A road map to commercially viable algae-biofuel production

A Roadmap to Commercially Viable Algae-Biofuel Production

By

Ovo Adagha

A dissertation submitted in partial fulfillment of the requirements f or the award of M.Sc degree in Energy Futures (Renewables), School of Engineering - University of Aberdeen.

September, 2009

A Roadmap to Commercially Viable Algae-Biofuel Production

O. ADAGHA

Executive Summary The fact that algae biofuels introduce huge possibilities and a variety of options in dealing with the world‘s energy and climate problems is well documented in literature. With s ignificant amounts of financial investments and effort being allocated to research, the race is now on to develop the first commercial -scale algal biofuel production infrastructure that is sustainable and commercially viable. Most researchers readily concede that the commercial viability of algal biofuel economics are extremely challenging, highly variable, and subject to dynamic, speculative, and volatile commodity markets. The infrastructure required to develop a profitable, algae -based fuel generation is still in various stages of development and the final configuration is yet to be determined and demonstrated on an industrial scale. A grounded theory and techno-economic framework for data analysis was adopted for the study. The comparative approach incorporated the use of case studies and addressed the research issue from various perspectives in chapters 3 and 4. An extensive review of current and relevant literature was carried out in Chapter 2. This was to provide the reader with a firm background of the opportunities and limitations peculiar to algae – biofuel production. The analyses presented here will provide a deeper understanding of algae biofuel economic drivers and will help address the specific challenges of algae growth strains, harvesting and conversion technologies. More importantly, it sets the tone for a correct appraisal of algae biomass not only for fuel purposes but as part of a wider production chain that will add value to the other parts of the algae. A remarkable change in fossil fuel production and consumption has been predicted based on the overall shift by key energy providers and governments towards clean fuel technologies. Microalgae production via the routes recommended in this dissertation will open up new ways for environment friendly manufacturing and nature preservation. It is possible to expect that in the near future the model recommendations will be better perceived, thus leading to global reorientation of priorities for algae biofuel development and deployment.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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Table of Contents 1.1 Introduction .............................................................................................................8 1.2 Purpose of Study ...................................................................................................10 1.3 Project Objectives ..................................................................................................10 1.4 Project Focus .........................................................................................................11 1.5 Analytic Method ......................................................................................................11 2.0 Literature Review........................................................................................ ......12 2.1 Historical Overview............................................................................................12 2.2 Review of Algae Production Processes .................................................... ........16 2.2.1 Algae Culture Systems ...................................................................................17 2.2.2 Basics of the Algae Production Process .........................................................19 2.3 Review of Growth Methods ................................................................................19 2.3.1 Open Pond Reactors ................................................................................. ....20 2.3.2 Closed Bioreactors .........................................................................................22 2.3.2.1 Big Bag Reactor ........................................................................................ 23 2.3.2.2 The bubble column reactor ..................................................................... ...24 2.3.2.3 T ubular reactor system...............................................................................25 2.3.2.4 Flat photo-bioreactors ................................................................................26 2.4 Algae Synthesis .............................................................................................. 29 2.5 Algae Harvesting Technologies .........................................................................30 2.5.1 Settling & Sedimentation ..................................................................................31 2.5.2 Filtration .......................................................................................................32 2.5.3 Centrifugation ...............................................................................................32 2.5.4 Flotation ........................................................................................................34 2.5.5 Flocculation ...................................................................................................35 2.6 Algae Biofuel Conversion Technologies.............................................................35 2.6.1 Thermo-chemical Conversion...........................................................................37 2.6.1.1 Gasification ...................................................................................................37 2.6.1.2 Liquefaction..................................................................................................38 2.6.1.3 Pyrolysis ......................................................................................................39 2.6.1.4 Hydrogenation ..............................................................................................40 2.6.2 Biochemical Conversion ................................................................................42 2.6.2.1 Fermentation...............................................................................................42 2.6.2.2 Transesterification........................................................................................43 2.7 Current Algae Development Initiatives in the EU and rest of the world................44 2.8 Summary of Review .......................................................................................45 3.0 Algae Production Systems: Strategies to Commercial Viability...........................47 3.1 Algae-based CO2 Sequestration.......................................................................47 3.1.1 Algae CO2 Capture from Power plants..............................................................48 3.1.2 Municipal Wastewater Treatment with CO2 Conversion to Biofuels.....................50 3.2 DNA and algae strain modification ....................................................................53 3.2.1 Algae Genetic transformation technologies .......................................................53 3.2.2 Manipulating Microalgal Metabolism..................................................................55 3.3 Low Cost Harvesting ......................................................................................56 3.4 Co-products from Microalgae Biofuel Production.................................................58 3.5 Implementing an Integrated Production Strategy..................................................59 2

A Roadmap to Commercially Viable Algae-Biofuel Production

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3.6 Chapter Summary............................................................................................62 4.1 Techno-economic modelling and analyses of Algae biofuel production................63 4.2 Methodology....................................................................................................63 4.3 Data Sources .................................................................................................63 4.4 Issues for Techno-Economic Assessment & Evaluation Criteria..........................64 4.5 Cost Analysis..................................................................................................64 4.6 Algae Biofuel Economic Drivers Analysis...........................................................67 4.6.1 Operations and Maintenance Cost drivers.......................................................68 4.6.2 Capital Cost Drivers.......................................................................................68 4.6.3 Revenue Drivers............................................................................................68 4.7 Economic Viability Lines for Commercial Algae Projects..................................... 70 4.7.1 Orange Line Scenario .................................................................................. 72 4.7.2 Solid Green Line Scenario ............................................................................ 72 4.7.3 Blue Line Scenario........................................................................................ 72 4.7.4 Dotted Green Scenario ................................................................................. 66 4.8 Oil, gas and algae biofuel comparative analysis................................................. 73 4.9 Algae Bio-Jet fuels – An economic analysis....................................................... 75 4.10 SWOT Analysis .............................................................................................76 4.11 Summary of Analyses.....................................................................................78 5.0 Chapter 5.........................................................................................................79 5.1 Summary ........................................................................................................79 5.2 Recommendations............................................................................................79 5.3 Conclusion.......................................................................................................81 Appendix ...............................................................................................................83 References.............................................................................................................84

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List of Diagrams

Fig 1: Elements and issues for assessment. .......................................... 16 Fig.2: Microalgae strains currently mass cultured..............................18 Fig 3: Simple schematic of algae growth and harvesting process.......19 Figure 4 . Examples of experimental, open outdoor systems for cultivation of microalgae... 21 Fig. 5: Schematic diagram of a photobioreactor............................................................. 22 Fig.6: Big bag culture reactor............................................................ 23 Fig. 7: The bubble column reactor................................................. 24 Fig. 8: Schematic of the bubble columns pitched together...24 Fig.9: Tubular reactor system.......................................................25 Fig 10: Tubular reactor system .................................................... 25 Fig. 11: Tubular column photobioreactor..................................... 26 Fig. 12: Flat photo bioreactor...................................................27 Fig. 13: Scaled model of algae farm with raceways and settling ponds..31 Fig. 14: Flow chart of the Centrifuge harvesting process.................................. 33 Fig. 15: Alfa Laval CH-36B GOF Separator Centrifuge.....................34 Fig 16: Biomass for fuel applications—ranges of moisture content.....35 Fig. 17. Energy conversion processes from microalgae..............37 Fig 18: Flow diagram of a microalgal system for fuel production by gasification...38 Fig 19: Separation scheme for liquefies microalgal cells...................39 Fig. 20 . Schematic of fast pyrolysis process principles..................40 Fig. 21. Apparatus used for hydrogenation within an autoclave......41 Fig. 22. Fermentation process of microalgae.................................43 Fig. 23 shows the schematic process of biodiesel production......44 Fig. 24: A simplified flow diagram for microalgae production using CO2 capture from a power plant... 50 Fig. 25: Process Schematic for Tertiary Wastewater Treatment with Microalgae.......52 Fig 26: Commercially important metabolic pathways in microalgae........... 55 Fig 27: Quantum Fracturing approach................................................56 Fig. 28: Single step algae extraction technology model..........57 4

A Roadmap to Commercially Viable Algae-Biofuel Production

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Fig 29: A scheme of selected algae co-products.............59 Fig. 30: Coyote Gulch Demonstration Facility.............60 Fig. 31 Schematic model of an integrated production process.....61 Fig 32: Algae biofuel production Cost Threshold...........65 Fig. 34: Estimated cost breakdown of Algae biofuels........66 Fig. 35: O&M Cost Drivers.............................68 Fig. 36: Capital Cost Drivers.................69 Fig 37: Revenue Drivers. .....................70 Fig 38: Techno-economic Analyses chart...71 Fig. 39 Source: International Energy Agency World Energy Outlook 2008...73 Fig. 40 IHS/CERA upstream oil & Gas capital cost index……75

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LIST OF TABLES Table 1: Comparison of open versus closed land based systems..........27 Table 2: Idealized formulation of photo biological and chemical reactions for fuel generation......... 36 Table 3 SWOT Analysis...............................................................................78

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A Roadmap to Commercially Viable Algae-Biofuel Production

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Chapter 1 1.1 Introduction Scientists regard algae as a promising source of biofuels. They are aquatic plants that carry out the same process and mechanism of photosynthesis as higher plants in converting sunlight, water and carbon dioxide into biomass, lipids and oxygen. They can grow on land that will not compete with food production, as do traditional crops like corn. Some of the main characteristics that sets it apart from other biomass resources are that algae: possess a high biomass yield per unit of light and area; can have a high oil or starch content; do not require agricultural land; fresh water is not essential and nutrients can be supplied by wastewater and CO2 by combustion gas [1]. Microalgae and macroalgae describe two different species of algae. Mic roalgae have many different species with varying characterizations and they often exist as single cell colonies. This factor and the lack of specialization make their cultivation easier and more controllable, while their small size makes subsequent harvesting more complicated

[1].

Macroalgae on the other hand are less versatile, there are far

fewer options of species to cultivate, and there is only one main viable technology for producing renewable energy: anaerobic digestion to produce biogas [1]. Both groups are identified in the dissertation, but as there is more research, practical experience, culture and more fuel options from microalgae, these will be considered in depth. Algae‘s potential as a feedstock is widely acknowledged to be growing in the b iofuel market. The rise in investments has increased yearly and it is a promising sign that algae -based biofuels have the potential to contribute to the world‘s energy portfolio. Varying levels of success have been achieved by companies and research in the genetic modification of algal species for efficient sunlight utilization

[2];

and production of

specific hydrocarbon chains for direct processing into gasoline [3] [14], diesel [4], and jet fuel [130,131]. Nevertheless, the exploitation of microalgae for biofuels is not a near-term commercial prospect. The high costs of even the simplest of algal production systems and the undeveloped nature of algal mass culture technologies, from the selection of algal strains that can be efficiently maintained in the open ponds to their low-cost harvesting, and, most importantly, due to the need to achieve very high productivities of algal 7

A Roadmap to Commercially Viable Algae-Biofuel Production

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biomass with a high content of vegetable oils or other biofuel precursors, required by the high capital and operating costs of algae production [8], presents the critical challenge. In order to play a dominant run in the energy mix of the future algal production systems must have low capital and operating costs to compete with other crops and alternative energy sources. However, the commercial viability of algae-based biofuels production is largely a factor that will be decided by the economies of scale. Regardless of whatever advances might come in terms of technology and biology, the fact remains that the commercial marketplace will not have an appetite for funding capital intensive energy projects unless the risk-return ratio is acceptable to debt and equity financiers [5]. A number of researchers, companies and government organizations have previously assessed different cost effective production designs for algae systems. These efforts are justified by the potential to produce biofuels that do not compete with food crops

[6].

The most popular of designs previously analyzed include

open ponds, open raceways, and closed photo-bioreactors. Generally, these assessments have concentrated largely on the capital, operations, and maintenance costs. The capital costs are usually broken down into costs associated with algal biomass growth, harvesting, dewatering 1, and algal oil extraction systems [5]. In addition, there are more traditional project costs such as engineering, infrastructure preparation, and balance of plant, installation and integration, and contractor fees. Operations & maintenance costs generally include expenses for nutrients, CO2 distribution, and water replenishment due to evaporation, utilities, components replacement, and labour costs. In addition to capital and O&M costs, the cost of land is usually taken into account as this can take up a significant portion of the expenditure. However, while due consideration will be given to these factors, a number of key issues which are fundamental to the commercial viability of algae biofuels need to be addressed. Furthermore, an attempt is made to understand the long-term planning considerations and other issues relative to the commercial scale deployment of algae biofuels, based on current data, accurate and objective assessments.

1

Getting the algae to an acceptable concentration for further processing.

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1.2 Purpose of Study The primary purpose of this topic area is to develop cost effective algae based biofuels that are competitive with their petroleum counterparts. 1.3 Project Objectives The overall objective of this project is to analyze the techno -economic feasibility of microalgae production for energy in the broadest sense, and to provide insights into the various issues surrounding production, while analyzing a range of possibilities of achieving a significant reduction in production costs. It attempts to define and recommend the best practical processes that can be developed for a commercially viable algae fuel production based on present knowledge. In so doing, the research will aim to highlight the following key factors: 

The competitiveness of algae biofuel with regard to other feedstocks.



The market outlook of algae biofuels.



The investment potential and demand for algae biofuel.



The life cycle assessment of algae to energy.



The latest information in the research and development of algae harvesting, lipid upgrading and oil extraction.



The robust ways to overcome project development risks.

1.4 Project Focus The thesis will focus primarily on the economic feasibility of microalgae biomass production for conversion to fuel. Thus, an attempt will be made to explo re the various aspects, promises and limitations of algae as a bio energy resource.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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1.5 Analytic Method A grounded theory and techno-economic framework for data analysis was adopted for the study. The comparative approach incorporated the use of case studies and addresses the research issue from a different perspective than has been the norm. Instead of forecasting the likely costs and yield for a given production procedure, the goal is to assess what a project would require in order to make it commercial ly viable.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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Chapter 2 2.0 Literature Review First a brief historical overview of algae production, particularly for fuel generation purposes, is presented. 2.1 Historical Overview The concept of using algae as a source of fuel is not new. Dumitresc u [7] posited that a significant portion of the petroleum that is extracted from the ground today was deposited betwee n 112 and 125 million years ago during the Early Cretaceous epoch. Organic material thrived in the volcanic and carbon-rich environment, which was then deposited on the seafloor to be compressed and stored for millions of years . Thus, the petroleum we extract from the ground today is the result of millions of years of high temperatures and pressures from geologic forces transforming the organic matter. By growing algae in ponds or reactors, the same procedure is simulated, whilst avoiding the millions of years of processing

[8].

The practical use of microalgae cultures was, apparently, first given serious consideration in Germany when Von Witsch

[9]

proposed them as a source of vegetable oils. That proposal was based on the

discovery that under conditions of nitrogen deficiency some microalgae would accumulate large amounts of lipids, mostly unsaturated triglycerides

[10].

This holds true of some species of algae; principally the green

algae and diatoms, but not of blue green algae or red algae, nor of the seaweeds. Another factor which focused attention on microalgae was their extensive use during the 1930's and 1940's in basic research on photosynthesis. Warburg

[11],

in particular, used Chlorella cultures in experiments

which led him to believe in a ''four quantum'' CO2 fixation reaction. This was a highly controversial theory2, and not strictly applicable to microalgae alone. On the basis of the background research, microalgae became a subject of interest in the United States and Europe, specifically its implications on food production [10] . A small scale production system for microalgae 2

Almost all researchers now believe that at least eight quanta are required for photosynthesis.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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was operated in the United States by the A.D. Little Company in the early 1950's, under sponsorship of the Carnegie Institute of Washington, which brought together early studies of microalgae productions in a classic book: Algae Culture: From Laboratory to Pilot Plant [12]. Almost all the issues of importance and concern for microalgae production were first discussed in this publication: the need for low cost harvesting techniques such as spontaneous flocculation leading to settling or floatation; the need for mixing the culture; the attenuation of light by the culture 3; the flashing light effect; the need to recycle all of the water used in growing a crop of algae; the problem of maintaining a pure, unialgal culture; the problem of preventing grazers and maintaining a stable culture; the trade -offs of density, productivity, and retention time; temperature controls; the supply of CO2; among others. A variety of small systems for algae production were described, from vertical tubular transparent reactors, to open circular and trough-like reactors, to the large plastic bag - about 900 foot long - used by the A.D. Little project. The use of algae for fuel production was proposed by Meiers 4

[28]

at the first meeting of the Solar Energy

Society in Tucson, where he presented a scheme for the conversion o f algae biomass to methane. This concept was later demonstrated in the laboratory by Golueke and Oswald 5, who showed that they could operate chemostat for conversion algae biomass to methane gas [13]. The nutrients were recycled, thus only CO2, makeup water and nutrients needed to be supplied in addition to sunlight. Subsequently, Oswald and Golueke, developed a conceptual process

[14]

based on shallow,

open, mixed ponds, called "high rate ponds". In this procedure, carbon is recycled by converting methane to electricity. Makeup water and nutrients were to be supplied by local sewage flows. The authors concluded that even using very favourable assumptions, microalgae derived electricity would not compete with projected nuclear power costs [10].

3

The theoretical maximum photosynthetic efficiency (FM ) that can be attained by an algae culture is defined by the Bush equation - Fm = S1 /S0 [ln (S0 / S1 ) + 1] - as presented by Burlew in [12]. 4

M eiers founded the idea that microalgal triacylglycerols can be used as feedstocks for biofuel production [28]. Golueke at al used a small (1 liter) microalgae chemostat which supplied algae to a small digester and it proved succesful when employed over a period of time. 5

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In the 60‘s, a number of R&D activities in microalgae production as part of waste water treatment were carried out in the United States and Europe

[15, 16] .

The concept of the "high rate" pond was applied at a

small waste treatment plant in St.Helena, California [17, 18]. In Dortmund, Germany, a process for microalgae protein production was developed using open, high rate ponds mixed with paddlewheels

[19].

The health food market in Japan also flourished in the 1960‘s, based on a large number of reports that Chlorella had beneficial health effects. This led to the establishment of over a dozen small production facilities [10]. The initial biological and engineering challenges were overcome without regard for cost, as the demand for Chlorella tablets were on the rise. Microalgae were again actively considered as an energy source in the early 1970's, with the start of the energy crisis. The US National Science Foundation (USF) and a number of European bodies organized a collaborative research partnership to investigate the algae to methane

[20],

the production of methane and

hydrogen by microalgae was proposed with W. J. Oswald and C. Golueke as principal investigators. They carried out experiments on digestion of microalgae biomass to methane

[21] .

In the ensuing years from

1975 to 1980, Benemann, Oswald and colleagues at the Sanitary Engineering Research Laboratory, University of California, Berkeley carried out a series of ERDA/DOE supported projects on the production of fuel from microalgae harvested from waste treatment "high-rate" ponds[22]-[25]. In 1977-1978, the Dynatech R&D Company (Cambridge, Massachusetts) carried out an economic analysis of algae biomass systems for DOE

[26].

Benemann et a1

[27]

carried out a subcontract dealing with the economics of microalgae

production. None of these economic analyses by the groups involved contained detailed supporting information on designs or costs. In recent years, the production of oils and hydrocarbons from algae as a possible route to fuels has witnessed considerable activity in terms of research and literature. Several private interests, including multinational oil firms have promoted active R&D programs in this area, but few concrete details have emerged from these efforts. Thus, this project has carried out a more in-depth analysis of the realistic routes to commercial algae production.

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Perhaps the most comprehensive study of algae as a resource for biofuel production was the Aquatic Species Program (ASP) conducted by Sheehan, et al

[2]

on behalf of the U.S. National Renewable

Laboratory between 1978 and 1996. The focus of the program was the production of biodiesel from high lipid‐content algae grown in ponds and utilizing waste CO 2 from coal‐fired power plants. The double benefit from success of this program would be the development of a viable renewable fuel along with a viable technology for reducing great quantities of CO 2 emissions. During the nearly two decades of this program significant advances were made in the science of manipulating the metabolism of algae and the production engineering of microalgae systems. The programme, despite its accomplishments, was terminated in 1996 largely due to plummeting oil prices. Nevertheless, various researchers have made far-reaching contributions to the science of algae biofuels in the intervening years. And the crux of this work is based on these contributions in terms of research and analytical perspectives. 2.2 Review of Algae Production Processes The key elements and issues to be reviewed under the techno-economic assessment of commercially viable algae biomass production are illustrated in figure 1. 2.2.1 Algae Culture Systems Algae are a diverse group of aquatic, photosynthetic organisms, generally categorized as either macroalgae or microalgae. Rosenberg et al

[29]

identified green microalgae of the class Chlorophyceae

among the eukaryotic widely utilized for current commercial applications belong to the genera Chlamydomonas, Chlorella, Haematococcus, and Dunaliella. The study of these freshwater and marine algae has generated a wealth of information concerning their physiology, biochemistry, and cultivation 33].

[30–

In regard to genetic engineering, these species are amenable to nuclear transformation, necessary for

metabolic control, and secondly, to chloroplastic transformation, for high levels of protein expression, and thirdly, more straightforward approaches to genetic modification compared to higher plants

[33].

Diatoms, a

group of silicon-rich microalgae, and prokaryotic cyanobacteria also offer substantial opportunities for metabolic engineering and biotechnology, but will not be examined extensively in this review

[34, 35].

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Fig 1: Elements and issues for assessment. Source: NREL. Adapted from [153]

For algae to grow, a few relatively simple conditions have to be met: light, carbon source, water, nutrients and a suitably controlled temperature [1]. Many different culture systems that meet these requirements have been developed over the years; nevertheless, meeting these conditions for scaled systems is difficult. Algae are widely regarded as the aquatic relatives of terrestrial plants, and they thrive in aerated, liquid cultures where the cells have sufficient access to light, carbon dioxide, and other nutrients

[31].

They are

primarily grown photoautotrophically; yet some species are able to survive heterotrophically by degrading organic substances like sugars

[35] .

Unlike terrestrial plants, microalgae do not require fertile land or 15

A Roadmap to Commercially Viable Algae-Biofuel Production

irrigation — marine algae even provide an alternative to freshwater use

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[29].

Additionally, because algae

consume carbon dioxide, large-scale cultivation can be used to remediate the combustion exhaust of power plants [36]. Culture systems are very different between macroalgae and microalgae. Because of their small (μm) size, microalgae have to be cultivated in a system designed for that purpose (placed on land or floating on water), while seaweed can be grown directly in the open sea [1].

Fig.2: Mic roalgae strains currently mass cultured, adapted from [22]

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One important prerequisite to grow algae commercially for energy production is the need for large scale systems6 which can range from very simple to open air systems which expose the algae to the environment. 2.2.2 Basics of the Algae Production Process

The fundamental mechanism governing algae growth is photosynthesis [8]. The photosynthesis process is a light-driven reaction which splits water and assimilates carbon into the biomass

[37].

Energy in the form of

photons is absorbed by the algae cells, which convert the inorganic compounds of CO 2 and H2O into sugars and oxygen. The sugars are processed and converted to carbohydrates, proteins and lipids inside the cell walls. Fig. 3 presents a schematic of the growth structure:

Fig 3: Sim ple schematic of algae growth and harvesting process [8].

Wogan et al [8] documented a series of procedures in order to extract the valuable lipids from within the algae cells a series of steps must be undertaken to isolate the algae cells and oil: the traditional process begins by when the algae biomass is separated during the dewatering stage using either centrifuges, filtration or flocculation techniques.

2.3 Review of Growth Methods

Algae are typically found growing in ponds, waterways, or other lo cations that receive sunlight, water and CO2. Man-made production of algae tends to mimic the natural environments to achieve optimal growth conditions. According to literature put forward by various authors

[60] – [38], [39]–[40],

among others: growth

depends on many factors and can be optimized for temperature, sunlight utilization, artificial light, PH control, fluid mechanics and more. Algae production systems can be organized into two distinct categories: open ponds and closed photo-bioreactors. Open ponds are defined by large tracts of water pumped into the ground with some mechanism to deliver CO 2 and nutrients to circulate the algae culture

6

[8].

This section

highly controllable, optimized but more expensive closed systems

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presents a short comparison of open pond systems and closed photo -bioreactors. Both systems have their peculiar traits and are briefly discussed in the next two sub-sections. 2.3.1 Open Pond Reactors

Open pond reactors are the simplest growth system that can be built. Pond reactors are usually unsophisticated contraptions that consist of little more than depressions in the ground, sometimes lined with plastic, and usually designed in a raceway pattern [41]. Experimental examples of open pond reactor are illustrated below in Figure 4:

Figure 4 . Examples of experim ental, open outdoor systems for cult ivation of mic roalgae, whic h can be scaled up to large production facilit ies (10 000 1). (a) Raceway pond wit h a paddle-wheel mix er (2500 l) and (b) circular pond with a rotating arm (100 l) at the Instit ute for Ecosystem Study of the CNR (Florence, Italy ); (c) an inclined-surface system of sloping planes arranged in cascades (three modules of 2200 l each) at the Institute of Microbiology, Academy of Sciences (Trˇebonˇ) , Czech Republic. Adapted from [41].

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According Wogan et al

[8],

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most ponds are open to the atmosphere, which allows unwanted or competing

strains of algae with undesirable properties to enter the pond. These competing algae strains can potentially take over the pond thus rendering the harvest useless. CO 2 is usually delivered to the ponds through natural mass transfer from the atmosphere to the water. Since CO 2 only composes 0.036% of the air, most growth systems limit the amount of CO 2 that can be delivered into the water and subsequently to the algae cells. CO2 can be bubbled through the water to increase the level of dissolved gas, although recent researches [42] – [44], indicate that unused CO2 still escape into the atmosphere. Open ponds are however not without drawbacks. The simplicity of the systems leads to problems with controlling the growth environment and operating conditions delivering less than ideal algae yields

[45].

While ponds are more productive per acre of land than terrestrial crops, a significant amount of land must be used to grow algae in ponds [46]. Other growth conditions such as temperature and PH are also difficult to manipulate. Temperature is difficult to maintain because heat is continuously transferred to the environment. Also, nutrient and oxygen production affect the PH levels in the water. In most open systems, growth rates are generally lower for open ponds because sunlight energy is diminished below the water surface leaving algae cells at the bottom of the pond with little energy for growth [8]. Mixing can be implemented to allow algae cells adequate exposure to photons, but mixing is not classified as a definite solution. 2.3.2 Closed Bioreactors Closed bioreactors introduce a host of culture media, where temperature, gas exchange and other competition problems are regulated in various ways. They offer continuous operation, a high level of controllability and elevated biomass concentrations, which results in lower space requirements and lower harvesting costs per tonne of algae [8].

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Fig. 5: Schematic diagram of a photobioreactor. It consists of a photostage loop, heat exchanger, degasser, circulation pump, CO2 supply, and sensors (e.g., pH and oxygen electrodes, and thermometer). Created by PalSek. [41]

In a 2001 study, Pulz

[47],

outlined the advantages in more specific terms: firstly, closed bioreactors can

distribute sun light over a larger surface area, which can be up to 10 times higher than the footprint area of the reactor. This is due to the fact that algae have their highest growth efficiencies at illumination intensities of not more than around 100 E/(m2s), whereas a sunny tropical day can exhibit values up to 2000 E/(m2s); secondly, evaporation can nearly completely be avoided. The water loss results from the elevated water levels in the algae biomass solution. The concentration of about 100g/L dry solid matter is recovered after mechanical pressing [48]. This allows for the cultivation of algae also in arid areas7 where classical terrestrial agriculture is not possible. A summary of some closed systems are briefly annotated in following sub sections: 2.3.2.1 Big Bag Reactor Sizes are scaled up to 1000 litres, but its sensitivity to general environmental conditions and short life cycle makes this system inappropriate for outdoor operations.

7

Includes deserts.

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Fig.6: Big bag culture reactor [49].

2.3.2.2 The bubble column reactor

Fig. 7: The bubble column reactor. Aadapted from [50], [51]

Scalability of this system is limited since, when putting several systems close together, they will cast a shadow on each other. See fig. 8:

Fig. 8: Schematic of the bubble columns pitched together. The Field of bubble columns induce linear shading [ 51].

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2.3.2.3 Tubular reactor system Using a reactor consisting of long horizontal tubes eliminates this proble m. An illustration is provided in figures 9 &10.

Fig.9: Tubular reactor system [52].

Fig 10: Tubular reactor system [52]

However, this has its own scaling problem: algae will consume nutrients and CO 2 while producing O28 causing further deterioration along the tube.

Fig.11:Tubular column photobioreactor consisting of two polyacrylate cylinders placed one inside the other to form the culture chamber [41]

8

Elevated concentrations of oxygen can inhibit algal growth.

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2.3.2.4 Flat photo bioreactors This system can potentially yield a much higher biomass concentration, but is still under development. The complicated flow regime inside the reactor and scalability are the major challenges associated with this reactor, although the latter has been greatly improved by a design called the green wall panel [53]. Fig. 12 presents a pictorial view of flat photo bioreactors in a so lar panel-like set-up. There are many variations and innovations on the previously described closed systems.

Fig. 12: Flat photo bioreactor [54].

Many different designs of photo bioreactors have been developed, but most are relatively expensive compared to open ponds. Nevertheless, photo bioreactors appear to satisfactorily meet the conditions for producing algal biomass on a large scale. Closed, controlled, indoor algal photo bioreactors driven by artificial light are already economical for special high-value products such as pharmaceuticals, which can be combined with production of biofuel to reduce the cost. Table 1: Comparison of open versus closed land based systems Parameters

Open ponds

Bioreactors (PBR)

raceways Required space

High

For PBR itself low

Water loss

Very high, may also cause

Low

salt precipitation CO2-loss

High, depending on pond

Low

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depth Oxygen concentration

Usually low enough

Build-up in closed system

because of continuous

requires gas exchange

spontaneous outgassing

devices (O2 must be removed to prevent inhibition of photosynthesis and photo oxidative damage)

Temperature

Highly variable, some

Cooling often required (by

control possible by pond

spraying water on PBR or

depth

immersing tubes in cooling baths)

Shear

Usually low (gentle mixing)

Usually high (fast and turbulent flows required for good mixing, pumping through gas exchange devices)

Cleaning

No issue

Required (wall-growth and dirt reduce light intensity), but causes abrasion, limiting PBR lifetime

Contamination risk

High (limiting the number

Low (Medium to Low)

of species that can be grown) Biomass quality

Variable

Reproducible

Biomass concentration

Low, between 0.1 and 0.5

High, generally between

g/l Production flexibility

Only few species possible,

0.5 and 8 g/l High, switching possible

difficult to switch Process control and reproducibility

Limited ( flow speed, mixing, temperature only

Possible w ithin cer tain tolerances

by pond depth) Weather dependence

High (light intensity, temperature, rainfall)

Medium (light intensity, cooling required)

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Star t-up

6 – 8 weeks

2 – 4 weeks

Capital costs

High ~ US$100 000 per

Very high ~ US$250 000

hectare

to 1 000 000 per hectare (PBR plus suppor ting systems)

Low (paddle wheel, CO2

Operating costs

addition)

Higher (CO2 addition, oxygen removal, cooling, cleaning, maintenance)

Harvesting cost

High, species dependent

Lower due to high biomass concentration and better control over species and conditions

Current commercial

5 000 (8 to 10 000) t of

applications

algal biomass per year

Limited to processes for high added value compounds or algae used in food and cosmetics

Source: Adapt ed from [47]

2.4 Algae Synthesis The interest in microalgae for oil production is due to the high lipid content of some species, and to the fact that lipid synthesis, especially of the non-polar TAGs 9, which are the best substrate to produce biodiesel, can be modulated by varying growth conditions. The total content of lipids in microalgae may vary from about 1–85% of the dry weight

[46]; [55]; [56],

with values higher than 40% being typically achieved under

nutrient limitation. According to

[57]-[60],

factors such as temperature, irradiance and, most markedly, nutrient availability have

been shown to affect both lipid composition and lipid content in many algae. In general, high irradi ances

9 TAGS – triacylglycerides are molecules comprised of three long chains of fatty acids attached to an individual glycerol molecule

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stimulate TAGs accumulation while under low irradiances; mainly polar lipids structurally and functionally associated with cell membranes are synthesized. Since the late 1940s, when Spoehr and Milner

[56]

demonstrated that a nitrogen starved Chlorella

pyrenoidosa culture was able to accumulate up to 85% lipid in its biomass, while the typical content of exponential cultures was only about 5%, nutrient (particularly nitrogen and silicate) deficiency has been regarded as the most efficient approach to increase lipid content in algae

[61].

Increases of lipid content up

to 70% of the dry biomass have been reported with several species in response to limiting nitrogen supply in batch cultures

[55], [59], [60] .

However, large variability exists in the response to nitrogen deficiency.

Generally, diatoms, which have relatively high log-phase lipid content, do not respond to nitrogen starvation by increasing their lipid content

[62], [63].

Green microalgae show a variety of responses, from several fold

increases from log-phase values to no change or even a slight reduction [55]. Within the same genus some strains were found to accumulate starch under nitrogen starvation, whereas others accumulated prevalently neutral lipids [59]. When nitrogen deprivation is imposed upon a culture exposed to suitable irradiances, photosynthesis continues, albeit at a reduced rate, and the flow of fixed carbon is diverted from protein to either lipid or carbohydrate synthesis [53]. While carbohydrate may reach above 70% of the dry biomass without reduction in productivity, lipid accumulation is often associated to a reduction in biomass productivity. 2.5 Algae Harvesting Technologies The ease in harvesting algae depends primarily on the organism's size, which determines how easily the species can be settled and filtered. Microalgae concentrations always remain very low while growing, typically 0.02 percent to 0.05 percent dry matter in raceways and between 0.1 percent and 0.5 percent dry matter in tubular reactors 10

[64].

The average length of most algae species are measured in micrometers.

These two aspects make the harvesting and further concentration of algae difficult and therefore expensive. Harvesting has been claimed to contribute 20–30 percent to the total cost of producing the biomass [65]. In order to reduce the cost of production, concentrating the algal biomass to a water content that is low 10

This means 1 tonne dry biomass has to be recovered from 200 m3 to 5000 m3 water.

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enough for oil pressing is essential. Thus, it is necessary to maintain an effective interaction between the development of harvesting technologies and the selection of algal species for mass culture

[66].

A short review of the main harvesting methods for microalgae is presented in the subsequent section: 2.5.1 Settling & Sedimentation: Settling is widely regarded as the most technically simple method of harvesting algae streams. Once a day the settling pond is filled with a fully grown algae culture and drained at the end of that day, leaving a concentrated biomass volume at the bottom, which is stored for further processing

[36].

Thus, about 85

percent (and up to 95 percent) of the algal biomass was found to be concentrated in the bottom of the pond at 3 percent dry matter [67], although this will depend on the species used. Settling pond require significant additional space. See figure 12.

Fig. 13: Scaled model of algae farm with raceways and settling ponds [67]

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2.5.2 Filtration Filtration is another method of separating algae from the in-situ growth environment. It is usually carried out commonly on membranes of modified Cellulose with the aid of a suction pump. Several options have been described by researchers, including different materials, vacuum, pressured and rotating filtering. Some acceptable results have been obtained for colonial microalgae, but not for unicellular species

[36], [65].

One

involves the use of a reverse-flow vacuum in which the pressure operates from above, making the process easier whilst avoiding the packing of cells [66]. This method itself has been adapted to allow concentration of high water volumes in relatively short time11. A second process uses a direct vacuum but involves a stirring blade in the flask above the filter which prevents the particles from settling at all during the concentration process [68]. Filtration is considered as advantageous because it can be employed as a concentrating device and is able to collect microalgae or cells of very low density. However, concentration by filtration is limited to small volumes and leads to the eventual clogging of the filter by the packed cells when vacuum is applied

[66].

2.5.3 Centrifugation Centrifugation is a procedure of separating algae from the medium with the use of a centrifuge. It is often used for the concentration of high-value algae, and generally considered expensive and electricity consuming; although subsequent advancements in technology may prove it to be useful on a commercial and industrial scale [66], [69]. The procedure involves the concentration of high-density, small unicellular algal cultures in a centrifuge [89]. Products such as aluminium sulphate and ferric chloride cause cells to coagulate and precipitate to the bottom or float to the surface. The algal biomass is recovered by removing the uppermost part of the cells from the surface. Continuous-flow centrifugation with the classical Foerst rotor is a widely employed. This method is reasonably efficient, but sensitive algal cells may be damaged by pelleting against the rotor wall and the

11

20 litres to 300 ml in 3 hours

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A Roadmap to Commercially Viable Algae-Biofuel Production

method is essentially unselective

[66];

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all particles with a sedimentation rate above some limiting value will

be collected, although the integrity of the recovery rate emerge as questionable.

Fig. 14: Flow chart of the Centrifuge harvesting process. Adapted from [41], [67]

The Aquatic Species Programme estimated the costs for centrifugation at 40 percent of production cost and 50 percent of investment cost

[2].

However, applying centrifugation as a secondary harvest method, to

concentrate from 1-5 percent dry matter to 15-20 percent would reduce centrifugation costs at least 50 times [36]. Benemann recommends in Sazdanoff‘s report

[67]

to use centrifugation after pond settling, and a

specific centrifuge with acceptable energy consumption is mentioned. See fig.15:

Fig. 15: Alfa Laval CH-36B GOF Separator Centrif uge [36]

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2.5.4 Flotation Froth flotation is a method whereby the water and algae are aerated into froth, with the algae then removed from the water. Levin et al [70] developed a highly efficient froth flotation procedure for harvesting algae from dilute suspensions. The method is not dependent on the addition o f flotants. Rather, harvesting is done in a long column containing the feed solution which is aerated from below. A stable column of algae foam is generated and harvested from a side arm near the top of the column. According to Levin et al, the cell concentration of the harvest as a function of PH, aeration rate, aerator porosity, feed concentration, and height of foam in the harvesting column. The economic aspects of this process seem favourable for mass harvesting of algae for food or other purposes. Gotaas and Golueke further emphasized the notion in an experiment they carried out in

[71]:

the froth flotation harvesting process

concentrates the product to a point necessary for economical drying. Thus, the froth flotation process is highly rated as a commercially viable method and has been applied to large volumes of fluid processing procedures. 2.5.5 Flocculation Flocculation is a method of separating algae from the medium by using chemicals to force the algae to form lumps [66]. Flocculants are described as chemical agents that cause colloids and other suspended particles in liquids to form aggregates. Alum and ferric chloride are chemical flocculants used to harvest algae

[68].

This procedure has some limitations, chief among which is the difficultly in separating the algae from the added chemicals. Also, interrupting the flow of CO 2 to the system can cause algae to flocculate on its own without control. As a result, the procedure can hardly be classified as economically viable. 2.6 Algae Biofuel Conversion Technologies The selection of conversion processes largely depend on the specie of algae biomass feedstock used; the harvesting procedure; and the desired end-process product. Other determining criteria are usually water content and chemical composition of the biomass

[72].

Energy requirements and efficiency are determined

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Fig 16: Biomass for fuel applications—ranges of moisture content [94]

First indication for conversion efficiency12 is given by the enthalpy of reaction in table 2. Posten [73], posits that biotechnological conversion processes generally have higher efficiencies than chemical conversion processes. Thus, a combination of biomass growth yield and conversion efficiency leads to overall yields of upgraded fuels per unit ground area.

Table 2: Idealiz ed formulation of photo biological and chemic al reactions for fuel generation and related enthalpy changes. Based on empiric al correlation for heat of combustion (Eq. (1)) with H2O liquid. Adapted from [73].

Microalgae are known to have high water contents in the range of 80– 90%

[74];

therefore, not all energy

conversion processes of biomass can be applied to microalgae. For example, direct combustion of microalgae can be used to convert algae biomass with moisture content below 50% 12

[72].

ratio heat of combustion of product versus raw material

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The energy conversion reaction of biomass can be classified into biochemical, thermochem ical and direct combustion [75-76]. Biochemical conversion can be further subdivided into fermentation, anaerobic digestion, bio-electrochemical fuel cells and other fuel producing processes utilizing the metabolism of organisms. Thermochemical conversion processes are further classified as gasification, pyrolysis and liquefaction

[72].

Fig. 15 shows the energy conversion processes from microalgae. Biomass can also be converted into three main products: two of them related to energy and one as a chemical fe edstock [77]. A review of the algae to energy conversion pathways, case studies & research is presented, with specific emphasis on the production of hydrogen, methane, ethanol and syngas from algae.

Fig. 17. Energy conversion processes from microalgae. Adapted from [72], [77]

2.6.1 Thermochemical Conversion Thermochemical conversion process includes a number of proven pathways of converting biomass feedstock into biofuel and chemicals. These are discussed in detail in the subsequent sections: 2.6.1.1. Gasification Gasification is a term that describes a chemical process by which carbonaceous materials (hydrocarbon) are converted to a synthesis gas by means of partial oxidation with air, oxygen and/or steam at high temperatures, typically in the range 800 – 900C [75].

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A flow diagram of an algae fuel production system by low temperature gasification of biomass, as proposed by Tsukahara et al [75] , is presented in Fig. 16:

Fig 18: Flow diagram of a microalgal system for fuel production by gasification [75]

Minowa et al

[78]

also proposed a novel energy production system using microalgae with nitrogen cycling

combined with low temperature catalytic gasification of the microalgae. Elliot

[79]

developed a low

temperature catalytic gasification of biomass with high moisture content. In this process, algae biomass with high moisture is gasified directly to methane rich fuel gas without drying. 2.6.1.2 Liquefaction Microalgae cell precipitates which are of high moisture content and derived from centrifugation, are considered as good raw materials for the liquefaction conversion process [80]. In a study conducted by Patil et al [74], and [80] – [84], direct hydrothermal liquefaction in sub-critical water conditions is a technology that can be employed to convert wet biomass material to liquid fuel.

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The separation schematic is presented in Fig. 19:

Fig 19: Separation scheme for liquefies microalgal cells. Adapted from [74], [80] – [84].

The liquefaction is performed in an aqueous solution of alkali or alkaline earth salt at about 300 C and 10 MPa in the absence of a reducing gas such as hydrogen or carbon monoxide. Dichloromethane is used to separate the oil fraction from the algae biomass. The dichloromethane extract was filtered from the reaction mixture, following which the residual dichloromethane is filtered and evaporated at 35 degrees under reduced pressure [84]. 2.6.1.3 Pyrolysis Pyrolysis is conversion of biomass to biofuel, charcoal and gaseous fraction by heating the biomass in the absence of air to around 500 C [77], or by heating in the presence of a catalyst. Earlier studies adopted the slow pyrolysis system and the conversion was done at a low heating rate and a longer residence time.

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The main advantage of fast pyrolysis is that it can directly produce a liquid fuel

[85].

If flash pyrolysis is used,

the conversion of biomass to bio-crude with an efficiency of up to 80% is enabled. A schematic of a fluidized bed, fast pyrolysis system is shown in Fig. 20:

Fig. 20 . Schematic of fast pyrolysis process principles. Adapt ed from [85].

Since algae usually have high moisture content, a drying process requires much heating energy

[103].

Microalgae are subjected to pyrolysis in the fluid bed reactor [72]. The products are then separated into char, biofuel and gas. 2.6.1.4 Hydrogenation Hydrogenation is a reductive chemical reaction that results in an addition of hydrogen (H 2), usually to saturate organic compounds

[72].

The process consists of the addition of hydrogen atoms to the double

bonds of a molecule through the use of a catalyst

[86].

The FAO

[80],

performed an algal hydrogenation

procedure by using an autoclave under high temperature and pressure conditions in the presence of a catalyst and a solvent.

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Fig. 21. Apparat us used for hydrogenation within an autoclave [80].

Algae can be converted to liquid hydrocarbons at temperatures between 400 and 430 degrees and operating pressures of about 7–14 MPa in the presence of a cobalt molybdate catalyst [72]. The highest oil yield obtained was 46.7 wt% on the basis of algae charged. In addition, up to 10 wt% liquid products and 34 wt% hydrocarbon rich gases were obtained. The oil yield and the degree of conversion also increase proportionally with hydrogen pressure to a maximum of about 8.2 MPa, and is then leveledl off

[80].

Satin [76],

reported that with high temperature, pressure, the hydrogenation process resulted a liquid hydrocarbon yield of up to 50% . 2.6.2

Biochemical Conversion

Biochemical conversion employs the use of the enzymes in bacteria and other micro -organisms to break down biomass. Two processes – fermentation and transesterification - that can be applied to algae biomass are briefly reviewed in the next two sub-sections:

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2.6.2.1 Fermentation Fermentation is common feature in some countries with the infrastucture to produce ethanol from sugar crops and starch crops. In a widely adopted procedure, enzymes act on the biomass while converting the starch to sugar. The sugar is subsequently converted to ethanol by yeast enzymes. Mckendry [77] described the purification process of ethanol by distillation as an energy intensive step. The principle of ethanol production from microalgae is further illustrated in Fig. 20. It consists of microalgal cultivation, algal cells‘ harvest, slurry preparation, fermentation and ethanol separation process

[87].

Production of ethanol by using microalgal as raw material can be performed according to the following procedure put forward by Amin

[72]:

first the microalgae starch is released from the cells with the aid of

mechanical equipment or an enzyme. Following cell degradation, Saccharomycess cerevisiae yeast is added to the biomass to begin the fermentation process; the product of fermentation is ethanol; the ethanol is then drained from the tank and fed into a distillation unit. Ueno et al

[88]

investigated ethanol production via dark fermentation by the marine green algae

Chlorococcum littorale. Under dark anaerobic conditions, 27% of the cellular starch was consumed within 24hrs at 25 degrees centigrade, the cellular starch decomposition being accelerated at higher temperature. Ethanol, acetate, hydrogen and CO2 were the end products. The maximum productivity of ethanol was 450 lmol/g-dry weights at 30 degrees.

Fig. 22. Ferment ation process of microalgae [87]

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2.6.2.2 Transesterification Amin [72] defined transesterification as ‗a process of exchanging the alkoxy group of an ester compound by another alcohol‘. In a study put forward by Agarwal [89], the reactions were catalyzed by an acid or a base , using a homogeneous or heterogeneous catalytic process .

Fig. 23 shows the schematic process of biodiesel production [93].

The conversion of triglycerides or oil to biodiesel can achieve 98%

[90]

or greater than 98%

[91]

as an

alternative fuel for diesel engines. The results of the biodiesel product should be q uite similar to those of conventional diesel in its main characteristics or compatible with conventional petroleum diesel, and it can also be blended in any portion with petroleum diesel [72]. 2.7 Current Algae Development Initiatives in the EU and res t of the world The European Biodiesel Board - promotes the use of biodiesel in the European Union, at the same time, grouping the major EU biodiesel producers. The aim of the European Strategic Energy Technology Plan (SET-Plan) is to match the most appropriate set of policy instruments to the needs of different technologies at different stages of the development and deployment cycle

[92].

It will therefore address the entire algae biofuel innovation process from basic

research to market uptake. This section conducts a brief tour of some of the EU countries and the current algae development initiatives being undertaken by governments and the private sector.

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2.7.1 United Kingdom 

The Carbon Trust recently announced a project to make algal biofuels a commercial reality by 2020. An estimated £26m will be spent on developing the technology and infrastructure to ensure that algal biofuels replace a significant proportion of the fossil fuels used by UK drivers



[93].

An EU funded ‗Biomara‘ project was recently launched in Scotland. The BioMara project will investigate both macroalgae and single-celled microalgae as potential sources of biofuel. The project includes a ‗techno-economic evaluation of potential systems, environmental impact assessment and an ongoing process of stakeholder engagement to ensure that the ultimate findings of the research have wide applicability‘ [94].

2.7.2. Spain In 2007 Aurantia - a renewable energy firm based in Spain - and Green Fuel Tech (Massachusetts, USA), joined forces to produce algae oil. Their $US92 million project will eventually scale up to 100 hectares of algae greenhouses producing 25,000 tons of algae biomass per year [95]. The plant will obtain its CO2 from a cement plant near Jerez, Spain. 2.7.3 Italy Eni the Italian Energy Company have a 1 hectare pilot facility in Gela, Sicily. The project will investigate the viability of a new photo-bioreactor systems as well as open ponds. 2.7.4 Germany

RWE has launched a pilot algae biofuel production plant at Niederaussem, Germany. The energy firm is workings with partners such as the Jacobs University, Bremen, the Juelich Research Center and Phytolutions for the planning, research and implementation of the project [96].

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2.7. 5 France

Air France-KLM recently signed a deal with Algae Link13 to procure algae oil for jet fuel blending - May, 2008 - In the Netherlands, Air France- KLM announced an agreement with Algae-Link to procure algae oil to be blended with conventional jet fuel. 2.7.6 China

The Chinese government is working in partnership with Algae LLC, a subsidiary of California -based BioCentric Energy Inc, to develop an algae oil project in the Guangdong Providence of China

[97].

2.7.7 Australia

Australian based firms, Linc Energy and Bio Clean Coal have embarked on a joint venture to develop an algae-based biodiesel plant using CO2 emissions from coal-fired electricity generation. This is the first reported expansion of algae-based Biodiesel production to Australia. 2.7.8 USA ExxonMobil has launched a new program to research and develop next-generation algae. As part of the programm, ExxonMobil Research and Engineering Company will partner with Synthetic Genomics, Inc to develop, test, and produce biofuels from algae. 2.8 Summary of Review

A review of published analyses of microalgae systems and applications has been presented. It should be noted that comparisons in literature are generally difficult to make, largely due to the variations arising from the optimistic dimensions they tend assume. Nevertheless, one key conclusion can be drawn from this review: the fact that many different fuels and chemicals can be produced from algae including biodiesel, ethanol, jet fuel and synthetic fuels. However, it is crucial that these products maintain compatibility with 13

AlgaeLink N.V. is a Dutch Company that designs and manufactures algae growing equipment.

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existing refining and transportation infrastructure. Thus, the review establishes the need to prove the viability of algae concepts in more concrete terms. More information is needed on the economics of the process: optimized costs of the different inputs, but also the market value and market size of the outputs. The next section will attempt to highlight a number of economical viability pathways that were considered on this project, and the sustainable algae projects that can be deployed through such measures.

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Chapter 3 3.0 Algae Production Systems: Strategies to Commercial Viability The economics of biofuel production from algae biomass demands that the entire process of cultivation, harvesting and conversion be organized as efficiently as possible. It is possible to achieve this if a summary of the best practical fuel production options discussed previously can be employed in concert with each other. The roadmap to economic viability should integrate elements of the most plausible microalgae R&D programs which are identified as follows: CO2 capture and abatement via CHP plants and waste water treatments, DNA and algae strain modifications for improved yields, bioremediation of municipal sewage and contaminated land, co-production of higher value products, cheaper and higher efficiency harvesting technologies. These processes are discussed in this section. A conceptual model that implements and links all the processes in a joint, sustainable framework is also developed. 3.1 Algae-based CO2 Sequestration CO2 is the main carbon source for photosynthesis for all plants including algae. Algae sequestration technology is unique in its ability to produce a useful, high-volume product from waste CO 2 [2]. The amount of CO2

captured by algae varies per species, but in general about 1.8 tonne CO 2 is integrated in 1 tonne algal biomass

[46].

Thus, all carbon required for algal biochemical conversion can be obtained directly from

Greenhouse Gas CO2 through various sources. Algae production sites are considered most effective when they are situated close to areas where CO 2 supply is readily and sustainably available. Since CO2 represents a considerable part of the running costs, this requires maximizing productivity by such processes, as measured by CO 2 capture that could help defray part of the costs while also providing additional greenhouse gas credits [98]. 42

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Growing algae next to CO2 presents an interesting opportunity for companies that produce large CO 2 emissions. Many countries of the world that are signatories of the Kyoto Protocol have an existing carbon credits and trading program. This implies that for power plants and other entities that are large scale emitters of green house gases, CO2 sequestration using algae provides the benefit of monetizing the carbon credits while at the same time producing biofuels. Already, a number of companies and R&D laboratories have developed pilot projects in open ponds that employ CO2 from industrial emissions and wastewater treatments for algae cultivation. So far, the main considerations seek to address the location of the ponds - as they should be in proximity to the CO2 generating source - and also the solubility of the flue gas components in water. The target is carbon dioxide, but the solubility of other elements14 is should also be put into consideration. 3.1.1 Algae CO2 Capture from Power plants Electrical power plants account for up to one-third of the emissions in developed countries

[99].

Power-plant

flue gas can serve as a source of CO2 for microalgae cultivation, and the algae can be co-fired with coal. CO2 capture from fossil-fuel power-plants has been considered as a potential remediation option since Marchetti [100] first proposed the disposal of the captured CO 2 in the deep ocean. Several investigators have since studied a plethora of options for CO 2 capture from power plants. Among these, the direct blowing method and the MEA15 are commonly employed [99]. More recently, others have also confirmed that flue gas can be used to grow algae without harmful effects [101], [102],

and at least one commercial algae cultivator on Hawaii is using CO 2 from a small power plant [103].

In addition, dissolved Nitrogen oxide can be used by algae as a nitrogen source. The amount of flue gas needed per hectare varies depending on the specie of algae, and will also vary throughout the day with light intensity and temperature; and thus needs to be optimized for each specific application. High dissolved concentrations of CO2 will affect the PH and thus needs to be buffered. Also, extra CO 2 can be sequestered by growing algae that produce hard scales around their cells, made of calcium carbonate [104]. 14 15

Sulfur oxides, nitrogen oxides, oxygen, etc. M EA refers to the M onoethanolamine Absorption Process

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A conceptual CO2 recovery-cost model in the context of microalgae cultivation using flue gas emitted by a typical 50 MW power plant was derived by Kadam

[105].

This model assumed a transportation distance of

100km and night storage of CO2 in the pipelines. The standard process includes MEA extraction, compression, dehydration, and transportation to the ponds, and produces a gas that is almost 100% CO 2. To evaluate if the flue gas could be directly utilized, Kadam

[105]

devised an alternative procedure which

only includes compression, dehydration, and transportation to the ponds. This option delivers CO 2 to the ponds at an average concentration of about 20%. A detailed flow diagram for the MEA process as given by Kadam

[105]

is presented in Fig. 22. In the

schematic, the primary pieces of equipment are the absorber and stripper columns, together with the associated piping, heat exchange, and separation equipment. The comparison of processing options in the above study showed that the MEA extraction was less expensive than the direct pumping option as the latter procedure attracts a considerable levy due to local CO2 mitigation laws

[99].

Fig. 24: A simplified flow diagram for microalgae production using CO 2 capture from a power plant [105].

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3.1.2 Municipal Wastewater Treatment with CO 2 Conversion to Biofuels. Microalgae have a quality of higher stability, which makes it proactive in more concentrated and toxic environments.

Municipal wastewaters are often treated in many countries with systems that are commonly referred to as oxidation ponds. Benemann

[98],

described the ponds as ‗relatively deep and not mechanically mixed‘.

According to the study, ‗the main function of the microalgae is to produce dissolve d Oxygen, required by the bacteria that break down the organic wastes. As such, a state of "secondary" treatment is achieved through the reduction of biological oxygen demand. Other advanced microalgae wastewater treatment processes use raceway ponds that produce much more algal biomass per unit area, and thus also more Oxygen, thereby allowing higher loadings 16. In both cases a fundamental problem of high cost algae harvesting using chemical flocculants applies

[98].

Harvesting using "bioflocculation" processes17 have been demonstrated with pilot-scale high rate wastewater ponds [106]. The removal of nutrients from wastewaters to achieve tertiary treatment levels has the greatest potential for applications of microalgae in wastewater treatment

[25].

This is because nutrient

removal with conventional technologies is considered to be more expensive, while microalgae can remove nutrients at little additional costs above secondary treatment [25]. [98], [106], [107]. CO2 additions would dramatically improve the algal cultivation process in high rate wastewater treatment ponds by greatly increasing productivities and process reliability, including harvesting through bioflocculation. The harvested algal biomass would be most plausibly subjected to anaerobic dig estion and the biogas used to produce electricity [107]. CO2 fertilization also allows somewhat better adaptation to seasonal variability in productivity, because N and P levels in algal biomass can be varied significantly. Most fundamentally, CO 2 fertilization results in a more stable pond environment, allowing cultivation of specific algal cultures, a major R&D objective of this

16 17

Refers to volume of wastewater applied per hectare per day A procedure in which algal cells settle spontaneously

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roadmap. A CO2 fertilized wastewater treatment high-rate pond system would have a much smaller footprint18 than present pond architectures that achieve only secondary treatment levels. A schematic of a proposed 3 stage system is illustrated in Fig. 23. In the proposed CO 2-supplemented wastewater treatment process adapted from

[98],

the outputs are reclaimed water, biogas fuels and

anaerobic digester residues. The latter can be applied on agricultural soils, although it would be classified as bio-solids and does not qualify as an organic biofertilizer. Municipal wastewaters have limited applications in the production of additional co-products. However, the business case for municipal wastewater treatment using high rate pond processes are expected to be favourable, in comparison to conventional secondary processes and would be even more favourable for tertiary treatment

[25]; [108].

Fig. 25: Process Schematic for Tertiary Wastewat er Treatment with Microalgae. Adapted from [66], [98].

18

Refers to the land area requirements.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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In summary, supplying CO2 to wastewater treatment ponds will introduce a number of benefits, including advanced treatment, smaller footprint, and greater greenhouse gas abatement

[109].

The reclaimed water

can also be used for production. 3.2 DNA and algae strain modification Current research has identified more than 100,000 known strains of microalgae in the world

[2].

The

challenge is to identify the best strain for biofuel production. A Shell research program involving several universities is looking for the strain with a winning combination of high oil content and a rapid growth rate [45], [103].

Algae reproduce by dividing their cells and algae with high oil contents are known to grow relatively

slowly. For example, algae containing 80% oil will only divide once every 10 days, whereas algae containing 30% oil may divide three times daily [110]. Some strains capable of producing large amounts of high grade lipids are more susceptible to higher production rates when they are starved of nutrients

[45];

although nutrient

starvation is considered as one of the factors that inhibit algae cell growth. Nevertheless, recent research [55]–[60] ,

has made a case for genetically modified algae as a favoured option in biofuel production. Other

researchers: [29], [45], [111]-[117], have also investigated the possibility of developing a yellow algae strain that will allow for deeper light penetration into ponds, thus promoting uniform growth. Two possible strain modification approaches to rapid commercialization of algae -based biofuel on a large scale are discussed in this section. 3.2.1 Algae Genetic transformation technologies Genetic transformation requires temporary permeabilization of the cell membrane in order to allow exogenous DNA 19 molecules to enter the cell

[29].

During a successful transformation event, a DNA

fragment is incorporated into the cell‘s nuclear or chloroplastic genome and the cell remains viable 19

Deoxyribonucleic acid (DNA) is a nucleic acid that contains the genetic instructions used in the development and functioning of all known living organisms and some viruses. The main role of DNA molecules is the long-term storage of information. DNA is often compared to a set of blueprints or a recipe, or a code, since it contains the instructions needed to construct other components of cells, such as proteins and RNA molecules. The DNA segments that carry this genetic information are called genes, but other DNA sequences have structural purposes, or are involved in regulating the use of this genetic information[132].

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A Roadmap to Commercially Viable Algae-Biofuel Production

afterward

[118];

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however, most cells die as a result of cell membrane rupture. Even if the organism survives

the initial wound, the exogenous gene may be recognized as foreign and become degraded

[29].

Furthermore, the positioning of the DNA fragment within the genome is arbitrary, which accounts for varying degrees of expression

[111] .

Researchers have recently shed light on this obstacle with the

discovery of microRNA 20 gene regulatory systems in unicellular algae

[141].

Clearly, molecular approaches

toward evading transgene complications will be an important step in the metabolic engineering of algae. There are several techniques currently available for genetic transformation of microalgae: the simplest method involves agitating algal cells in a mixture of glass beads and DNA molecules

[113] .

The excitation

levels of the cells are manipulated with sufficient velocities to puncture the cell membrane upon collision. Algae strains without a cell membranes can be altered with this technique; however, micron21 long silicon carbide whiskers have been used to perforate cell walls [29],[114]. Although the field of microalgal genetic engineering has advanced significantly over the past decade, routine and successful transformation has only been achieved in a few algal species. Nevertheless, it is an important consideration in the expanding demand for microalgal biofuel commercialization. 3.2.2 Manipulating Microalgal Metabolism The processing capabilities and synthesis of microalgae biofuel products can be induced by manipulating its metabolic pathways. Induced metabolism is a procedure which employs specific environmental factors, such as nutrient regimens to coerce microalgae into desired flux states

[29].

Metabolic engineering allows

direct control over the organism‘s cellular machinery through genetic mutation.

20

microRNAs (miRNA or μRNA) are single-stranded RNA molecules of 21-23 nucleotides in length, which regulate gene expression. miRNAs are encoded by genes from whose DNA they are trans cribed but miRNAs are not translated into protein (i.e. they are non-codi ng RNAs); instead each pri ma ry trans cript (a pri-miRNA) is processed into a short s tem-loop structure called a pre-miRNA and finally into a functional miRNA. M ature miRNA molecules are pa rtiall y complementa ry to one or more messenger RNA (mRNA) molecules, and their main function is to down-regulate gene expression. They were first described in 1993 by Lee and colleagues in the Victor Ambros lab, yet the term microRNA was only introduced in 2001 in a set of three articles in Science[112],[133] . 21

1 mm equals 1000 microns

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A Roadmap to Commercially Viable Algae-Biofuel Production

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Fig 26: Commercially important metabolic pathways in microalgae. This schematic representation depicts sim plif ied cellular pathways involv ed in the biosynthesis of various products derived from mic roalgae. Alt hough the chloroplast can act as a factory for protein and hydrogen production (solid blue), the nucleus plays a fundamental role in metabolic control (dotted red). Both of these organelles contain individual genom es, whic h offer the possibilit y for independent transgene incorporation (dashed blue and red). Adapted from [29].

Another technology worth consideration is the Quantum Fracturing approach proposed by researchers at Origin Oil. The procedure allows the breakdown of carbon dioxide, water, and nutrients to the micron level, referred to as micro-bubbles. The nutrition bubbles are then introduced to the algae, allowing for instant and even absorption [119].

Fig 27: Quantum Fracturing approach. Adapted from [119]

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A Roadmap to Commercially Viable Algae-Biofuel Production

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The altered metabolism state allows for faster absorption of nutrients, especially CO 2. This directly impacts on the growth pace and will amount to huge savings in cost and time. 3.3 Low Cost Harvesting Cost-effective and efficient harvesting presents one of the major bottle -necks to the expansion of most microalgal biomass applications. For this reason, several research efforts have been devoted to the development of suitable technologies for a reliable, low-cost harvesting. Though most of the technical R&D issues have been resolved, the handicap still remains the incompatibility between the efficiency of the proposed methods and their cost-effectiveness [106]. The most successful techniques are centrifugation, filtration and flocculation – based on the review in chapter 2. However, in practice, a combination of techniques is often used to pre -concentrate the algae. As previously discussed in the literature review, both procedures are generally expensive, and are known to be energy intensive and usually cost about 300pounds/tonne of biomass

[98].

However, such processes are

considered unrealistic from a GHG abatement perspective. While research is still ongoing in this regard, flocculation or flotation appears to be the most suitable option. Spontaneous flocculation of algal cells after being removed from the mixed pond environment, followed by settling of the flocs, is likely the lowest-cost harvesting procedure

[36].

Costs is dependent on the time

required for flocculation and other floc settling velocities, but even the most sceptical assumptions allow for low-cost projections. The challenge is to control the bioflocculation process to be both reliable and effective

[106].

This could lead

to over 95% recovery of biomass. Alternative low-cost harvesting methods, such as harvesting filamentous algae with screens can also be considered. One of such is a unique algae harvesting extraction system designed by researchers at Origin Oil.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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A design of the low cost method is presented below:

Fig. 28: Single step algae extraction technology model [119]

It is a one-step procedure that combines a quantum fracturing technology with PH modification and electric pulses to break down the algae cells and release the oil, gravity is then used to separate the water from the oil and the biomass [119]. 3.4 Co-products from Microalgae Biofuel Production In the above-described processes, biofuels, wastewater treatment, reclaimed water, biofertilizers and animal feeds were the products and co-products resulting in greenhouse gas abatement. The possibility of combining biofuels production with large volume/higher value (higher than biofuels) co products presents an interesting alternative for the industry. Such coupling may in fact satisfy eco nomic requirements. The challenge is to identify a stream of co -products with sufficiently large markets to allow for significant greenhouse gas abatement and of high enough value to sustain in an economically viable process. 51

A Roadmap to Commercially Viable Algae-Biofuel Production

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Asada et al [120], among others, explored the possibility of producing bioplastics, such as the PHA22 based polymers, currently being produced commercially, and used as storage compounds in many bacteria, including cyanobacteria which contain up to 10% of PHB23. Other biopolymers of commercial interest are polysaccharides used as flocculating, dispersing and gelling agents in food and industrial applications. For example, carrageenans 24 are generated from red microalgae [98].

Biopolymer co-products from algae can easily replace synthetic products derived from fossil fuels.

Fig 29: A scheme of selected algae co-products [121]

Another area of potential development for microalgae is the extraction of pharmaceuticals. Several authors have conducted a variety of research in this area and the possibilities are far reaching. Other valuable compounds of interest for the food industry which may be produce d from microalgae include other nutraceuticals such as sorbitol, mannitol, and cyclohexanetetrol, bio -emulsifiers and various low molecular weight metabolites, e.g. amino acids [122]. Nonetheless, the main benefit of such co-products would be to improve the overall economics of the algae production processes. Unlike Algae biofuels, co-products need not be generated in larger quantities, and they are usually expensive in the marketplace. Bioplastics and functional polysaccharides would be valued at over $7,000 /tonne, compared to less than $100 /tonne for biofuels obtained from algal biomass [98].

22

Polyhydroxyalcanoate Polyhydroxybutyrate 24 Carrageenans are a family of linear sulphated polysaccharides extracted from red seaweeds. 23

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A Roadmap to Commercially Viable Algae-Biofuel Production

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The R&D need is to identify specific co-products, develop algal strains with high co-product yields and demonstrate their mass culture. This approach, and challenge, is similar to the biorefinery concepts for the conversion of starch and sugars from conventional crops into fuels, feeds and higher value co-products. 3.5 Implementing an Integrated Production Strategy The network strategy developed in this chapter aims at making the best use of the algae raw material; conducting and linking the production processes as efficiently as possible to minimize waste and costs. The strategies can be realized by employing a host of cost-effective technology and by applying new innovational approaches in various stages of microalgae production. Fig. 30 shows the pictorial view of large-scale microalgae productions facility which runs on a combined production cycle strategy:

Fig. 30: Coyote Gulch Demonstration Facility is the first of its kind anywhere in the world. It is located in southwestern Colorado near the city of Durango [121].

The Coyote Gulch Demonstration Facility incorporates an integrated strategy similar to the model that has been proposed in this dissertation. The facility employs the use of wastewater generated during coal-bed methane production in the photo-bioreactors thus reducing the need for fresh water. Also, CO2 produced by the amine plant is recycled to feed the microalgae. The amine plant benefits by cost-effectively managing 53

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its excess waste water and reducing its CO 2 emissions while at the same time producing biofuel o n nonarable land.

Fig. 31: Schematic model of an integrated production process. Adapted from [123]

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3.6 Chapter Summary If adopted, the measures proposed in the integrated model will help reduce the green house CO 2 emission, cost of production, waste amount and use of nitrogen fertilizers, whilst improving the biofuel quality and its competitiveness in the market. Including an integrated operation model will provide an adequate response in addressing industry wide concerns about high production costs and other sustainability issues.

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Chapter 4 4.1 Techno-economic modeling and analyses of Algae biofuel production Techno-economic modeling is a critical element used in determining the best estimates for current cost of algal biofuel production and the most viable route to commercialization. However, modeling for algal biofuel production can be extremely complicated. The situation arises because of a wide variety of alternative approaches to cultivation, harvesting and extraction, being put forward by various researchers. These approaches contain different assumptions about input costs, byproduct values and expected revenue streams. Again, the availability of essential resources like sunlight, land, CO 2, and water, tend to vary significantly across the world and models must take these variations into account. It is necessary to add that current techno-economic models are largely developed on the basis of assumption than on proven, concrete data. This results in huge variations in cost estimates and the uncertainty that prevails in the industry.

4.2 Methodology In this research, the techno-economic analysis is kept simple and transparent in order to facilitate reader re-evaluation using different scenarios. 4.3 Data Sources The economic model adopted for this analysis cuts across a spectrum of 50 independent variables, supported by detailed engineering specifications, commodity market data, and vendor quotes for equipment costs. The model relies on a generic baseline algae growth system and is not aligned to any specific technology. It is recognized that results could vary depending on the growth architecture selected and assumptions for algae productivity. Nevertheless, the general trends and economic commercialization priorities presented here are applicable to the broader algal biofuels community. The data sources are summarized in Appendix 1.

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A Roadmap to Commercially Viable Algae-Biofuel Production

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4.4 Issues for Techno-Economic Assessment & Evaluation Criteria A comparative analysis for commercially viable algae biofuel production is info rmed by the following set of criteria and objectives: • Minimize capital costs per unit of biofuel • Minimize operating costs per unit of biofuel • Maximize biofuel production yield • Minimize net GHG footprint per unit of biofuel produced • Maximize net energy balance via coupling of production systems • Minimize net water Usage • Minimize land footprint per unit of biofuel produced • Minimize time required to reach desired production volume • Minimize investment needed to reach desired production levels • Minimize waste by-products • Maximize the production quality and market potential of co -products

4.5 Cost Analysis The economics of microalgae systems are relatively sensitive to the varying estimates and assumptions made about revenues and costs, with the difference between the lowest and highest estimates approximately $60 per gallon of biofuel produced [107]. However, even with the most optimistic cost assumptions for algae production revenue from biofuels, it is still difficult to achieve realistic cost thresholds. Thus, a ‗biofuel only‘ production model will not achieve economic sustainability. The proposed model – as prescribed in Appendix 1 - should rely on an integrated approach that will incorporate additional revenue streams from wastewater applications, co-products and carbon credits from CO2 abatement.

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Fig 32: Algae biofuel production Cost Threshold. Adapted from [123].

Fig.32 shows major variations in capital, operations and maintenance costs. A number of operations have reported capital costs of about $10k/acre 25, while others have shown costs approaching $300k/acre. These wide variations in costs are also seen in O&M projections. For example, two research organizations Sandia National Laboratories and National Renewable Energy Laboratory - conducted an assessment of previously reported literature and concluded that average capital costs were roughly $57k/acre 26 of utilized surface area and corresponding annual O&M costs were $27k/acre [123]. It is difficult to accurately estimate the costs of algae production systems. This uncertainty has been driven by the following factors: (1) There are few large-scale commercial algae biofuels production systems with which to develop and substantiate the data. 25 26

One international acre is equal to 4,046.8564224 m2 The standard deviation for capital costs was estimated at a whopping $72k/acre while the deviation in O& M costs were reported as $25k/acre

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A Roadmap to Commercially Viable Algae-Biofuel Production

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(2) The few companies have successfully operated on commercial scale are very protective of their detailed financial data. (3) The immaturity of the market allows companies with unproven technologies to make aggressive and unrealistic claims. Fig. 34 illustrates the total cost breakdown for open and closed photo-bioreactors as estimated by Sandia National Laboratories. As the illustration shows, more than 60% of operating costs is channelled towards initial capital investment. According to the simulation, the total production cost average is calculated at $29.22/gal27 with an approximated cost range of $20/gal to $38/gal.

Fig. 34: Estimated cost breakdown of Algae biofuels. Adapted from [124].

4. 6 Algae Biofuel Economic Drivers Analysis The fact that algal biofuels present huge possibilities and a variety of options in dealing with the world‘s energy and climate problems is well documented in literature. With significant amounts of capital and effort being allocated to numerous algae start-ups/developments, the race is now on to develop the first 27

Imperial (UK) gallon ≈ 4.5 L

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A Roadmap to Commercially Viable Algae-Biofuel Production

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commercial-scale algal biofuels production system that can generate substantial investor returns and create a new transportation fuel infrastructure model [154]. Nevertheless, most researchers readily concede that the commercial viability of algal biofuel economics are extremely challenging, highly variable, and subject to dynamic, speculative, and volatile commodity markets. Thus, a deeper understanding of algal biofuel economic drivers will help in addressing the specific challenges of algae growth strains, harvesting and conversion technologies. The analysis presented here will provide a realistic baseline assessment of algal biofuel economic drivers and will be based on a model recently released by

[121], [125].

The model is based on a generic baseline

algae growth system; is not tailored to any specific technology, and is indicative of the general trends applicable to a broad section of the algal biofuels community. Results gleaned from the analysis have been consolidated and s implified into graphical form in order to convey key points are presented in the following sub-sections: 4.6.1

Operations and Maintenance Cost drivers

Fig. 35: Operations and maintenance Cost Driv ers [125]

Fig. 33 shows a consolidated set of operations & maintenance cost drivers and clearly indicates that utilities (electricity, water, etc.), CO2, maintenance of the algae growth system, labour, and nutrients have a larger 60

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bearing on operational costs. Utility costs accounted for more than 1/3rd of the estimated expenditure. However, when considering the amount of energy required transporting, handling and processing extremely large volumes of water and biomass material, along with considerable evaporative water losses, it becomes apparent why utilities are such a significant cost driver. The cost of CO 2 for this analysis assumes that it will have to be sourced from secondary sources, which may or may not be the case depending on project location strategies. 4.6.2 Capital Cost Drivers Capital costs represent a significant challenge in the algae biofuels production system. Estimates for algae system installation costs are prone to wide variations, with ranges of $10k /acre to $1000k/ acre

[125].

It is

necessary to quantify the total capital cost drivers for a baseline algae production system in order to focus research priorities in areas that would have a bigger impact. Fig. 34 illustrates the capital cost drivers for the baseline system:

Fig. 36: Capital Cost Drivers [125]

The graphic clearly illustrates that the algae growth system, water management, harvesting, extraction, and CO2 delivery infrastructure would have a huge impact on the capital costs. Harvesting and water management take the highest quota of capital expenditure; and it is closely followed by the growth strain 61

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system. These cost profiles could be scaled down if a coherent, integrated process is adopted. Also, obtaining the CO2 from power generating plants, as recommended in the proposed model, will diminish the capital costs further. 4.6.3 Revenue Drivers For this analysis, the envisaged revenue streams in the algae production process were categorized into three structures: biofuels, co-products and carbon credits. Fig. 35 shows that co -products, especially pharmaceuticals, hold the highest revenue earning potential in the mix. The market has developed gradually in the intervening years and the specialized products are constantly in high demand. The market demand for biofuel is also growing and many believe that the revenue potential is huge especially in the area of jet biofuels for airplanes.

Fig 37: Revenue Drivers. Adapted from [125]

Carbon credits also serve as a huge motivating factor, especially in Europe where renewable energy development initiatives are heavily incentivized. Nevertheless, realization of these algae revenue drivers will help in shaping the market priorities for the future.

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4.7 Economic Viability Lines for Commercial Algae Projects The key factor for investors in funding capital-intensive energy projects is the risk-return ratio of invested funds. This is always a major consideration for equity financiers regardless of the technological claims made by the industry scientists or the number carbon cred its available. An assessment of the risk-return ratio usually determines the viability of an energy project from a commercial point of view. On a general scale, these assessments are indicative of the capital, operations and maintenance costs. As previously discussed, the capital costs are usually categorized by costs associated with algae biomass growth, harvesting, dewatering, and algae oil extraction systems. In addition, there are a number of project costs that include licensing procedures, infrastructure preparation, installation and contractor fees

[5].

Operational costs usually include expenses for nutrients and CO 2 distribution, utilities, maintenance and labour costs. A new approach that formularizes what the capital and operation costs would need to satisfy the demands of those financing algae biofuels projects was projected by researchers at Utah State University

[126] .

This

approach forecasts the likely cost profiles for a given production system along with its expected yield. The approach also assesses what a project would require in terms of cost to achieve commercial viability. This is done using traditional discounted cash flow analyses, along with justifiable assumptions on yields and revenues from algal biomass. Fig. 38 illustrates the fundamentals of the approach:

Fig 38: Techno-economic Analyses chart Used to Assess the Viability of Commercial Algae Systems [126].

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Fig. 38 assesses the economic challenges facing the algae biofuels market. The vertical axis represents the total installed costs of a project including of the cost of the land, capital equipment, installation, and other traditional project costs as described earlier. The estimates makes provision for access ways, harvesting, dewatering, oil extraction, piping and plumbing, storage, laboratory space, and other functions [5].

The horizontal axis represents operational costs as discussed in the previous sections.

The lines on the project represent the ―zero net present value (NPV)‖ curves

[156].

These lines represent the

requirements that must be reached - in terms of costs - for a project to be economically viable. A summary discussion on the NPV lines and analyses of their implications in marketplace decisions, according to [126],

[5],

are presented in the sub-sections:

4.7.1 Orange Line Scenario The orange line represents a yield of 25 grams/m 2- day and a sales price of $200 per dry tonne of biomass produced. This productivity level represents what most experts would consider as a reasonable and substantiated expectation, one that is plausible for future large-scale algae production systems with sustained operations. 4.7.2 Solid Green Line Scenario The solid green case projects a 25% total lipid content in the algae biomass, of which up to 80% can be extracted. In this scenario, for every tonne of algae produced 400 pounds of oils for biofuels and 1600 pounds of biomass for animal/fish feed would then be available. Assuming $2/gallon for the oils sold out of the algae project, and $0.10/pound for the remaining biomass, this equates to roughly $266/tonne for the algae produced. Based on this estimation, it will be difficult to achieve sustainability and commercial viability given the state of the industry today and for the near-term future. 4.7.3 Blue Line Scenario The blue line indicates a more plausible potential for commercial viability of algae biofuels. It projects a double increment in $/tonne sales price figures of algae biomass given in the green line scenario. It adopts 64

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the same assumptions used in the previous scenario; however, algal oil would have to be sold for prices in excess of $6/gallon – which is possible should corresponding petroleum prices reach these levels. This scenario could be achieved by adopting an integrated production that will incorporate additional revenue streams from wastewater applications, higher value co-products , carbon credits and CO 2 abatement procedures.

4.7.4 Dotted Green Scenario The dashed green curve represents the same assumptions as the solid green line, but this case assumes higher productivity numbers of up to 50 grams/m 2-day. Quite possibly, the proposed approach will be a combination of greater productivities coupled with a focus on co -generation of higher value products from algae. In addition, emphasis needs to be placed on reducing costs across all elements of the algae production chain.

4.8 Oil, gas and algae biofuel comparative analysis The overall cost of harnessing fossil fuel deposits are enormous and is dependent on a number of factors, including the nature, size and accessibility of the deposit. Energy firms are often reluctant to provide exact information regarding to their capital and operational cost profiles. However, the International Energy Agency (IEA), in its latest November 2008 world energy outlook gave the following estimates for the costs of producing oil from various types of hydrocarbons in different parts of the world:

Fig. 39 Source: International Energy Agency World Energy Outlook 2008. Adapt ed from [127]

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While a detailed analysis of the cost profile is beyond the scope this work, it is important to note that far more problems exist with oil, gas and coal production architectures. The analysis below illustrates the point: 

The activities and production architectures that lead to the exploitation of oil and gas in comparison to algae biofuel production are more diverse, complicated and expensive.



They are diverse, because the detection and exploitation of fossil fuel deposits involve input from a range of specialties from geology to reservoir engineering.



They are complex, as indicated by the complicated nature of each stage of production.



They are costly, as the investments for algae research, exploration and production are miniscule compared to the huge capital requirements in the oil and gas sector.



Oil exploration is a risky venture, both from the technical and financial viewpoint: only one well in five produces economically viable oil [128].



The costs associated with constructing new oil and gas upstream facilities have reached a new record high, according to the most recent IHS/Cambridge Energy Research Associates Upstream Capital Costs Index (UCCI) 28 obtained from

[129]:

costs increased an additional six percent in the

past six months and have doubled since 2005; the latest increase raised the index to 210 points from its previous high of 198; and the values for the UCCI are indexed to the year 2000, meaning that a piece of equipment that cost $100 in 2000 would cost $210 today [129]. See fig. 40. 

The costs of installation vessels — the ships used to install platforms, and specialized deepwater equipment that is required for the sub-sea, particularly control systems — have also increased phenomenally in recent times [129].

28

The UCCI is a proprietary measure of project cost inflation similar in concept to the Consumer Price Index (CPI). It provides a benchmark for comparing costs around the world and draws upon proprietary IHS and CERA data bases and analytical tools [129].

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Fig. 40 - Source [129]

4.9 Algae Bio jet fuels – An economic analysis The airline industry‘s reliance on fossil fuels has been adversely affected by a range of fluctuations - such as: the changing price of crude oil and problems with supply and demand. Algae biofuels could provide an attractive alternative as their production is not limited to locations where fossil fuels can be d rilled, enabling a more geographically diversified supply. In theory, biofuel feedstock can be grown in several locations around the world, unlike petroleum products which is usually produced at set locations and transported to where they can be sold and used. The worldwide aviation industry consumes some 1.5 to 1.7 billion barrels of traditional jet fuel annually

[130].

Legislation passed by the European Union in 2008 to include aviation in the EU‘s emissions trading scheme (ETS) will add a carbon cost to aviation, requiring airlines to pay for their carbon emissions from 2012. According to a recent study conducted by the Boeing Commercial Aviation unit [131]: Bio-SPK29 fuel blends used in the test flight program met or exceeded all technical parameters for commercial jet aviation fuel; the parameters include the freezing point, flash point, fuel density, viscosity, among others. Recent

29

Bio-Derived Synthetic Paraffinic Kerosene (Bio-SPK]: a blend of algae biofuels with conventional fossil fuels.

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projections by the Air Transport Action Group

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[130],

suggests that a viable market for biofuels can be

maintained when as little as 1% of world jet fuel supply is substituted by algae biofuel. Thus, algae biofuels can become economically viable and compete with petroleum-based aviation fuels as costs are lowered through economies of scale in production

4.10 SWOT Analysis In consideration of all aspects of algae production as discussed previously, Fig. 39 presents a SWOT analysis: a summary of key strengths, weaknesses, opportunities and threats of the algae biomass application from a European perspective. Table 3 indicates that there are more opportunities and areas of strength than weakness. The SWOT analysis is consistent with the research, development, and commercialization priorities identified so far in this work and play a crucial role in guiding the platform R&D and clearly translating research results into economic goals.

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Strengths 

Higher photosynthetic effici ency



Faster growth rate than higher plants



Potentially much higher biomass productivities than other

Weaknesses 

Identifying the strains with the highest growth rates and biofuel content

land and aquati c plants 

Grows in liquid medium which can be handled easily.



Inefficient harvesting processes



Can be grown in variable climates, soils and land areas



Relatively high cost of cultivation systems.

unsuitable for agricultural purposes (e.g. desert and seashore lands). 

Can be used for waste treatment purpose.



Does not displace conventional food crops.



Production is not seasonal and can be harvested daily.



Ability to directly use fossil CO2 from power plant flue gases



Immature production and application technologies.

and similar sources. 

High nutrient content – allowing for nutrient capture in waste treatm ent



Short generation times compared to other biomass feed stocks



Production systems can easily be adapted to various level s of operational or technological skills.

Opportunities 

Algae biomass cake can be used as fertilizer or feed and thus will reduce microalgae biomass overall production costs.



Biomass cake can undergo anaerobic fermentation to obtain biogas or via pyrolysi s process to extract high value chemical

Threats 

land is limited.

compounds as co-products. 

Development and deployment of Algae technology may help

The availability of land low cost, flat



the EU realize their visions to replace up to 20% of transports

Limitations in the global supply of CO2, power and associated infrastructure.

fuels by 2020 

Sufficient density and high economic potential of municipal



efforts

wastew ater production applications. 

High number of fossil power plants can serve as potential

Insufficient research and development



Low oil and gas prices

CO2 sources. 

High demand for co-products may drive the industry

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

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The global theoretical resource potential in climatically favoured areas is estimated at 350 million tons of algal production by 2020[126].



Carbon credits

Table 3 SWOT Analysis

4.11 Summary of Analyses Growing algae at commercial and profitable level is a serious and demanding task. A successful transition to algae biofuel economy will require a range of carefully constructed guidelines and best possible approaches like any other economic venture.

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Chapter 5

5.1 Summary The processes of sourcing, growing, harvesting and producing algae biofuels has been reviewed in detail in this work. There is no doubt that algae can become an important part of the energy and economic mix of the future - not only for biofuel, but for pharmaceutical products, animal feedstock, wastewater treatment and CO2 abatement, job creation and more. Nevertheless, the assessment here has also provided further insight as to the challenges that lay ahead. Even with the advantages enumerated in this work, the development of the algal strains and cultivation technologies to the level of commercial productivity, efficiency, stability, easy and cost-effective harvesting required for biofuels production will be very difficult and require years to reach economic viability.

Following the analysis done in the previous chapters, a number of evolutionary pathways for the penetration, commercialization and promotion of alg ae can be suggested. Results from this algae biofuels modeling and analysis conducted in Chapters 3 and 4 indicate a clear set of economic-driven research and development priorities. These recommendations are considerate of the current EU clean energy development policies and how they relate to biofuels. They are summarized as follows: 5.2 Recommendations 

Location of algae facilities must also be taken into consideration. Ideally, algae production facilities should be located30 in close proximity to resources while minimizing transportation costs of algaeoil and biomass for further processing. In order to avoid competition with agricultural or other valuable uses algae ―farms‖ could be located on non-arable or under-utilized land.



Policy recommendations and regimes are also a challenging aspect of algae biofuels. The EU renewable energy laws currently have provisions for advanced biofuel research and development, but future challenges to biofuel strategies must be anticipated. Policy changes and economic incentives will need to be clearly outlined to avoid complications..

30

Areas with non- arable land, power plants, aquifers or wastewater treatment plants, etc.

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Developing a robust CO2 abatement infrastructure will transform a waste product into a valuable resource that can be used to grow fuel, making the economics of algae production more attractive.



Advances in genetic transformation techniques can introduce more sophisticated algae strains which can be manipulated to achieve desired production targets . It is important to apply financial and research investments to emerging molecular approaches in this area.



The market competitiveness of algae biofuel relies on the prices of its biomass feedstock and costs linked to the conversion processes. Production of high value co-products in conjunction with advanced biofuels can enhance the market place potential of microalgae. Companies venturing into the algae biofuel circuit should emphasize co -product capture and marketability to maximize revenue generation. Co-product markets should be rigorously investigated on a regional, national, and international basis to assess the feasibility of realizing untapped revenue opportunities.



There is need for aggressive development and deployment of technologies and processes that significantly improve total algae yields, without increasing costs.



Research and development (R&D) activities should be focus on minimizing operations and maintenance (O&M) costs for algae production systems



Technologies should be developed and policies implemented that reduce/eliminate the cost of CO 2 for algal biofuel systems. Mature low-cost CO2 delivery systems or implement policy to provide incentives, grants, loan guarantees, etc. that will reduce or eliminate infrastructure costs.



Algal biofuels growth, harvesting (includes oil extraction), system architectures, and p rocesses should be developed in a way that minimizes the quantity of energy and water required for nominal operations. Success in this area would significantly reduce cost.

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Governments should enact air traffic policies against airlines who use the ‗fossil-fuel only‘ option and provide incentives for companies to develop the processing and refining capacity needed to turn raw algae feedstock into bio jet fuels.

5.3 Conclusion As has been highlighted throughout this work, the key element in the realization of large scale, commercially viable algae biofuel production is to separate the potential from the hype. Achieving a positive net-energy balance and balancing the cash book will not be easy. A lot of work still needs to be done in terms of creating a sustainable platform for algae biofuels to thrive economically. A multiplicity of steps on both the upstream and downstream side need to be carefully integrated for an optimized algae-energy derivation concept. A concerted effort by governments and stakeholders is required to foster the promising options of algae – as elucidated in this work - to help drive its long-term market viability. In support of this case are two major trends observed in the economics of fuel: First, the end of cheap fossil fuels is near and the general forecast is that they will become increasingly scarce and as a result will become more expensive; secondly, advanced algae biofuels will become more sustainable and less expensive as the relevant science and business models mature. Putting together these projections with the necessity to curb carbon emissions, it becomes urgent to implement a sound, worldwide, policy, research and development measures to realize the inherent potential of algae.

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Appendices

Appendix 1: Source Material for Techno-economic Models. Source: NREL. Adapted from [123]

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