After the ASP was established at SERI in the late 1970s, the emphasis switched from methane production to algal oils as the fuel product. This was based on the known ability of some microalgae species to accumulate large amounts of algal lipids, in particular under conditions of nutrient (mainly N and Si) limitations (See Section II and Section III. B.5.d.).

As discussed in Section III. A.1, initially the ASP set out to investigate both the HRP design described earlier and a patented, closed photobioreactor concept, the ARPS. In 1981, the DOE Office of Energy Research requested an in-depth engineering and cost analysis of both systems. However, by the time the final report was completed in 1982, the ARPS had already started to evolve toward a more standard design (Section II. B.2.), and the HRP project in California (Section III. B.3.) was re-instated. Thus, the comparative evaluation had become somewhat moot, and the final report (Benemann et al. 1982a) covered only the HRP system in detail, with the comparative HRP-ARPS analysis relegated to an unpublished appendix (Benemann et al. 1982b).

The HRP system followed quite closely on the earlier work of Benemann et al. (1978), but with some significant differences and much greater details for the engineering designs and cost estimates. As before, 40-ha earthwork ponds were used; however, this time with paddle wheel mixing. Productivities were now projected of 67.5 mt/ha/yr for an algal biomass containing 40% lipids (oils) by weight. This corresponded to about 90 mt/ha/yr for conventional algal biomass, yielding almost 160 barrels of crude oil/ha/yr. This was roughly twice as high as the prior study. Harvesting was again assumed to be by bioflocculation, followed by a centrifugation process to concentrate the biomass to a paste-like consistency. A solvent extraction process as used for soybean oil extraction was assumed, at three-time higher unit cost to account for the high — moisture in the paste. (However, as was pointed out, direct solvent extraction was unlikely to be feasible for such high moisture biomass.) As before, the residual biomass was to be anaerobically digested in covered ponds to produce methane gas, with the nutrients (and C) from the digester (and digester gas) recycled to the ponds.

A major emphasis in this report was the development of engineering designs for the CO2 supply and transfer systems, a major point of criticism in the Dynatech R/D Co. (1978a) study. In fact, Mr. Don Augenstein, the author of the Dynatech R/D Co study, joined EnBio, Inc. and carried out the engineering designs and calculations for CO2 supply systems for the present report. A

key assumption was that the CO2 flue gas delivery pipe from the power plant was only 5 km long, at a cost of almost $3 million (1982$). The distribution piping system, including blowers and valves, was estimated at about $2 million for the 800-ha plant. A detailed analysis of power requirements and CO2 transfer issues was also carried out.

Several cases and scenarios were analyzed, including operations at high (8.0-8.5) pH and low (7.0-7.5) pH, CO2 recycling from the methane produced, and the use of flue-gas and pure CO2. Flue gas CO2 required much higher capital and operating costs; pure CO2 required purchase of this nutrient. Various scenarios were analyzed for CO2 sources, including purchase and combustion of coal (e. g., co-siting a power plant). Another major variable analyzed was the capital and operating costs factors, such as labor costs and overhead, utilities and fuel costs, land costs, factors for buildings and power supplies, contingencies and contracting, architect and engineering fees, and capital-related cost factors (taxes, insurances, depreciations, maintenance, and returns on investment). These factors made a larger difference in final costs than most of the engineering design cost estimates (e. g., pond construction costs, paddle wheels). Somewhat surprisingly, there appears to be no standardization for such general cost factors. For the “base case” analysis, assuming no recyling of nutrients from the digester and a low pH of operation, costs were nearly identical, at almost $ 160/barrel oil, for pure CO2 and flue gas utilization cases. The higher cost of pure CO2 (@$45/mt) balanced by the higher capital and operating costs of the flue gas delivery system.

The cost of oil at $160/barrel was excessive, even for the projected rising fossil fuel prices. By recycling nutrients and operating at a higher pH (reducing CO2 outgassing) and using lower cost ($22/mt) CO2, overall costs could be reduced by about 20%-25%, to about $115 for the pure CO2 case, somewhat higher for the flue gas (coal) case (Table III. D.2.). This was a significant reduction, but still represented an excessive cost. This led to a reiteration of the entire engineering analysis, by using more optimistic engineering designs and estimates at each step, including, for example, a shorter flue gas delivery pipe. This resulted in a further capital costs reduction of about 25%. The capital cost related factors were also reduced, including power supply costs, building costs (to near $1,000/ha), and return on total capital (from 15% to 10% per annum). With these most optimistic assumptions, final costs were reduced to as low as $65/barrel of oil for a high pH flue gas case. Table III. D.2. summarizes these costs, for both for the conservative (base) case and optimistic cases. Updating these costs to roughly 1997 dollars would give, even under the optimistic case, costs for the oil of about $100/barrel.

Other alternatives were also examined. Seawater systems were attractive if all the CO2 required for algal growth were to be supplied by the seawater. For the assumed productivities, this would require a hydraulic retention time of 1 day, and thus much larger settling ponds and settling velocity for the algae, but could be cost-effective.

Another conclusion was that higher value byproducts were unlikely to significantly contribute to such systems, as their production (either in scale or objectives) would not be easily integrated with algal fuel production. The costs of methane and alcohol fuels from algal biomass (high in

carbohydrates, rather than lipids) would likely be similar to that of algal oil production. Indeed the issues were not the final processing, but the primary production of the biomass.

The authors identified four major research needs to achieve the objectives of high productivity in large-scale outdoor systems:

1. Photosynthetic efficiency for light energy and high lipid production.

2. Fundamentals of species selection and control in open pond systems.

3. Mechanisms (and control) of algal bioflocculation.

4. Effects of non-steady-state operating conditions on algal metabolism.

The appendix to this report (Benemann et al. 1982b), analyzed the ARPS system as proposed by Raymond (1979, 1981) that was in development at the time at the University of Hawaii (Section III. B. 1.). First, a detailed historical review of microalgae systems designs was presented, which traced the evolution of the two concepts. The main report carried out a detailed and updated review of all prior cost analyses. The specific claims made for the ARPS systems were analyzed in detail. For example, the CuSO4-filled cover was claimed to reduce harmful IR radiation, but this was not supported by the photosynthesis literature. Also, overheating would still be a major factor even with a CuSO4 cover, requiring a cooling process. In addition, the heated CuSO4 could not be plausibly used as a power source. Mixing power inputs would be prohibitive for this design. Increased productivities caused by a flashing light effect were not plausible. Most important, the costs for even the cover and liner for such a system would be prohibitive by themselves, without considering any other factors.

This study clearly identified the major difficulties associated with microalgal mass culture for fuel production. Only a very low-cost system, based on open ponds without plastic liners, mixed at low velocities, and using a very simple harvesting process, could be considered in such a process. But even with these rather favorable, though plausible, assumptions, costs would still be well above those for current, or projected, oil prices.

I Publications:

Benemann, J. R.; Augenstein, D. C.; Weissman, J. C. (1982a) “Microalgae as a source of liquid fuels, appendix: technical feasibility analysis.” Final Report, U. S. Department of Energy, unpublished, 126 pp.

Benemann, J. R.; Goebel, R. P.; Weissman, J. C.; Augenstein, D. C. (1982b) “Microalgae as a source of liquid fuels.” Final Report, U. S. Department of Energy, 202 pp.

Raymond, L. (1979) “Initial investigations of a shallow layer algal production system.”Am. Soc. Mech. Eng., New York.

Table III. D.2. Costs of microalgal biomass production.

Productivity: 67.5 mt/ha/yr for 40% extractable lipid biomass (162 bbl oil/ha/yr).

System Description: Twenty 40-ha growth ponds, harvesting by settling, with C recycle from the digesters and use of either pure CO2 delivered to the site for $22/mt, or generation of CO2 on site from coal at half this cost.

Cost Estimates: Figures in parenthesis next to capital and operating cost items refer to the factors used for the conservative and optimistic cases, respectively. Maintenance, insurance, taxes, (6% and 4.8%, respectively), based on total capital costs, except for land and working capital, which are also not depreciated. ROI (return on total capital) based on total capital, before taxes.

(Source: Benemann et al. 1982a.)

CAPITAL COSTS — $/ha

Water and Nutrient Supply

Earthworks & Berms

Paddlewheels

Settling Ponds

Centrifuges

Oil Extraction

CO2 Supply

Electricity

Bldgs., Offsites (102,7.5Z)* A&E and Contractors (202,102)* Contingencies (102 for both)* Land Costs

OPERATING COSTS S/ha /yr Labor and Overhead Electricity (СІ0, 6.5/Kwhr)* 3,060 Water CO2 and Na? CO3 1,115 Nutrients (N, P) Maintenance, Insurance, Taxes 2,450 Depreciation (10 Yr,15 Yr.)* 4,100 Return on Investment(15Z, i0Z)* 6,840 TOTAL OPERATING COSTS +R0I 20 ,Ш $/Barrel of oil 127

Working Capital (4, 3 months)* TOTAL CAPITAL COSTS