The DOE’s Shifting Worldview for Biofuels Deployment, Now through 2030

by Jim Lane (Biofuels Digest) Feedstock costs and challenges come under the microscope as the DOE reports new data on algae-based feedstocks and terrestrial crops too.
Can algae-based biofuels reach full commercial scale by 2030? The Digest investigates.
Twice this year, the US DOE’s Bioenergy Technologies Office has issued a revision of its ongoing Multi-Year Program Plan, once this summer around the time of the DOE Biomass 2014 meet-up, and once just recently in a report update that included new data and more detail on the DOE’s efforts in thermochemical conversion, and on algae-related development.
The complete report is here and is a must-read for anyone interested in the state of US industry — from production costs to available tons of biomass — or interested on how the future is likely to shape up and where DOE might place its R&D emphasis as it drives towards it’s overall goal of, roughly speaking, $3.00 biofuels (per gallon, gasoline equivalent). You can download the latest update here.
Let’s look at the revisions between July and November, as an opportunity to look at how new data shapes and shifts the biofuels R&D landscape.
The biggest changes come in the form of publication of the DOE’s two pathways, in algae biofuels, specifically the projections for the Algal Lipid Upgrading Pathway (ALU), and the Algal Hydrothermal Liquefaction Pathway (AHTL). But there also is some work on terrestrial feedstocks, too, and we’ll start there.
Terrestrial feedstocks — the drive towards $80 per ton feedstocks at large volume
Most of the DOE’s work around terrestrial crop-based biofuels requires an $80 per dry ton acquisition cost for the underlying feedstock. It simply isn’t feasible, the DOE has long concluded, for the technologies to reach $3.00 per gallon (gasoline equivalence) with feedstocks in the $100 range.
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The DOE sees a “blended feedstock” approach, where high-volume but high-cost feedstocks like purpose grown pines are offset by lower cost energy crops, construction wastes and logging residues.
What about other feedstocks as they come online? The DOE adds in its November 2014 update:
Moving beyond 2017, the blending strategy will allow even more resources to be made economical and of appropriate quality for bioenergy production, while still hitting the $80/dry ton cost target.
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Logistics: The Hidden Cost of Biomass
If you think all that dough is going to the grower, think again: The DOE is thinking around $20-$25 per ton as a grower payment — the rest is in the logistics — harvest, preprocessing, transport and in-plant receiving.
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Over to algae: it’s looking like a long, long wait
... Note that the DOE has decidedly come down on the side of open ponds for algae biofuels.
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The DOE concludes that there is a severe divide between results in the lab and results in the large-scale pond, and writes:
The greatest impact for Algal Feedstocks R&D is in helping bridge the divide between laboratory and agricultural/industrial field operations by supporting applied research and process development. There are several components to bridging the divide, these include:
• Conducting research and development at the bench scale (approximately cultivation) and research and development integration at the 1 acre equivalent in parallel;
• Supporting replicated field trials at the smallest useful scale, approximately 1000 –10,000 liter volumes under sunlight with natural temperature fluctuations.
• Integrating 1 acre equivalent operations, (approximately 400,000 – 800,000 liter culture volumes), as the minimum scale needed to gain insight into developing integrated processes for inoculation, growth, harvest and processing algal biomass; and
• Scaling to pilot operations, at a minimum scale of 10x process development (approximately 10,000,000 liters) and at a realized acre.
The DOE warns:
Due to the cost and complexity of scale-up, these R&D activities may ultimately be handed off to the Demonstration and Deployment Technology Area for construction of pilot and demonstration-scale facilities.
ALU and AHTL
You’ll be hearing a lot more about those two acronyms. The DOE writes:
Two initial priority pathways were selected by BETO as the most promising approaches to achieving the Algal Feedstocks R&D 2022 targets: Algal lipid extraction and upgrading; Whole algae hydrothermal liquefaction and upgrading.
These analyses suggest that the highest cost to the system is biomass production; key sensitivities are productivity and lipid content, which can be represented as a single metric: biofuel intermediate yield per acre, per year. Other important areas are harvest efficiency, nutrient and water recycle, and processing efficiency, as well as capital costs of the production system.
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The high cost of algae feedstock
The persistent problem, right now? That $13 per GGE cost for algae biomass — or, $1,092 per ton. Now, if you can produce for the fish feed market at those economics — with fish meal at $1500 per ton, the economics look pretty good. But the DOE and NAABB assessments to date have valued algae biomass in line with soybean meal, which prices out at less than $400 per ton, with a value estimate from the NAABB of under $300 per ton.
And, in the case of the AHTL technology, that biomass is being fully utilized anyway — and with fuels going at $400 per ton in the case of AHTL, you can see why converting all the biomass to fuels makes a lot of sense; in this analysis, it is simply worth more as fuel than as feed.
It’s an area of research that will have to be done — harmonizing algae’s biomass price prospects. Will it compete at the $300 per ton feed markets or in the $1500 per ton markets?
The Bottom Line
That $13 per GGE cost for algae is tough news for fans of algal biofuels. Tough in that it looks like a very long slog towards algae fuels. The DOE has not shifted from their overall $3.00 per gallon target, but one has to wonder how fuel-based algae ventures are going to finance themselves over the 16 years the DOE thinks it will take to get to demonstration scale with affordable fuels. Either the ventures will have to depend on government financing deep-pocketed investors who have the patience, or divert themselves on a parallel track towards a second, nearer-term business in nutraceuticals or other high-margin products while maintaining an R&D effort for algae biofuels.
There are two other possibilities. Unlikely now with low oil prices, but should international conditions deteriorate we might see an enhanced “Manhattan Project” in algae biofuels designed to shorten the timelines — possibly undertaken by an international consortium as was the approach with the International Space Station.
Possibility #2, if algae meal prices alongside fish meal instead of soymeal — as in the Cellana model, then a two-product strategy might prove just the ticket. Meal and lipid-fuels suggest the ALU pathway: we’ll see how the market prices algae biomass. READ MORE and MORE (Ethanol Producer Magazine)