Viewing posts tagged "Feedstock"

Eric Wesoff | April 6, 2009 at 6:55 AM 3 Comments

Algae Biodiesel Pt. 2: It’s the Co-Products, Stupid

“It’s the co-products, stupid.� -- Riggs Eckelberry of OriginOil A wave of algae biodiesel firms and and an accompanying amount of hype have surfaced recently.  Some firms are making outlandish claims about the volume of algae they can produce from an acre of land.  They'll be hoisted with their own petard soon enough. There are many pieces to the algae puzzle that seem like afterthoughts, but are actually crucial to the economics -- co-products, nutrients, harvesting, drying, and conversion technology. System design and algae strain (which seem to be the focus of most discussions) are important, but not the only components. Co-generation, co-location, and co-products are a critical aspect to an economically scalable and sustainable business model. Algae producers must look for synergies with other industries and products and provide higher value services, food and chemicals, and then transition to fuel. High-Value Co-Products Fertilizers Animal Feeds -- Lipinated algae meal for animal feed High-Value Foods and Food Ingredients Nutraceuticals ($20,000 per ton versus fuels at $100 per ton) Bio-Plastics High-Value Services Biomass/Process Waste Heat for Generating Electricity CO2 Mitigation Wastewater Mitigation

The diagram here shows the potential inputs and outputs of an algae farm (from Proteus).

XL Renewables’ business plan might serve as the model for the nascent algae fuel market.  The company co-locates algae production near a dairy farm and a biorefinery, using algal co-products to supplement livestock feed and using dairy waste products and algal biomass to feed the power plant. Algae farmers will best be served by siting near a waste water facility or other synergistic partner According to an algae investor and entrepreneur colleague, “It's not about the oil for algae, it's about the carcasses of algae. The oil is the leftovers.  Margins on JP4 from algae oil could be $0.25 on $2.25. But all those bodies from the dead little algae to make the oil is worth $1,000/ton with a cost of $600.�

• This is a small excerpt from the April issue of the Greentech Innovations Report which dives deep into the algae pond.  You can subscribe to it here.

Eric Wesoff | April 2, 2009 at 8:02 PM 1 Comment

Slimed, Pt. 1: Biofuels and the Aquatic Species Program

Scores of firms, startups and Fortune 500 companies alike, are working on algae-based biofuels.  Hundreds of millions of dollars have been invested.  And so far, maybe a few thousand gallons of algae oil have been produced. The question is: Can algae be economically cultivated and commercially scaled to make a material contribution to mankind’s liquid fuel needs?  The jury is still out. Ghosts of NREL Algae Programs Past The basement of the marine biology department at the University of Hawaii has a hallway lit by a dim incandescent bulb.  At the end of the hallway is a cardboard sign with the faded letters “ASP�? written on it.  A creaky door leads to a dank-smelling room crowded with beakers and algae scientists, milling aimlessly.  They share the same slightly green tinge and defeated look. This is the last remains of the Aquatic Species Program or ASP. These letters are spoken in hushed reverence by today’s crop of phycologists, NRELians and algae-fuel entrepreneurs. The Program identified hundreds of algae species that could potentially be farmed and cultivated for their lipids -- lipids that could be converted to biodiesel and used to wean the U.S. from its dependence on foreign oil. The Aquatic Species Program was launched in 1978 by president Jimmy Carter to explore the potential of algae as an energy source. About $25 million was put into the program until it was shelved by the Clinton administration in 1996.  They never found the "lipid trigger." The echoes of that program reverberate in today’s algae fuel renaissance. Why Algae? On paper, algae is perhaps the perfect feedstock for biofuels. It grows in a wide variety of climates. It can be used to mitigate carbon dioxide. The liquid fuels produced by these single-celled creatures are only one of their byproducts, and potentially not even the most valuable. Cosmetic supplements, nutraceuticals, pet food additives, animal feed, and specialty oils for human consumption may well fetch higher per-gallon prices. The tantalizing quality of algae is that some algal species contain up to 40 percent lipids by weight.  And therefore, according to some sources, an acre of algae could yield 5,000 to 10,000 gallons of oil a year, making algae far more productive than soy (50 gallons per acre), rapeseed (110 to 145 gallons), mustard (140 gallons) jatropha (175 gallons) palm (650 gallons) or cellulosic ethanol from poplars (2,700 gallons). More optimistic data from less informed people indicate the theoretical biodiesel yield from microalgae is in the range of 11,000 to 20,000 gallons per acre per year. But according to Dr. John Benemann, a cantankerous algae consultant whose research is widely cited in the field, the realistic potential production level (despite claims to the contrary) is about 2,000 gallons of algal oil per acre per year. VCs and Algae Farmers “VCs cannot come in here and just harvest ripened fruit, this is not shovel ready technology,�? said  Dr. John Benneman. Considering the immense technical risks and daunting capital costs of building an algae company, it doesn’t seem like a reasonable venture capital play.  And most if not all of the VCs I’ve spoken with categorize these investments as the longer-term, long-shot bets in their portfolio.  But given the size of the liquid fuels market, measured in trillions of dollars, not the customary billions of dollars, it makes some sense to take the low-percentage shot. These firms are going to continue to need capital.  According to Jennifer Fonstad of VC investor, Draper Fisher Jurvetson: “The current strategy of many of these companies has been to turn to the government stimulus plan – this is the risk capital we can rely on today.�? A Few Conclusions We need lots more time and more money Technologists tend to overestimate what can be accomplished in two years and underestimate what can be accomplished in ten to twenty years.  Algae as biofuel looks more like a ten to twenty year project.   DARPA is betting on three to five years, VCs are betting on three to five years, the algae roadmap from DOE takes a decade. The scope of the algae to large-scale biodiesel effort is more along the lines of the Manhattan Project or the Apollo moon shot, which cost $24 billion and $360 billion respectively.  A $25 million Aquatic Species Program or $300 million in venture capital is not going to get it done.  It will take tens of billions of dollars and decades. All of the process steps need to be addressed In the words of Courtney McColgan of DFJ, "There are many pieces to the algae puzzle that seem like afterthoughts, but are actually crucial to the economics -- co-products, nutrients, harvesting, drying, and conversion technology. System design and algae strain (which seem to be the focus of most discussions) are important, but not the only components." Algae producers admit that there’s a massive difference between growing large, consistent quantities of algae versus growing it on a fish tank wall. Standards for growth, strain selection, breeding, genetic modification, water extraction, oil extraction, and oil refining have yet to be established. Set realistic expectations for the technology Exploit near term, intermediate technology deployment opportunities such as wastewater treatment. Cost constraints restrict consideration to the simplest possible devices, which are large unlined, open, mixed raceway ponds. And finally a word from our favorite curmudgeon… "Engineering studies do not conclude that we can or will actually be able to produce algal oil/biodiesel. They conclude that the R&D to develop such processes can be justified, at least until it can be demonstrated to be impossible," said Dr. John Benemann.

• This is a small excerpt from the April issue of the Greentech Innovations Report which dives deep into the algae pond.  You can subscribe to it here.

Michael Kanellos | December 16, 2008 at 5:33 AM

Dell Cutting Out 20 Million Pounds of Packaging Materials

It’s plastic for paper at Dell.

The Round Rock, Texas-based computer company said today that it will eliminate about 10 percent of the packaging materials that come with its PCs and laptops and will increase the amount that can be recycled. Over the next four years, this could eliminate 20 million pounds of corrugated cardboard and other annoying crud.

In the place of cardboard, Dell will employ air bags made from high-density polyethelene, and a good portion of that plastic will come from recycled milk jugs and laundry bottles.

Dell, of course, is a massive consumer of packaging materials. I once knew a stock analyst who used to have a source at the company that sold cardboard boxes to Dell. He’d estimate Dell’s quarterly shipments by the amount of cardboard the company bought. Thus, the switch to plastic is a shot in the arm for recyclers. An estimated 33 million milk jugs will get reincarnated into computer packaging next year, the company said.

Michael Kanellos | November 5, 2008 at 9:07 AM

The Price to Watch in Oil—$40 a Barrel

Oil prices are wallowing in the $65 a barrel territory these days, less than half the level crude hit this summer. It even dipped below $60 briefly. But the real number to think about is $40 a barrel, a former oil exec turned investor told me.

Why? Well, $40 a barrel is the level that many Middle Eastern OPEC nations need to achieve to continue to fund their somewhat lavish public works and social programs, the exec estimated. Dubai, Abu Dhabi, Saudi Arabia and Kuwait aren’t cheap countries to run. The economic explosion in the past few years has caused a building boom in Dubai, which in turn has meant more public works projects. Some of the newest, smoothest pavement in the world can be found there.

Many countries also offer massive incentives to U.S., European and Asian institutions to install offices and facilities there. In Dubai, for instance, chip companies can qualify for tax holidays that last 50 years. Texas A&M, Cornell, Northwestern, Georgetown and Carnegie-Mellon have all opened satellite campuses in Qatar while NYU and MIT are opening campuses in Abu Dhabi. Building a school out of scratch isn’t easy. The hospital associated with Cornell’s medical school has an endowment in the billions.

Citizens often tend to expect cushy, well-paying jobs from their home governments. Many governments are trying to phase out these programs, and hope that the universities will generate opportunities for private sector jobs in the region, but workfare-like employment persists.

OPEC nations probably aren’t too terrified of oil skirting the $40 a barrel level just yet. The current drop in prices has largely been caused by a decline in demand due to economic conditions and the bursting of the speculative bubble in commodities. It did not result from new oil strikes outside of OPEC or the sudden availability of cheap ethanol or electric cars. An economic turnaround, combined with a further dwindling of existing supplies, could perk prices back up.

Nonetheless, the outlook for oil producers is certainly less optimistic than it was a year ago and transportation technology continues to improve. So keep that number in mind.

Michael Kanellos | October 27, 2008 at 2:04 PM

Greentech Innovations: Why Fuel Cells Finally Make Sense

Fuel cells. Bring up those two words in polite conversation at a greentech conference and close to half of the people in listening range will say, "You've got to be kidding."

Sanjiv Malhotra, CEO of methanol fuel cell maker Oorja Protonics, would care to differ. His company, which he will showcase at the Greentech Innovations End to End Electricity Conference on November 17, makes large-scale fuel cells for forklifts and cellular towers. In specific applications, fuel cells do a far better job than batteries or diesel generators, he says.

First, look at fork lifts. A lead-acid battery pack can only power a fork lift for four hours before depleting. An expensive lithium-ion battery can go eight hours. The fuel cell will keep the fork lift cranking for 12 hours, or more than one shift.

Charge time is also far lower. It takes eight to 15 hours to charge a lead acid battery pack, two to four hours to charge a lithium-ion pack, but only three minutes to fill up a methanol tank. Because batteries take so long to charge, fork lift drivers don't wait around for their batteries to rejuvenate. Instead, they drive their rigs to a battery changing bay where a technician swaps out the old battery for a new one.

But that adds cost. Think of it, Malhotra says. You need at least two battery packs for each forklift and a lot of chargers, one for ever two batteries at a minimum. The infrastructure for a lead acid battery fork lift operation can run $500,000, which is roughly the same price as one for lithium ion battery forklifts. Oorja's methanol refueling station: $25,000. (Here's a video of an Oorja-powered fork lift in action.)

Toyota, Nissan and Ace Hardware already have fork lifts powered by Oorja fuel cells and are testing them. The company has made 150 units to date and is engaged in ten field trials. It takes four hours to build one of the fuel cells from scratch.

Is it tough to get methanol? No. One of the company's customers, a large meat processor, says its easy. "After I tell you this you will probably want to become a vegetarian. They (meat processors) feed methanol to the chickens," he said. It gets mixed into the feed. It costs a few dollars a gallon.

As an added bonus, there's a 66 percent reduction in carbon dioxide emissions, assuming that those batteries are being charged up from coal-fired power plants. Thus, in real life, you have to knock that figure down a bit, but a sizable delta will still persist.

Now onto cellular towers. After Hurricane Katrina, the FCC has been busy passing new regulations regarding backup time for cell towers. Cell carriers will likely have to prove they can provide eight hours of backup time. Methanol fuel cells are simply easier to operate and can be cheaper. Oorja in fact will soon kick off a trial with an overseas carrier. (Malhotra won't divulge the name for wide publication yet, but expect to see it soon.)

Michael Kanellos | October 26, 2008 at 2:49 PM 9 Comments

Space Age Septic Tank Will Water Your Lawn

Venus. The goddess of love. And wastewater treatment.

Biokube, a Danish company, is going to bring the BioKube Venus to California. The Venus is an efficient septic system that cleans your household wastewater and sewage to such a degree that the water—after treatment—can be used on the lawn. Denmark is a center for water technologies.

“The average American home sprays around 15,000 gallons of water a year on their lawns,” said Patrick O’Regan, head of the U.S. Business Development Center for BioKube. “This will more than take care of that.”

The Venus effectively works by cleaning the water to a much higher degree than ordinary septic systems. In ordinary systems, solids are settled out via gravity. The remaining water then enters a tank with bacteria to clean it. After that, it gets released into a leaching field, where bacteria in the soil cleans it further. In the Venus, the water passes through several bioblocks, or membranes housing bacteria. Further purification in soil isn’t needed at that point, he said.

The Venus can handle around 7.5 liters every 15 minutes, he said. The tank stands around six feet tall and is around four feet in diameter.

Why California? The state has and will continue to tighten up its regulations on these things. Approximately 1.2 million septic systems in the state will need to be unplugged and/or renovated to comply with modern regulations. The state is also facing more challenges with water supply and water consumption.

The average American home, by the way, uses 400 gallons a day.