Cost-effective algae production within reach

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Cost-effective algae production within reach

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18 november 2014

Profitable algae culturing for bulk products should be feasible within 10 years. Scientists at AlgaePARC developed a new economic model on algae production that includes not only technical parameters on production efficiency, but also socio-economic variables. ‘The model is more reliable than the previous version of 2010 and gives us many new insights in reduction of production costs’, says AlgaePARC director Maria Barbosa.

‘Our first projections, based on 100 hectare production plants, have shown that we may reduce algae production costs by almost 50 percent. ’ This dramatic cost reduction can be achieved if algae are cultured at sunny locations, with cost-effective equipment, energy and labor, while using the most efficient reactor design.

Spectacular decrease in costs

Back in 2010 the first generation of the model calculated the initial cost estimations of present algae production. To make culturing profitable for bulk production, costs needed to decrease dramatically, by a factor 10. The model also showed which parameters needed to be improved; this was the basis of AlgaePARC’s research program. To reach the eventual goal of production costs below € 1/kg and positive energy balance within five years, reactor efficiency needed to be improved, while operational energy consumption had to be reduced.

Four years later, substantial improvements have been achieved. For example, reactor design improved, boosting production efficiency. But also costs of major equipment were reduced, while photosynthetic efficiency and harvesting efficiency increased. As a result, projected production costs for a flat panel reactor in the Netherlands equaled almost € 6.00 in 2010 and just € 2,26 in 2014, while the process became energy positive, if only operational energy is considered. Despite a spectacular increase in efficiency in just 4 years, the new model showed a further efficiency boost is possible. ‘In the model we included algae productivity parameters obtained from experiments at AlgaePARC. For example,  reactor design, photosynthetic efficiency, culture temperature, daily dilution, mixing, and sun intensity’, Barbosa explains. ‘But in addition, we included socio-economic variables from different locations into the model, like electricity costs, labor and taxes.’ Taking all these factors into account, the model calculated a drop in production costs to about € 1.37/kg biomass if algae are produced in flat-panel reactors located at the Canarian Islands. These costs can be reduced even further to € 0,75/kg and an even better energy balance when  photosynthetic efficiency of the algae is increased by 20 % (figure 1). This increase leads to values that have been reached in the laboratory and should be possible in outdoor facilities, by using an improved reactor design, more efficient and robust algae strains and smart process strategies. In addition to a higher photosynthetic efficiency, also utilization of CO2 from flue gas, while saving energy by putting the reactor in ‘sleeping’ mode at nigh (reducing flow rate, temperature, and aeration), when the algae are not productive will be important steps to reach a maximum cost reduction.

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Fig. 1. Effect of reactor design and location on algae production costs.
Fig. 1. Effect of reactor design and location on algae production costs.

Markets within reach

To market algae biomass more efficiently, valuable compounds have to be extracted from the algae cell using biorefinery technologies. For the first time, costs of biorefinery have been included in a model. It estimates these costs at an additional € 1 - 1.5 /kg biomass (dry weight). So, projected total costs for algae materials are about € 2,0- 2,5 /kg. Lucrative production of algae components is highly dependent on the market targeted (Figure 2).

Fig.2. Expected revenues for different market combinations. The red line indicates costs for production and biorefinery(€ 2,50/kg dry biomass).
Fig.2. Expected revenues for different market combinations. The red line indicates costs for production and biorefinery(€ 2,50/kg dry biomass).
Just for the biofuel market, costs still exceed revenues by a factor 8, while the food/feed and specialty market (for example cosmetics and anti-oxidants) revenues exceed costs by over a factor three and algae production for these markets is as such highly cost-effective. ‘According to our model, algae production can presently be cost-effective if we target the right markets’, says Barbosa. ‘We now need to test if the projected costs can be achieved in practice. In addition, we need to guarantee that a stable supply of biomass components with a constant quality will be available for prototype development, because we need to develop markets for combinations of food/feed, chemicals and specialties for our algae products.’