IV. B.1. Conclusions

IV. B. I.a. Cost and Productivity Goals

The overall conclusion from this review of 2 decades of DOE and ASP R&D in microalgal mass culture for biodiesel and other renewable fuels, is that this technology still requires relatively long-term R&D for practical realization. The initial, rather optimistic, cost and performance projections have not been met, or when met, the performance expectation (e. g., for productivity) have been raised. This was due, in large part, to the following factors:

1. The expectations for the future costs of fossil fuels have declined.

2. The value of by-product credits for waste treatment, greenhouse gas mitigation, or higher value coproducts are either uncertain or relatively low.

3. The recent engineering designs and economic analyses have projected higher costs than earlier estimated, partly because of greater detail and realism, thus requiring higher productivities to achieve cost goals.

4. The actual productivity results of the outdoor experimental work were well below the projections on which the economic analyses are based.

In this concluding section, these issues are briefly addressed, followed by a discussion of future R&D needs and recommendations.

The expectation for the economics of alternative fuels is a moving and uncertain target. Energy prices have been falling in real terms for more than 20 years, since the last oil-shock of the late 1970s. Competing within current market realities is not plausible for most renewable energy technologies. Indeed, electric industry deregulation is removing price supports for such technologies as wood, wind, and geothermal power. The price of fossil fuels will probably start to reflect at least some of their externalities costs, including air pollution and greenhouse gases, and plausibly even a cost penalty to account for their non-sustainable nature. However, any projection of the future price or costs of fossil fuels, with which renewable fuels such as microalgae biodiesel would need to compete in the marketplace, is rather uncertain and arbitrary.

For example, the use of a C-tax of some $50/t CO2 has been suggested, based on a current tax in Norway. However, if this were applied to all fossil fuels currently consumed, equivalent to some 20 billion tons of CO2 world wide, it would increase the energy sector of the word economy by $1 trillion, more than tripling current expenditures on fossil fuels, a highly unlikely possibility. Perhaps a more modest tax of $50/tC (approximately $ 14/t CO2), would be a more appropriate upper bound for greenhouse gas mitigation penalties (e. g., credits for renewable energy sources). At any rate, presently there is essentially no monetization of greenhouse gas mitigation, and any such figures are, at best, educated guesses.

However, greenhouse gas mitigation credits would likely be the overwhelming considerations in any future externalities cost accounting. Table III. D.7., summarized greenhouse gas credits required for microalgae systems, demonstrating the decisive effects of competitive fossil fuel costs on the necessary valuation of greenhouse gas mitigation. That table also demonstrates the major effect of productivity on the projected economics of such systems.

Another potential enhancement of microalgae biodiesel economics is in wastewater treatment. Here the technology and economics would be dominated by the competitive costs with an activated sludge plant, or other wastewater treatment processes, including conventional microalgae pond systems. The latter, known also as facultative or stabilization pond systems, naturally treat municipal wastewaters (sewage), liquid animal manures, food processing wastes, and even some industrial effluents. In current technology, with very few exceptions (e. g., the City of Sunnyvale, California) the algal biomass is not harvested, and thus it is discharged to the nearest body of water (river, lake, etc.), used for irrigation, groundwater recharge, or it settles to the bottom of the ponds. Such systems are not designed for maximizing biomass production. However, through conversion to high rate ponds, they provide a possible entry for introducing and demonstrating of microalgae biomass fuel production and CO2 utilization. Of course, their economics would not be dictated, except marginally, by their waste treatment functions, and their impacts on U. S. greenhouse gas emissions and fuel resources would be modest, at most a fraction of 1% of U. S. energy consumption and greenhouse gas emissions.

To expand the economic base and potential of such systems, other higher value coproducts or byproducts have been considered from such systems and processes. This is discussed in the following section.