Copyright CPI 2011. All rights reserved Copyright CPI 2011. All rights reserved

Business model

developments

in algae

Dr J J Lewis

Centre for Process Innovation

Canadian High Commission,

December 8 / 9, 2011

5 4 6

CPI and the Innovation Gap

2 3

7 8 9 1

Universities Industry The Innovation Gap

Basic

Idea

Concept

Developed

Proof of

Concept

Process

Validation

In Lab

Process

Validation

Production

Scale

Process

Capability

Validated

Capability

Validated

Economic

Run

Capability

Validated

Range

Of Parts

Capability

Validated

Over Long

Period

Technology Push Universities don’t have the experience

Industry doesn’t have the time

Consequence: Research fails to reach

Market

Market Need

Product Challenges

Better products

Innovative effects

Higher Yields

Business Challenges

Lower material, operating and

fixed costs

Faster production rates

More sustainable products

Anaerobic Digestion Developing processes and testing technologies

with a range of pre-treatment, digestion and

post-treatment equipment that is rapidly

reconfigurable

Centre for Process Innovation Activities

Printable Electronics Design, development and prototyping for this

emerging industry. The focus is on printable

electronic materials, ultra-efficient lighting, displays,

photovoltaics and integrated smart systems

Industrial Biotechnology Developing alternatives to traditional chemical

processing using cleaner and more sustainable

processes on open access facilities from

laboratory to 10,000 litre pilot production

Smart Chemistry Novel mixing and reaction technologies to

improve chemical processes. Convert batch

processes to continuous processes. The facility is

supported by whole process design.

Commercial Support Support to SMEs to develop new products and

processes in the Innovation Accelerator

supplying incubator space, business support,

training and help with funding. Specialist bid team

that helps partners create consortia to secure

public private projects.

Thermal Technologies A collaboration between CPI and Tata Steel to

innovate in fuel & energy, high temperature

processes, recovery of raw materials & reductions

in waste.

Sustainable Engineering Reduces the risks of adopting innovative

technology. The team links engineering, science,

economics and systems design to improve whole

processes that are cleaner, greener and more

sustainable.

Future Technology Team of experienced senior managers that help

partners define practical technology based

solutions to long term challenges associated with

changing supply chains, resource availability,

legislation & regulation.

Serves the chemicals, pharmaceuticals, food & drink, biotechnology, printable electronics & energy industries.

Uses market knowledge and technology understanding to develop and prototype products and processes

Some of the CPI Assets

National Industrial

Biotechnology Facility

750l Units

Process

Intensification

Bioprocess Lab

Marine Fermentation

Anaerobic Digestion

Development Facility

10,000L NIBF Fermentation

Facility Innovation

Accelerator

Some of the CPI Assets

SEM

Clean Room

Mask writer Litho area

Some of the CPI Assets

Business models in algae

• Astaxanthin

• Antioxidants, PUFAs

• Food supplements

• Animal feed

• Wastewater treatment

• Biodiesel production

• CO2 capture

• Plastics

• Existing

• Existing

• Existing

To be proven as stand

alone, or as combined and

operable models }

What happens currently?

• Propagation of algae via

raceways (>95% of commercial

production)

• Harvest, dewater

• Crush for oil, or other workup

and further treatment

• High value products sold

(Astaxanthin, carotenes etc)

• High value products can stand

the processing costs

Key target - stand alone biofuel

• Algae take up CO2 and make oil, protein and carbohydrates

• Speed of growth makes optimisation of oil production attractive

• A high oil content will need to be balanced against the energy

required and costs of the subsequent processing

• Current research imperatives funded mainly by the US

• If this technology proves viable, then this becomes a potential

platform for low-cost broad chemical feedstock production from

CO2 and sunlight

Biodiesel: production train

The prospective model was established and investigated in the

Aquatic Species Programme of the US NREL 1978 – 1996

Diagram: B J Gallagher, 2010

Demonstration: US Navy trials

• Solazyme supplied the US Navy with 20,000 gallons of diesel

made via algae, and they then ordered 150,000 more

• Trials: gunboat July 2010, Seahawk helicopter June 2011,

destroyer Nov 2011

• Cost to the USN: $424 / gallon

Progress towards biofuels – 1

• “Do the basic processes better”

• Higher algae oil content, faster propagation, lower cost

infrastructure, better harvesting, upgraded dewatering, efficient

cell splitting and extraction, cheaper purification to standards

(e.g. ASTM)

• Aurora Algae, Algae.Tec, Cellana, MBD, PetroAlgae, Sapphire

Energy, Solazyme

Progress towards biofuels – 2

• “Get the algae to do the work”

• Algenol - production of ethanol

• Phycal - production of biodiesel

• Joule - production of diesel

• Each claim to have processes where the product is excreted

from the living organism, rather than needing to harvest and

disrupt the cells for extraction

Progress towards biofuels – 3

• “Design the required answer”

• Synthetic Genomics (Craig Venter) / Exxon project with a

widely publicised $600m budget

• Looking to optimise what algae currently do (as per “do the

basic processes better”) by appliance of state of the art science

rather than strain selection and process optimisation

Innovative biodiesel models

Growth / Oil Harvest Dewater Extract Convert Purify

Basic model and stages

Innovative biodiesel models Company System Growth/Oil Harvest Dewater Extract Convert Purify

Standard Phototrophic

raceways

Solazyme Heterotrophic

ExxonMobil

Venter

Genetically

modified

Sapphire /

Petroalgae

Diesel, not

biodiesel

Phycal Live excretion

Joule Live excretion

diesel

VG Energy Oil excretion,

additive

Pale green = usual range, dark green = higher productivity, white = step not needed

Companies in the area 2010 • A*STAR / A2BE Carbon Capture / Accelergy / Algae Aqua Culture Technology (AACT) / Algae Aviation

Fuel / Algae.Tec / AlgaeVentures / Algaewheel / Algae-X / Algenol / Alltech / Aquaflow Bionomics

Corporation / Aquentium / Aurora Biofuels, now Aurora Algae / Beach Energy / Beckons / Bio Architecture

Lab (BAL) / BioCentric Energy Holdings / BioCen / BioFuels LLC / BioLipidos / Bio Marine Fuels / Cavitation

Technologies / Cellana (Shell) / Cereplast / Cognis / Compact Contractors of America / Dow / Duke Energy

Corporation / EADS (Airbus) / Eko Algae / Endicott Biofuels / Transalgae / Energae / Energy Quest Inc /

Environmental Energy Technology / Envirotech / Exxon – Mobil / Ford / General Atomics / Green Plains

Renewable Energy (BioProcess LLC) / Green Star / Greon Gas / Hydromentia / Inventure Chemicals /

Joule Biodiesel / Kent Bioenergy / Krebs and Sisler LP / Livefuels / Martek Industries (BP) / Merlin

Biodevelopments (Wales) / MBD / James Cook University / National Aluminium Company (Nalco) / National

Energy Services Company / Ocean Nutrition Canada / Odyssey / Oilfox / OriginOil / PanGenex / Petroalgae

/ Petrosun / Photon8 / Phycal / Plankton Power / Renewed World Energies / Rosetta Green / Russell

Industries / Saint Mary’s Cement Co. / Sapphire Energy / Scottish Bioenergy (Glenturret Distillery) /

Seambiotic / See-O-Two / Shell (Cellana) / Siemens / Solar Biofuels Corporation / Solarvest / Solarzyme /

Solix / StatoilHydro Norway & Virginia Institute of Marine Science / Ternion Bio Industries / Terra

Endeavours / Toyota/ Unitel/ UOP / Vattenfall / Viral Genetics / W2 Energy / World Health Energy Holdings

/ XL Renewables

• “It has the feel of a gold rush situation” – Eric Jarvis, NREL

Intellectual property

• Patents of interest to the developing business models are

being filed at roughly 20-30 / month

• The US patent office is about 18 months behind in assessing

new patent applications

• Many applications are refused, rewritten, and resubmitted,

giving the impression that “no application ever really dies”

• The possibility exists that any operational system will end up in

the courts for a long time (as a patent does not guarantee

exploitation rights, only exclusion rights)

Spot the difference…

Summary

• There is an acceleration in activity towards commercially viable

biofuels from algae, but no model yet works

• A lot of research has been supported by the US agencies (more than $300m

2009 / 10, many different aspects)

• Many companies looking to improve part of the current production train as their

differentiator

• Three companies claim processes whereby the algae excrete the desired form

of fuel, requiring little further processing

• Synthetic Genomics / Exxon appear to have the science, will and budget to be

able to design a viable process

• Venter also has his own plans alongside his Exxon work