Alabama Gets First-In-World Carbon-Negative Algae Biofuel
by   /  August 20th, 2014

With a little help from the Japanese corporation IHI, Alabama can now lay claim to the world’s first algae biofuel system that also treats municipal wastewater, resulting in a carbon-negative process. IHI’s Algae Systems LLC company has just completed a demo run on a 40,000 gallon-per-day plant that deploys floating photobioreactors in Mobile Bay at Daphne, Alabama. That’s quite a step up from the test tube-sized algae biofuel experimentation going on at the Daphne Utilities treatment plant last fall. Aside from the carbon-negative angle, the system is particularly interesting because it relies on local, naturally occurring algae rather than those amped-up proprietary algae strains we’ve been fangirling on lately. If you’re a little skeptical of the naturally occurring strain thing, consider the parallel with solar power. While ultra-efficient solar cells are coming on the market, the most efficient solar cell does not necessarily lead to the most cost-effective solar installation, or to the broadest range of application. Think about the contrast between relatively low-efficiency organic solar cells and their high-efficiency silicon cousins, and you’re on the right track. Crossing that idea over to algae biofuel production, IHI and Algae Systems have taken a holistic, energy-efficient approach to algae biofuel production. While the new algae biofuel system might not boast the most efficient strains for biofuel production, it is a problem-solver that piggybacks on a liability — that would be the municipal wastewater — and extracts value from it.

Algae Biofuel Photobioreactors
For those of you new to the topic, floating photobioreactor is algaespeak for plastic bag. What you do is you take long, durable plastic bags, fill them with a nutrient-rich growing medium (wastewater, in this case), throw in some algae, and let sunlight work its magic. The algae grow quickly in the closed environment, and there’s your biofuel crop. The Daphne Utilities wastewater treatment plant chugs away at three million gallons per day, so there’s plenty of wastewater to spare for the new demo plant. That takes care of the water supply angle, which is something that bedevils conventional algae farming. The choice of local algae means that up-front costs are nothing compared to developing a proprietary strain. It also provides for lower running costs, since the local algae are already acclimatized and require no special environmental controls. That also translates into lower energy use. The cost and energy consumption angles also come into play with the choice of floating the photobioreactors out in the bay, rather than building new infrastructure on land. The bay waters help to stabilize the internal temperature, and the waves provide a natural means of keeping the contents mixed for optimal growing conditions. As the algae grow, they take up the nutrients in the wastewater, which would otherwise require an energy intensive treatment process. That’s the carbon-negative deal in a nutshell. According to IHI, after the algae is harvested the result is clean water than can be discharged into the bay without risk of creating dead zones. Not for nothing, but NASA is also tinkering around with a similar wastewater/algae photobioreactor system, with an eye toward recycling wastewater in space. We’ve gone on and on (and on) (here’s another one) about the many ways in which human waste can be repurposed for energy production, so add algae biofuel production to the list.

As for the conversion of algae to biofuel at the Daphne facility, that’s the proprietary part of the system, so we can’t tell you too much about that. What we can tell you is that the system is based on a hydrothermal liquefaction process, which was promising enough to win new Energy Department funding to the tune of $3.2 million for further improvement as part of a $6 million advanced biofuel development package announced last month. The other part of the package went to a woody biomass project. The $3.2 mil for algae biofuel goes to a research consortium led by SRI International and Algae Systems. As far as we can tell, one focus of the project will be to improve the fuel quality by reducing the nitrogen content of the feedstock. This is where the marriage between IHI and Algae Systems comes in. Algae Systems is a start-up that boasts a five-year history dating back to 2009, but IHI got its start in 1853. The company has taken a deep dive into equipment supply for high tech systems in the thermal energy, nuclear power, and aerospace fields, so its areas of expertise dovetail with the hydrothermal liquefaction process.

Seeing Purpose and Profit in Algae
by Matthew L. Wald /  August 18, 2014

Entrepreneurs have been trying for years to get something valuable out of algae. It has not been easy, and not just because algae are an unsightly nuisance (and sometimes dangerous, as is the Lake Erie bloom that has endangered drinking water this month). Although algae grow prodigiously and contain potentially useful molecules — especially lipids, which can be turned into high-energy fuel and other products — extracting those molecules has proved complicated and expensive. So far, virtually the only marketable products based on algae have been high-end skin creams. But a Nevada company, Algae Systems, has a pilot plant in Alabama that, it says, can turn a profit making diesel fuel from algae by simultaneously performing three other tasks: making clean water from municipal sewage (which it uses to fertilize the algae), using the carbon-heavy residue as fertilizer and generating valuable credits for advanced biofuels. If it works, the company says, the process will remove more carbon from the atmosphere than is added when the fuel is burned. “We think it is a really elegant solution,” said Matt Atwood, the chief executive. At its heart is a “hydrothermal liquefaction” system that heats the algae and other solids in the sewage to more than 550 degrees Fahrenheit, at 3,000 pounds per square inch, turning out a liquid that resembles crude oil from a well. The company sent the liquid to Auburn University, where scientists added hydrogen (a common step in oil refining) to produce diesel fuel. An independent laboratory, Intertek, confirmed that the diesel fuel met industry specifications. The thermal processing has caught the attention of independent scientists. The Department of Energy recently awarded a $4 million grant to a partnership led by SRI International for further work on Algae Systems’ hydrothermal processing system. Engineers hope the system could dispose of a variety of unwanted or hazardous materials. It also destroys pathogens in sewage.

At the University of Texas at Austin, Halil Berberoglu, an assistant professor of mechanical engineering who is conducting research in the area and is not affiliated with Algae Systems, said the process had the potential to eliminate a key bottleneck in working with algae. Earlier processes for extracting lipids have been “very energy-intensive,” he said, adding, “You have to dewater the algae, poke holes in cell walls and do all kinds of separation technologies.” But with high-temperature processing, he said, a factory could get useful products out of not only the lipids but also the proteins and the carbohydrates. “It is a great way to break those molecules up,” he said, and the presence of extra water in the reactor helps reassemble the elements into long-chain hydrocarbons, which are basically crude oil. Challenges remain, because such crude oil sometimes incorporates heavy metals, nitrogen and sulfur. But “it is by far the most promising approach,” Dr. Berberoglu said. And it has attracted a wide variety of employees. John Perry Barlow, a former lyricist for the Grateful Dead and a founder of the Electronic Frontier Foundation, an Internet civil liberties group, is a vice president; he was in charge of finding a site for the pilot plant — in Daphne, Ala., on Mobile Bay — and is looking for a spot for the commercial plant that the company hopes will follow. The general manager of the Daphne municipal water and sewage utility, Rob McElroy, announced this month that he had been so impressed with the pilot plant that he was quitting his job to work for Algae Systems. Company executives say their pilot plant consumes pollutants like phosphorus and nitrogen, which are blamed for the algae bloom in Lake Erie and the “dead zone” near the mouth of the Mississippi in the Gulf of Mexico.<

The installation in Mobile Bay takes clever advantage of natural characteristics. It uses giant plastic bags made by Nike that are filled with sewage and algae. The bags float on the water, moored at each end like a sailboat. The bay water keeps the algae at the right temperature, and the waves stir the mix. Some companies have tried gene-altered algae, but Algae Systems uses naturally occurring forms drawn from the bay. Whichever strain flourishes in the bags is what the company uses. “We call it the Hunger Games,” Mr. Atwood said. The early results were promising enough for IHI, a Japanese conglomerate, to invest $15 million. Biofuel plants, like hope, spring eternal but have mostly ended in grief. KiOR, which spent more than $200 million to produce a synthetic fuel from wood, recently shut down; Ineos Bio, the offspring of a major Swiss chemical company, produced commercial quantities of ethanol from wood waste a year ago, but now says it has “unexpected start-up problems.” In many high-tech start-ups, the problem is to get from the pilot stage to the commercial stage, but even some biofuel companies that have lined up the financing to build a commercial-scale factory have been unable to make the process work. Algae Systems says it hopes it can make a profit by producing potable water as well as fuel, and by charging fees to municipalities for treating their wastewater.

Another potential source of income is the generous renewable fuel credits that the Environmental Protection Agency offers for companies producing “advanced” biofuel, those with small carbon footprints. The credits are purchased by oil companies that are obligated by law to blend in renewable fuels — or, more practically, to complete a paper transaction showing that they have supported such fuels. Still, Algae Systems estimates that it will cost $80 million to $100 million to move from the pilot plant to commercial-scale production. So far it has not made that leap.

Algae startup emerges with a pilot plant in Alabama
by  /  August 19, 2014

Just a bit of information has trickled out about five-year-old startup Algae Systems over the years. It’s been working on growing algae offshore in big plastic bags using waste water, which was originally a concept out of NASA. It later picked up assets and patents from the defunct algae startup GreenFuel. The company also turned some heads early on just because it’s home to an interesting group of characters. CEO Matt Atwood is a young chemist, entrepreneur and avid Burner, and Vice President John Perry Barlow, is the John Perry Barlow, the Grateful Dead lyricist and the co-founder of the Electronic Frontier Foundation. They raised some angel funding from billionaire Edgar Bronfman Jr. But this week, the stealthy startup finally came out of quiet mode to talk about a pilot plant it just completed in Mobile Bay in Daphne, Alabama. The 25-person team started building it last summer, working with the local utility Daphne Utilities, and just finished it in June of this year.

The plant takes disinfected waste water from the city of Daphne, combines it with CO2, and fills up large plastic bags offshore in nearby Mobile Bay. The waves naturally mix the substances around, the sun shines on the bags, and after about four days, algae grows. The algae is then harvested, and the left over water in the bags is cleaned. The result is that Algae Systems can sell both the harvested algae to make diesel and jet fuel, and at the same time the waste water is cleaned and can be reused. “It’s impossible to have a biofuels company and be profitable and stable only off of fuels because it’s such a low value commodity,” Atwood told me.

The plant in Mobile Bay is at demo scale right now, and it is treating 40,000 gallons of waste water per acre per day. In terms of fuel production that’s about 3,000 gallons per acre per year with their current productivity numbers. Atwood expects that to increase. At the heart of the plant is Algae System’s “hydrothermal liquefaction” tech, which at 550 degrees Fahrenheit, turns algae and the sewage into a liquid that’s like a crude oil. Adding other substances they can make the different types of fuels. When I ask why the company chose the city of Daphne and Mobile Bay, Atwood explains that for the first plant, it needed the “right partner.” Daphne Utilities is small but progressive and forward thinking. Atwood and the team also managed to recruit Daphne Utilities General Manager Rob McElroy to join their group now that the pilot plant is up and running in the Bay. Barlow was responsible for siting the plant.

The pilot plant is the first step for Algae Systems. The next step is to build a commercial plant and raise funding. As many of our readers know, this is a point in a startup’s life commonly called “the valley of death,” because many startups languish in between initially starting to prove their tech and building it at commercial scale. Algae Systems is looking to raise a Series B round, and a commercial plant could cost between $80 million to $100 million. In addition to angel investor Edgar Bronfman Jr, Japanese conglomerate IHI invested $15 million into the startup.Funding for cleantech and biofuel companies in Silicon Valley has been tight for several years now. Strategic investors will probably be a lot more open to this type of investment.

Algae Systems has other helpful partners. The Department of Energy delivered a $4 million grant to a partnership led by SRI International to work with Algae Systems tech. Algae Systems also has a long time relationship with another startup called Global Thermostat, which bills itself as a carbon negative capture company. Atwood said that Algae Systems plans to work with Global Thermostat to integrate its tech with theirs and build a plant. Ways to turn algae into fuel have long been under development by large companies and startups alike. Solazyme is one of the startups that managed to break through, and scale up their tech. Craig Venter’s Synthetic Genomics ended up moving away from and downgrading its original algae fuel research. Startup GreenFuel is now living a second life through Algae Systems’ deployment. It’s a hard business to be in, to be sure. But given Algae Systems multiple revenue streams, and multi-purpose plants, it could have an advantage in specific environments that need low cost clean water and biofuels.

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