 CO 2, nutrients, electricity and personnel 10 year IRR approximately 70% Financial projections $000s Revenue $ 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% 21

22 Contact Information George Philippidis, Ph.D. Associate Professor, Sustainable Energy Patel College of Global Sustainability University of South Florida (USF) Tampa, Florida, USA (813)