Category → Scale-up
This week’s issue of C&EN includes some news from algae-based biofuels firm Sapphire Energy. The company is reporting its first harvests of algae biomass from a large, outdoor algae farm in New Mexico.
Sapphire has grown and gathered 21 million gallons of algae biomass totaling 81 tons. Eventually, the plan is to make a kind of crude oil from the algae. They grow the stuff in very large outdoor ponds. According to the press release, “the cultivation area consists of some of the largest algae ponds ever built with groupings of 1.1 acre and 2.2 acre ponds which are 1/8 of a mile long.”
You’d think that the promoters of algae for biofuels would be clinking glasses filled with spirulina-enhanced juice at the news. But you’d be wrong.
In fact, a trade group of algae firms calling itself the National Algae Association says the kind of ponds used by Sapphire – known as raceway ponds (you can see why looking at this image) – will not scale up commercially. Instead the NAA supports the development of photobioreactors (PBRs for short). Similarly, algae researcher Jonathan Trent, writing in a New Scientist magazine piece that also appears in Slate is arguing in favor of photobioreactors. Specifically, Trent says PBRs should be deployed offshore. I’ll quote from his article where he summarizes the raceway/PBR tradeoffs:
There remains the question of how and where to grow the algae. A few species are cultivated commercially on a small scale, in shallow channels called raceways or in enclosures called photobioreactors (PBRs). Raceways are relatively inexpensive, but need flat land, have lower yields than PBRs and problems with contamination and water loss from evaporation. PBRs have no problems with contamination or evaporation, but algae need light, and where there is light, there is heat: A sealed PBR will cook, rather than grow, algae. And mixing, circulating, and cleaning problems send costs sky high.
Trent doesn’t mention what industry analysts complain about the most. When it comes to algae, though PBRs might be the best bet, they require too much capital expenditure for the equipment.
Meanwhile, Solazyme, which started life as an algal fuels firm but now is manufacturing oils for use in skin cream and other high value applications, grows its algae in a third way – its algae live in bioreactors, but in the dark. They eat sugar and make oil. Is there a best way to commercialize algae for fuels and chemicals? Is there any way? It seems that it is still too early to tell.
Sometimes when you dig a little on Google News you find fascinating nuggets in local news of the topics that we cover here at C&EN. A great example is in Knoxville’s alternative newsweekly Metro Pulse.*
Newshound Joe Sullivan digs into what ever became of $70 million that the state of Tennessee spent in the flush days of 2007 to start up a switchgrass and cellulosic ethanol industry in the state.
The good news on the project is that the promised 250,000 gal per year cellulosic ethanol plant did open, in Vonore, Tennessee. The bad news is that it has not been using any of the switchgrass grown on 5,000 surrounding acres. The switchgrass part of the project involved the University of Tennessee Institute of Agriculture. The state figured switchgrass would grow great there. And it seems to have been correct.
Sullivan reports that more than half of the $70 million project money went to build the pilot plant. But corporate partner DuPont (now DuPont Cellulosic Ethanol) has used the pilot plant to test and demonstrate its ability to make ethanol from corn stover. Corn stover is a feedstock that is available in huge quantities…. in Iowa. As it happens, DuPont’s first commercial-scale cellulosic ethanol plant is in Nevada, Iowa, and is set to come online soon.
C&EN has mentioned the Vonore plant a half dozen times (including in a previous post on this blog). The move away from switchgrass escaped our attention, but it is an important development for the UT folks and the farmers they have been working with.
So what will happen to the 50,000 tons of switchgrass that were harvested by Vonore-area farmers? Read the story to find out.
* Edited 8/28 to correct reference to Metro Pulse
It’s been a very busy summer, but I had a chance to catch up with Rick Eno, the CEO of Metabolix, last week. Metabolix makes a bio-based plastic that it calls Mirel, though chemists call it a polyhydroxyalkanoate polymer (PHA). We last heard from Metabolix in January when its commercial-scale partnership with Archer Daniels Midland dissolved.
The breakup was a significant blow to the company in terms of growing its business and selling Mirel to customers. The partnership with ADM was based around an ADM-financed production plant capable of making 50,000 tons of Mirel per year. Unfortunately, sales ramped up slowly and ADM said the market was too risky.
Since the breakup, Metabolix has decided to launch the biodegradable Mirel bioplastic under its own nameplate, says Eno. It has transferred inventory from ADM, and brought over all the business operations. Still, the company needs a production partner.
“Since Mirel was exclusive to ADM for so long, [after the breakup] we did get inbound calls and we also reached out to potential partners to establish potential manufacturing,” Eno told C&EN. He says that rather than try to sell enough Mirel to keep a huge plant busy, he’s now looking for something closer to a 10,000 ton per year scale.
“We’ve narrowed down a large number of potential opportunities to four. Now we’re looking at engineering detail for integration of our manufacturing technology to the partners’ asset sets,” Eno reports. “We’re deeply evaluating a short list of manufacturing options.” Without ADM to center the business, Metabolix can look outside the U.S. – for example, to be closer to customers. In fact, the firm has opened a sales office in Cologne, Germany to be close to the European market.
As Alex Tullo wrote in his recent cover story on biodegradable plastics, an important market niche is in organic waste handling – specifically in municipalities where organic waste is separated and hauled to composting facilities. Eno suggests this is both a good niche for PHA, and also a great reason to be in Europe where people rigorously sort their trash.
Eno followed up on his January comments that the company would look to higher-value markets that really require biodegradability, rather than try to compete with cheap and plentiful petro-based plastics. He said the company is focusing on agriculture and horticultural markets – for things like biodegradable plastic mulch; the consumer market for compostable bags and similar products for organic waste diversion; a broader packaging market; and a marine and aquatic segment where it is important that plastics biodegrade fully in oceans and streams.
The breakup with ADM somewhat ironically boosted Metabolix’s cash position (for some rather complicated accounting reasons). That will be a big help, because the company is still developing its upcoming portfolio of bio-based C3 and C4 chemicals, using different PHA molecules than Mirel uses as an intermediate. Example target chemicals are gamma butyrolactone and acrylic acid. The C4 program is the farthest along and has reached 60,000 liter fermenters in scale-up. Eno says the chemicals program has netted “significant partner interest.”
Also helping to pay the bills is a government grant backing the company’s efforts to put the bio-based plastic platform into purpose-grown plants. In a recent advance, Metabolix and its research partners have reported a new way to increase polyhydroxybutyrate (PHB) production in sugar cane.
So there you have it – Metabolix is still moving along. The next time we will hear from them, Eno says, it will be because they have a new production partnership to announce. Stay tuned.
I’ve never had an automobile that ran on anything other than gasoline. Sure, sometimes I buy the high-octane stuff, and nowadays my go-to fuel has 10% ethanol in it. Someday soon it may have 15%. But I’m old school. If I were more cool, I’d be filling up on trendier stuff – perhaps some home-brewed diesel from vegetable oil, for example.
Actually, french fry grease drivers are also getting to be passe these days – its so hard to keep up! According to former Pennsylvania Governor (and our first Homeland Security head) Tom Ridge, methanol is the way cool fuel. Or so he contends in an OpEd in today’s New York Times.
This idea is pretty timely for me, as I was thinking of trading in my Mazda for a sprint car. If Ridge’s idea gets traction, I won’t have to – I’ll be able to fill up with the way high octane stuff without needing to upgrade my ride. He points out that just as a normal car can run on ethanol (or be cheaply converted to run on ethanol) the same is essentially true for any alcohol fuel. It takes way more methanol to go the same miles as on the same amount of gasoline, but worry not, it’s cheap. The bottom line? Methanol can be made from (say it with me) clean-burning, domestic natural gas.
This thread continues neatly over at the Department of Energy, where $30 million in grants will go to projects to make it possible to fuel a car on compressed natural gas (those tanks are too big, bulky, and pricey to use now, but can be improved).
And in the same press release, DOE says it will make available $14 million to explore making transportation fuels from algae.
Meanwhile, on a recent drive through Eastern Pennsylvania I again pondered the meaning behind a billboard on Interstate 81. “Future Site of the Nation’s First Waste Coal to Clean Transporation Fuels Plant.” Questions that came to mind were “what is waste coal? how do you make transporation fuels from it? that sounds like it would be expensive? and are my tax dollars paying for this?”
Anyway, that pilot plant, which was originally slated for operation in 2006, was never built. Cost over-runs and difficulty arranging the neccesary financing (at last count the cost was around $1 billion) seem to have made that idea a trend of the past.
Fuel blenders are finding that the New Year is bringing a few changes to their business. Before Congress adjourned for the holidays, it opted not to renew the subsidies for putting corn ethanol into gasoline. Though the subsidy had become a fact of life – and added up to $6 billion last year – the fall of the corn regime was not unexpected.
This morning, NPR tried to answer the question of whether anybody would notice the difference, and according to their expert, energy economist Bruce Babcock at Iowa State University, most likely no one will. You can review the segment on the NPR website.
I don’t yet have a number for 2011 production of corn ethanol, but 2010 was a record year, according to the Renewable Fuels Association. U.S. refineries produced 13.23 billion gallons of the stuff. So bear that number in mind for my next item…
Totally aside from and unrelated to the generous corn ethanol subsidy that no longer exists, the EPA still requires the blending in of biofuels in its Renewable Fuels Standard, now in its second edition (RFS2). For 2012, EPA says blenders must include 8.65 million gallons of cellulosic biofuel* in their fuel mix. That will be equivalent to .06% of all renewable fuel produced in 2012. RFS2 says blenders will need to use 9.23% of renewable fuels in their blends in 2012 – most of that will still be corn ethanol.
EPA is tracking 6 cellulosic biofuel projects that are supposed to produce in 2012, and that is how it came up with the number. This is what EPA published at the end of December:
KL Energy Corp. is the only facility in the United States currently generating cellulosic biofuel RINs. American Process Inc., Fiberight, and ZeaChem all anticipate completing construction on their production facilities in late 2011 or early 2012 and plan to begin producing biofuel soon after their facilities are complete. INEOS Bio and KiOR are targeting April 2012 and mid 2012 for the start-up of their respective cellulosic biofuel production facilities. The variation in these expected start-up times, along with the facility production capacities, company production plans, and a variety of other factors have all been taken into account in projecting the available volume of cellulosic biofuel from each these facilities.
There are a couple of other projects in the works that are likely to be RFS2 candidates, but not this year. Poet has received a conditional USDA loan guarantee and is building a co-located plant (with corn ethanol) in Emmetsburg, Iowa – scheduled for completion in 2013. DuPont now has full ownership of what used to be DuPont Danisco’s cellulosic project. No word yet on when that plant will be constructed, but it will be in Nevada, Iowa.
*Edited 1/4/12 to state cellulosic biofuel rather than cellulosic ethanol. EPA anticipates that the largest cellulosic fuel producer will be KiOR, which will be making biodiesel and gasoline from cellulose at its plant in Columbus, MS. KiOR is the only project of the six planning to make anything other than ethanol.
I read with much amusement this week two dueling editorials about advanced biofuels; one from the Wall Street Journal and the other - a reaction piece – from Biofuels Digest. One was pr0 and one against, I’ll let you strain your brain figuring out which was which.
Editorial boards have plenty of information to pick from to illustrate a variety of contentions – from advanced biofuels are a “march of folly” paid for with “an invisible tax paid at the gas pump” to biofuel as wise investment not just for government, but for companies like Shell and BP. Evidence for the former view: Range Fuels, which absorbed both grants and loans before succombing to the perils of scale-up engineering last week. Evidence for the latter would include Mascoma‘s joint venture with Valero Energy to build a 20 million gal per year cellulosic ethanol plant in Michigan. Valero will foot a good portion of the estimated $232 million bill to construct the facility.
The crux of the problem, as Cleantech Chemistry and many others have observed (including the National Academies) is that the type of advanced biofuels (i.e. fuel not made from food-like feedstocks such as corn sugar) called cellulosic ethanol has not achieved scale to date. (There are other, more lifecycle concerns, as well). Biofuel Digest editors point out that the larger proportion of advanced biofuels scaling up now are of a different sort- like biodiesel for example. In short, they point out there are multiple roads to get to the same place.
The Wall Street Journal, to its credit, does not politicize its arguments – it rightly notes that Range Fuel’s support came from programs created by the Bush administration. Meanwhile, Biofuels Digest points out that the CapEx on the Mascoma plant pencils out to $11 per gal of ethanol for the first phase. The plant may produce up to 80 million gal per year, however, and all the usual promises of cheaper production through scale are supposed to apply.
Last Friday, press reports began to circulate that cellulosic ethanol start-up Qteros had fired its CEO John McCarthy, laid off a bunch of staff, and may be for sale. I was intrigued as I had written a bit about the company in the past, and realized, in retrospect, that I hadn’t heard much about it lately.
In fact, it appears that Qteros is in a bit of a huddle and may change the scope of its future plans. I asked the new CEO, Mick Sawka, formerly the company’s senior vice president of engineering and commercial development if he could update me. By e-mail he replied that “Qteros has reduced its staff and John McCarthy has stepped down as CEO. … Based on our data and that of our strategic partner, Praj Industries, we remain confident that we have one of the best process and economic routes to cellulosic ethanol production. Under our new leadership we continue to develop our process.”
Praj Industries is an Indian firm focused on engineering for biobased ethanol. It wants to expand into cellulosic feedstocks.
The partnership was announced early in January, just a day before the firm disclosed it had raised $22 million in the first part of a C round of venture capital funding. At that time, the firm implied it planned to get more investments and proceed to commercialization. It sounds like the scope of the firm’s plans may have narrowed a bit. Cleantech Chemistry will keep an ear out for more information.
I wrote about Qteros’ former CEO John McCarthy back in February of 2010, when he had just taken the helm. Two other firms, Mascoma (also in cellulosic ethanol) and Segetis (in bio-based chemicals) had brand new CEOs at the same time. In all three cases, the new CEO’s were experienced hands who were brought in to guide the biobased firms to commercialization.
Qteros is not the only one of the three that has been quiet this year. Segetis’ most recent press release came out Feb. 14 and is about a deal with Method (a household cleaner firm) to develop a tub and tile cleaner made from bio-based molecules. Meanwhile, in September, Mascoma filed for an IPO worth up to $100 million – though it has not yet begun selling stock. Both firms have the same CEOs as they did when I wrote about them in 2010 – Atul Thakrar is at Segetis and William J. Brady is still in charge at Mascoma.
DuPont has been digesting its acquisition of Danisco for a while now, and has sent out an update about what used to be called DuPont Danisco Cellulosic Ethanol – now shortened, as you might guess, to DuPont Cellulosic Ethanol. In a press release, DuPont says the effort will now be led by Steven J. Mirshak, who will scoot over from his position as president of DuPont Tate & Lyle Bio Products.
The firm is still planning to build a cellulosic ethanol plant in Nevada, Iowa. Like another Iowa cellulosic ethanol plant being built by corn ethanol producer Poet, DuPont also is pushing a parallel effort to gather up the corn stover needed as a feedstock. It is a part of something called the Stover Collection Project, with Iowa State University.
Meanwhile, back at the ranch, otherwise known as DuPont’s demonstration facility in Vonore, Tenn., the company “continues to make advancements” in preparation for scale-up, though we don’t learn what those are. Nearby, DuPont partner firm Genera Energy (which is connected to the University of Tennessee) is harvesting test fields of switchgrass. Genera held a recent field day where the company showed visitors the switchgrass varieties as well as the equipment used to harvest them.
We here at Cleantech Chemistry will be monitoring progress toward large-scale production of cellulosic ethanol. As a recent report from the National Academies has pointed out, the U.S. is way, way behind where it is supposed to be this year in producing the stuff.
While you were at lunch, the nascent cleantech manufacturing industry in the U.S. collapsed.
Actually, that’s not quite true, but it is true that Solyndra will file for bankruptcy. This is a big deal – Google News lists 85 news outlets covering the story. Solyndra is famous for its stylish, glass tubular, CIGS-powered, solar rooftop modules. And for raising vast amounts of venture capital. And for getting a $535 million Department of Energy loan guarantee. And for filing for, and later cancelling, a planned IPO in late 2009.
Solyndra’s success in raising money was an early indicator that venture capitalists had turned to so-called cleantech industries, taking some of the shine off of internet and technology-based start-ups. It was the first company to benefit from the DOE’s loan program, part of the 2005 Energy Act.
But cleantech — particularly solar — has been looking a bit less shiny lately. Earlier this month, Evergreen Solar filed for bankruptcy protection, and its filing shows that the firm does not plan to emerge in anything like its current form. Evergreen also received government largess, getting more than $50 million in support from the state of Massachusetts.
Both Solyndra and Evergreen had proven technologies and they had the financial resources to scale up their manufacturing. Compared to many segments of cleantech, this sounded like a pretty good risk for investors. However, both technologies were based, at least in part, on solar module designs that minimized the use of polysilicon. That was smart at the time, because polysilicon supplies were very tight, and shortages threatened to choke the life out of (traditional) solar manufacturing. That was back in 2007-8. But by the end of 2008, chemical makers made plans to ramp up their manufacturing of polysilicon. The stuff was fetching record prices, after all, and it’s made from sand.
Beginning in 2009, polysilicon manufacturers like Hemlock Semiconductor (owned in part by Dow Corning) and Wacker Chemie began doubling, tripling, quadrupling etc their polysilicon capacity. Billion dollar plus-sized polysilicon plants in the US also won government support. By late 2009 there was an overabundance of polysilicon and an oversupplyof modules in inventory, crushing prices.
Firms like Solyndra and Evergreen had raised money and started scaling up manufacturing right as solar modules became a commodity. Chinese manufacturers at that point had their eye on making solar modules for close to $2 per watt. It was not a good time to have a technologically distinct – and more expensive – solar product.
In 2010-2011, European countries – especially Spain – cut back on solar subsidies. Germany has trimmed them as well. All solar makers were busy cutting costs amid strong competition, especially from China, and selling into a market with constrained demand.
Looking at the subject from a distance, it seems that polysilicon makers and their ambitious and steep increases in capacity are what doomed the non-polysilicon players. Materials suppliers, not just of polysilicon, but of also of polymer backing sheets, UV protecting films, and metal pastes, are doing very well selling into the photovoltaic market.
But government bets on cell manufacturing technology have not paid off. It is not clear yet how much of the loan gurantee Solyndra leveraged into actual financing. Still, Congress will likely have a great deal to say about lessons learned from Solyndra.
Given the stock turmoil today and yesterday, recent earnings reports from IPO’d cleantech firms may be flying under the radar for most people. And to call them “earnings” reports is a bit generous, too; they are really “losses” reports, but that is to be expected for early-stage technology firms.
Still, its worth noting what analysts are saying about companies like Amyris, Gevo, KiOR, and Solazyme and what the firms reported for the second quarter. While I was mulling a post on just this subject, Jim Lane, over at Biofuels Digest got his post up yesterday covering the first three companies. So I’m giving a hat tip to him and suggesting that you go over there and read his summary.
But if the heat and the stock swings have you too worn out to do that, the short take is that though Amyris and Gevo posted results that were not as strong as expected, analysts following the firms are still enthusiastic about the stocks. KiOR will release it’s second quarter results next Thursday. The important pieces that analysts are looking for is whether the companies have a realistic plan for increasing scale (whether they use their own, or other company’s capital to do so). They also want to get a sense of where revenues will come from in the short term, for example, from product sales or off-take agreements from reliable customers.
Yesterday, Solazyme reported revenues of $7.4 million, which beat the expectations of analyst Laurence Alexander of Jefferies & Co. He had predicted $6.0 million. Most of the revenues came from R&D funding but the company has begun generating sales of its skin care line, called Algenist, made from an algae-derived tailored oil. Alexander says that the Algenist launch will turn out to be larger than expected, meaning more revenues, and thus, less operating losses, into the future. In addition, he notes that the company will deliver 283,000 liters of fuel to the U.S. Navy and the contract calls for up to 550,000 liters. He’s put a Buy rating on the stock.
Cleantech Chemistry recently posted an interview with Cameron Byers, Solazyme’s senior vice president & general manager of fuels and chemicals about how the company plans to make money.