In 1986, a report was generated by SERI ASP in-house researchers that analyzed factors and costs involved in microalgae biomass production systems (Neenan et al. 1986). The report reviewed the various system components and requirements for algal biomass production, and summarized and extended the available resource analyses for water, land, and most importantly, CO2 required for large-scale microalgal biomass production. It also reviewed the various fuel product alternatives from microalgae biomass, including ethanol, methane, PVO (“pseudovegetable oil”), biodiesel (methyl ester fuels), and even gasoline, (see also Feinberg 1984).

Although generally following the HRP system concept and design described earlier, the authors raised a number of issues and questions. For example, they concluded that paddle wheel mixing was not “the optimal design,” although paddle wheel mixing was used in their analysis. Some modifications were made in the engineering analyses, such as replacing channel dividers by plastic fences, and the use of clay liners in the ponds. For harvesting, microstrainers or belt filters were used as primary harvesters, followed by centrifugation. However, the overall design and cost estimates were essentially based on the Benemann et al. (1982) analysis, including scale (860-ha of pond surface).

Using these inputs, an Algal Production and Economic Model was developed using various unit costs (costs of fertilizers, land, power, water, CO2, etc.) and design parameters (module size, depth, nutrient concentrations and losses, mixing velocities, etc.), financial factors, and operating parameters (retention times, algal biomass composition, growing seasons, efficiencies, etc.). As in the prior studies, the residues from the fuel extraction/processing would be converted to methane gas by anaerobic digestion. Schematics and process diagrams for the various processing options were developed. The reference case assumed a biomass with a 30% lipid content and a 17 g/m2/d average annual productivity (62.5 mt/ha/yr). The overall projected system costs for the reference case were $43,283/ha of ponds and $433/mt of algal biomass. This compares to $39,850/ha and $274/t in the “conservative” case of the Benemann et al. (1982) analysis (Table III. D.2., pure CO2 case). That was for a somewhat higher productivity (67.5 mg/ha/yr) and lipid content (40% versus 30% in this study). It is difficult to extract the specific cost differences between these analyses. However, the cost routines and parameters used had larger effects on costs than the engineering estimates. For one example, in Neenan et al. (1986) water costs were 12% of overall costs, compared to less than 4% in Benemann et al. (1982).

Compared to a biomass cost of $433/mt estimated for the reference case, the allowable feedstock costs for the various fuel options were calculated to be only somewhat above $ 100/mt (and even less for ethanol). Table III. D.3. provides a summary of this analysis, for a 36,000 mt/y (33,000 t/y) microalgae biomass to fuels processing plant. The table provides capital and operating costs only for the fuel processing units, and derives an allowable algae cost, in $/t. There is a large discrepancy between these estimates and the projected biomass production costs. This led to the conclusion that such a process “is currently not commercially viable.” In fact, the main and

coproduct credits in this analysis were projections for the year 2010, when diesel or methane was expected to cost some four times current (1998) costs (even without inflation adjustment). This makes the economics of this process even less attractive.

As in the prior analysis (Benemann et al. 1982a), a cost reduction and process improvement effort was undertaken and “attainability targets” developed. First, sensitivities were run for 13 resources (such as power costs and evaporation), 15 facility design parameters (e. g., culture depth and mixing), three biological parameters (such as growing season) and eight financial parameters (cost escalations, etc.). Taken one at a time, most factors did not reduce costs significantly (except for growing seasons, culture depth and source water CO2 content). Although some of the results are difficult to interpret (for example, the large decrease in costs with increasing depth), the major conclusion was that no single parameter dominated costs sufficiently to achieve the goal of low-cost fuel production. Of course, several parameters in combination could do so. In particular, by increasing productivity to as high as 8% of total solar conversion efficiency and 50% lipids (50 g/m2d), and by assuming a capital investment of $48,000/ha, an algal production cost of $211/mt was estimated. Using this cost, the microalgae biomass fuel processing costs were again estimated, allowing calculation of allowable fuel product costs, of $1.65/gal of biodiesel.

The fuel processing cost estimates, the major contribution of this report, were very preliminary and based on many assumptions. For example, the costs of the transesterification plant were rather high, and might be reduced in the future. But, as a central conclusion, productivity was again the most important parameter: increasing production efficiencies by a factor of about four decreased production costs by almost half. The report concluded with a detailed analysis of the “attainable” process improvements, emphasizing the need for achieving multiple cost reductions, in addition to significantly increased photosynthetic efficiencies. The report concluded that “aggressive research is need to fulfill the performance requirements defined by this analysis”.

I Publications:

Feinberg, D. A. (1984) “Fuel options from microalgae with representative chemical compositions.” Report, Solar Energy Research Institute, Golden, Colorado, SERI/TR-231 -2427.

Neenan, B.; Feinberg, D.; Hill, A.; McIntosh, R.; Terry, K. (1986) “Fuels from microalgae: Technology status, potential, and research requirements.” Report, Solar Energy Research Institute, Golden, Colorado, SERI/SP-231-2550, 158 pp.

Table III. D.3. Costs of microalgal biofuels production: reference case.

(Source: Neenan et al. 1986.)

Summary of reference capital, operating, and allowable feedstock costs for microalgae fuel processing options. Of the five fuel options, the first four produce a high (30%) lipid biomass; the last (ethanol) fermentable carbohydrate, representing only 13% of biomass weight.

Notes:

a. Not including algae feedsock

b. Process and cooling waters

c. By-product prices: $0.07/m3 for CO2 (captive use only), $7.40/MMBtu for methane, fuel gas, or LPG, and $13.30/MMBtu diesel fuel (exports)

d. Main product prices: $7.40/MMBtu for methane, fuel gas, LPG, and $16.60 ($1.75/gal) for gasoline and diesel fuel, $1.20/gal for ethanol and $1.75/gal for biodiesel (methyl ester) or PVO

e. The value ($/t) of the algal feestock in producing the main and coproduct mixes. For example, for the ester fuel case, the facility would produce 2.1 million gallons of biodiesel in addition to some 600,000 GJ of methane and 760 t of glycerol for export (plus 11 million m3 CO2 and 2,400 tons N, recyled internally) at prices listed in c. and d. above.

Table III. D.4. Costs of microalgae biofuels production: attainability cases.

(Source: Neenan et al. 1986.)

Summary of Attainable Capital and Operating Costs for Fuel Processing Options.

Notes:

a. Includes microalgae biomass feedstock production costs of $211/mt

b. Process and cooling waters

c. By-product prices: $0.07/m3 for CO2 (captive use only), $7.40/MMBtu for methane, fuel gas, or LPG, and $13.30/MMBtu diesel fuel (exports)

d. Main product, million gallons/yr.