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By Robert Rapier on Feb 28, 2009 with 2 responses

More Reality Checks for Algal Biodiesel

I have to admit, when I first heard about algal biodiesel, I thought it was really an incredible concept. As time went by and I learned a bit more, reality sank in. The reality was brought on by Krassen Dimitrov’s analysis of Greenfuel Technologies and their algae claims, as well as conversations I have had with John Benemann, who has been involved in algal biodiesel research for many years (and was co-author of the close-out report of the U.S. Department of Energy’s Aquatic Species Program.) Krassen’s analysis raised some eyebrows when he suggested that algal biodiesel would have to sell for $20.31 a gallon to be economically viable. That number was so far out there, that many people just dismissed it out of hand.

During my ASPO presentation last year (Biofuels: Facts and Fallacies) I discussed algal biodiesel, and mentioned Solix Biofuels by name and in my slides. Interestingly, Bryan Wilson, a co-founder of the company, just went on record and suggested Krassen was an optimist:

Algae Biodiesel: It’s $33 a Gallon

Algae biofuel startup Solix, for instance, can produce biofuel from algae right now, but it costs about $32.81 a gallon, said Bryan Wilson, a co-founder of the company and a professor at Colorado State University. The production cost is high because of the energy required to circulate gases and other materials inside the photo bioreactors where the algae grow. It also takes energy to dry out the biomass, and Solix uses far less water than other companies (see Cutting the Cost of Making Algae by 90%).

I can’t tell you how refreshing (but very rare) it is to see an admission like this. The biggest warning signal there is that high costs are due to high energy requirements. This suggests a very poor energy return, which means that as oil prices rise, algae won’t necessarily become more viable. It will be subject to the Law of Receding Horizons, which simply means that energy sources that require high energy inputs will always see their point of economic viability pushed farther out as energy prices rise. Remember when oil was $20 a barrel, and oil shale was going to be viable at $40 oil? By the time oil got to $100, I was hearing that it would be viable at $120 oil.

This won’t stop people from throwing money at algal biodiesel. As John Benemann once said to me “This is a good research project, but nowhere close to commercialization.” Somehow, I don’t think this is the reason investors are throwing their money in that direction. They are falling victim to the hype of ‘the next big thing.’

Note: I am about to hop a plane for London, and will be largely out of contact for 5 days.

  1. By Hank on July 13, 2011 at 4:48 am

    The production facility that Solix is a pilot plant, not a full production facility. That means that their technology is still in the testing phase. All of their employees are senior scientists and engineers doing extensive testing on the algae they make in order to determine how to maximize yields before they spend the money to make a large scale production facility that will create algae in amounts that will make the cost comparable to conventional fossil fuels. This is standard practice for any new technology.

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  2. By Robert Rapier on July 13, 2011 at 5:10 am

    But Hank, the problem here isn’t one that is going to be solved by scaling up. Those PBRs are very expensive relative to the solar insolation, as shown in Dimitrov’s analysis. Further, the energy requirements of moving algae around are well-known to be high relative to the algal oil that is produced. In that case, scaling up isn’t going to help.

    RR

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