Successful microalgae-to-biodiesel conversion has been the goal of some renewable energy researchers for more than two decades. But after years of research on how to best grow these Carbon Dioxide (CO2)-loving plants in open ponds, a commercially viable solution has remained elusive.

Now, Algae.Tec Ltd., a six year-old Australian-based “advanced renewable oil from algae” start up, claims to have a potentially revolutionary solution. That is, growing and harvesting the microalgae in enclosed used sea-land shipping containers – which often seem almost as plentiful as microalgae itself.

The 2640-MW Bayswater Power Station will feed waste CO 2 into an enclosed algae growth system. Credit Algae.Tec.

These enclosed microalgae farms would in part feed off the serendipitous production of carbon dioxide from coal-fired power plants and eventually waste CO 2 from other manufacturing facilities.

To that end, Algae.Tec has signed a deal with Macquarie Generation, Australia’s largest electricity generator, to put an “algae carbon capture and biofuels” production facility next to a coal-fired power station in Australia’s Hunter Valley. Macquarie Generation, which operates the Sydney-area 2640 MW Bayswater Power Station, will feed waste CO 2 into an enclosed algae growth system.

Algae converts CO 2 into triacylglycerol (tags) oils that can then be chemically converted into biodiesel.

The company says it will use enclosed sea containers to grow freshwater microalgae; importing light, CO 2 , and phosphorous- and nitrogen-rich fertilizers, into the containers themselves in order to maximize the algae’s growth.

Algaes are made up of oils that are not dissimilar to those found in soybeans or canola, said Algae.Tec executive chairman Roger Stroud.

“That oil can be separated out and converted into biodiesel,” said Stroud. “By getting rid of the oxygen, you can hydrogenate that oil and turn it into Grade A biojet fuel.”

Even though Stroud said the company has yet to choose the species of algae it will cultivate, the plan is to start algae production by the end of 2014.

Projections are for the first year of production to hit 100,000 tons of algae biomass; half of which would be converted to an estimated 60 million liters of biodiesel. One sea-land container would generate 250 tons of biomass per annum, said the company, which would be harvested on a continuous basis.

Stroud said the other 50 percent will be pelletized stock feed either for Australia’s dairy industry or for export to Asia.

Stroud projects that some 75 percent of his company’s income will come from biodiesel. The remaining 25 percent of Algae.Tec’s income will hinge on the sale of the microalgae’s leftover biomass for animal feed.

What do power providers like Macquarie Generation get out of the deal?

In Australia, Stroud said there’s a carbon tax of $24 a ton which is “real money as far as power plant emitters are concerned.” The Bayswater plant emits 20 million tons of CO 2 a year, so any reduction in emissions would be welcomed by Macquarie Generation.

However, as Stroud pointed out, the costs and profits will all be Algae.Tec’s; noting that his company will technically be one of the Bayswater plant’s customers since the enclosed system will need electricity to run their pumping systems.

“Reducing our carbon emissions and carbon liability combined with additional revenue from a new customer makes this project good business sense,” Macquarie Generation CEO and managing director Russell Skelton commented to Renewable Energy World.

Understanding the Process

Stroud wouldn’t give many details about how the algae-to-biofuel conversion takes place due to proprietary concerns, but he did say that a piping system will redirect the power plant’s stack gas through water to reduce the hot gas from temperatures well over 100°C down to some 25°C. He said that saturated CO 2 water would then be fed into the enclosed algae system.

Algae.Tec sees a future in using other potential stack gas sources with high CO 2 concentrations to enhance algae production. This would include power plants and energy-intensive manufacturing facilities.

Rendering of Algae.Tec’s proposed microalgae-to-biodiesel conversion facility, which will grow algae in enclosed shipping containers. Credit Algae.Tec.

But many in the research community still remain dubious about microalgae as a viable pathway to plentiful biofuel – whether the algae is grown outside in open ponds or in an enclosed container system.

“Microalgae is a crop and if you’re not a farmer, you just don’t get it,” said Michael Cooney, a chemical engineer at the Hawaii Natural Energy Institute. “I’ve equated this microalgae craze to the [California] Gold Rush, where there was a sense of easy money. But the only people who made money off the gold rush were people selling supplies.”

Despite such skepticism, Algae.Tec said it has proven its technology via hundreds of laboratory, pilot-scale and product tests.

Although Stroud refused to divulge the technical details of how an enclosed system would be able to recover enough outside light to actually grow algae inside a shipping container, he said in part the process involves reaping photons from solar collecting disks located not far from the enclosed containers. This collected light would then be fed via an undisclosed form of optical fiber into the containers themselves.

“We also have an innovative and low-cost way of periodically getting light into the system via electrical means,” said Stroud. “Suffice it to say, it works.”

Why A Closed System?

In contrast to Algae.Tec’s closed containers to grow algae, open pond microalgae systems have inherent challenges.

As Cooney noted, microalgae operations are subject to the vagaries of the elements and tend to grow strains of microalgae not intended for cultivation. They are also subject to contamination by predator micro-organisms and macro-organisms that feed on the algae.

“With an enclosed system,” said Stroud, “we can keep the bacteria diminished, control the temperature, and avoid weather. As a result, our yields should be a lot higher.”

As for Algae.Tec’s expansion beyond Australia, Stroud noted that the company has an unannounced “open” joint venture agreement with a Chinese oil and gas equipment manufacturer in China’s Yellow River basin. He said Algae.Tec has also been in discussions with a major Japanese waste management company about potential biodiesel production in Japan, with possible related operations in South Korea and Thailand.

Stroud also said recent signals from the Obama Administration concerning the need to reduce U.S. power companys’ CO 2 emissions were encouraging for Algae.Tec’s potential future growth in the U.S.

He noted Algae.Tec has a five-year target goal for its Bayswater facility to produce 300 million liters of biodiesel a year. The company has already invested $20 million into the project with the aim of bringing the company to profitability by mid 2015.

“In the 20th century,” said Stroud, “any interest in microalgae [for energy] tended to be academic. But we’re in the business of making a profit.”