Oilgae Digest

UPDATED, May 2011 OILGAE DIGEST The Algae Energy Industry Opportunities & Prospects Oilgae is the definitive resource for algae energy. In addition to being an online hub for all aspects of algae fuels, the Oilgae team is also a regular contributor to various online and offline forums. The Oilgae team members have been invited to speak and present at numerous international conferences and seminars. Contact A5C, Anugraha Apartments, 41, Nungambakkam High Road Chennai – 600034, Tamil nadu, India Phone: +91(44) 45590142 Mobile: +91‐98413‐48117 Email: [email protected] 2 List of Contents 1. Introduction to Algae Energy 1.1 Algae & Energy – Background and Concepts 1.2 Energy Products from Algae Biomass 1.2.1 Biodiesel 1.2.2 Ethanol 1.2.3 Methane 1.2.4 Hydrogen 1.2.5 Other Hydrocarbons 1.2.6 Prominent Companies & End Products 1.3 Algae to Energy Processes 1.3.1 Strain Selection 1.3.2 Algaculture 1.3.3 Harvesting 1.3.4 Oil Extraction 1.3.5 Conversion of Oil to Biodiesel 2. Size & Scope of the Algae Business Opportunity 2.1 Energy Industry Payoffs 2.1.1 Global Energy Industry 2.1.2 Oil ‐ Big Challenges & Big Payoffs 2.2 Applications & Uses for Algae 2.2.1 Fuel Applications of Algae 2.2.1.1 Biodiesel 2.2.1.2 Ethanol 2.2.1.3 Hydrogen 2.2.1.4 Methane 2.2.1.5 Hydrocarbons 2.2.2 Non‐fuel Applications 2.2.2.1 Bioremediation 2.2.2.2 Other Non‐fuel Applications 2.3 Industries with Synergistic Benefits from the Algae Energy Opportunities 2.4 Wide Range of Business Opportunities 3. Real World Status of Algae Energy Projects 3.1 Prominent Companies 3.2 Status of Algae Fuel in Real World 3.2.1 Industry Concentration 3.2.2. Dominant Designs 3.2.3 Implementation Status of Prominent Companies 3.2.4 Q&A 3.3 Bottlenecks & Barriers 3.3.1 Biggest Challenges 3.3.2 Entry Barriers 3.3.3 Q&A Oilgae ‐ Home of Algae Energy‐www.oilgae.com 3 4. Investments & Returns 4.1 Investments 4.1.1 Lab Stage 4.1.2 Pilot Stage 4.1.3 Commercial Stage 4.2 Returns 4.3 Costs 4.4 Q&A 5. Profiles of Top Algae Energy Companies 6. Investments & Venture Capital 6.1 Quantum of VC Investments 6.2 Companies that have Received VC Funding 6.3 Government & Other Public Initiatives 6.4 VC Perspectives 7. Business Strategies 7.1 Key Success Factors 7.2 Niche Focus 7.3 Exploring Opportunities in Support Industries 7.4 SWOT Analysis 7.5 Lab Stage & Pilot Stage 7.6 Teams & Expertise 7.7 Monitoring for Breakthroughs 7.8 Things to Avoid 7.9 Deciding the End Product 7.9.1 End Products – Q&A 7.10 Understanding Your Country / Region’s Regulatory and Incentive Environment Better 8. Future Trends 8.1 Perspectives 8.2 Predictions 8.3 Future Research Needs ‐ Thoughts from the ASP Team 9. Interested? Next Steps 9.1 Organizations 9.2 Algae Collection Centers 9.3 Algae Culture Collection Centers – from World Federation for Culture Collections 9.4 Ask Oilgae Oilgae ‐ Home of Algae Energy‐www.oilgae.com 4 Preface & Objectives Algae, a third‐generation biofuel feedstock, present one of the most exciting possibilities as a future solution to our energy problems, especially that of transportation fuel. In the last few years, there has been an accelerated amount of activity in this field. However, the field of algae energy is still in its nascency. While many around the world have heard about the energy possibilities from algae and would like to know more, few resources are available that provide a definitive overview of the algae energy industry, its potential, the status of various companies in this industry, and what the future is likely to hold for this industry. Entrepreneurs, investors and businesses around the world are keen to have a resource that provides structured data, insights and opinion about this important field, a resource that facilitates them to decide on further steps. The Oilgae Digest was prepared to satisfy such a need. The Oilgae Digest is a companion report to the Comprehensive Oilgae Report (www.oilgae.com/ref/report/report.html) which is intended for users who are more advanced in this field. The Oilgae Digest has been specifically compiled for businesses, entrepreneurs and investors and answers the following questions: 1. What is the current and future potential for deriving energy from algae? 2. What are the various energy product possibilities from algae? 3. What is the real‐world status of algae‐energy efforts? 4. Which are the prominent companies in this field and what are their current efforts? 5. What industries and companies will benefit most by investing in this field? 6. What is the quantum of investment required in this field? 7. What are the key success factors required to succeed in this exciting business opportunity? 8. What types of venture capital investments are happening in this industry? 9. What are the real bottlenecks / problems that could hamper the growth of this industry? 10. What are predictions for the future with regard to challenges, possibilities and breakthroughs? 11. What are the next steps you should take should you be interested in exploring further? The Oilgae Digest was prepared by Oilgae, the leading business intelligence provider for the global algae fuels industry. This report was last updated in the first week of May, 2011. Oilgae ‐ Home of Algae Energy‐www.oilgae.com 5 1. Introduction to Algae Energy 1.1 Algae & Energy – Background and Concepts 1.2 Energy Products from Algae Biomass 1.2.1 Biodiesel 1.2.2 Ethanol 1.2.3 Methane 1.2.4 Hydrogen 1.2.5 Other Hydrocarbons 1.2.6 Prominent Companies & End Products 1.3 Algae to Energy Processes 1.3.1 Strain Selection 1.3.2 Algaculture 1.3.3 Harvesting 1.3.4 Oil Extraction 1.3.5 Conversion of Oil to Biodiesel Algae, ranging from single‐celled microalgae to large seaweeds, are the simplest and most abundant form of plant life, responsible for more than half of the world's primary production of oxygen. Algae are an extremely important species. They produce more oxygen than all the plants in the world, combined; in addition, they form an important food source for many animals ranging from such as little shrimps to huge whales. Thus, they are at the bottom of the food chain with many living things depending upon them. With the recent research and interest into using algae for producing biofuels, they have the potential to become even more important. 1.1 Algae & Energy – Background & Concepts Algae can be broadly categorized into two: Microalgae and Macroalgae. The chief physical distinguishing factor between the two is the size. Microalgae, specifically, posses several attractive characteristics in the context of energy and biofuels: • They can be grown under conditions which are unsuitable for conventional crop production. • Oil yields from algae are much higher than those from other biodiesel crops such as soy, palm and rapeseed / canola. • Microalgae are capable of fixing CO2 in the atmosphere, thus facilitating the reduction of increasing atmospheric CO2 levels, now considered a global problem. • Algae biofuel is non‐toxic, contains no sulfur, and is highly biodegradable. Oilgae ‐ Home of Algae Energy‐www.oilgae.com 6 Algae, because of their growth rate and yields, could produce a lot more oil than other energy crops. Some estimates suggest that microalgae are capable of producing up to 50,000 litres of oil per hectare a year. This could be converted into biodiesel by conventional processes and be used to fuel vehicles from jets to tractors. In contrast to microalgae, macroalgae produce only small amounts of lipid, which function mainly as structural components of the cell membranes, and produce carbohydrate for use as their primary energy storage component. Many microalgae (microscopic, photosynthetic organisms that live in saline or freshwater environments) produce lipids as the primary storage molecule. While microalgae strains that are rich in oil content can be used for producing biodiesel, other strains of microalgae and macroalgae can also be used as energy feedstock. Fuels such as ethanol, methane, hydrogen and other hydrocarbon fuels can be derived from these, through a variety of processes. 1.2 Energy Products from Algae Biomass The harvested algae biomass can be converted into a range of products. 1. Biodiesel 2. Ethanol 3. Methane 4. Hydrogen 5. Other Hydrocarbons The most important of the above is biodiesel. 1.2.1 Biodiesel from Algae Biodiesel refers to any diesel‐equivalent biofuel made from renewable biological materials such as vegetable oils, animal fats or from other biomass such as algae. Biodiesel is usually produced by a chemical reaction (called Transesterification) in which vegetable or waste oil is reacted with a low molecular weight alcohol, such as ethanol and methanol. Biodiesel is quite similar to fossil diesel fuel, but there are some notable differences. While the petroleum and other fossil fuels contain sulfur, ring molecules & aromatics, the biodiesel molecules are very simple hydrocarbon chains, containing no sulfur, ring molecules or aromatics. Biodiesel is made up of almost 10% oxygen, making it a naturally "oxygenated" fuel. Oilgae ‐ Home of Algae Energy‐www.oilgae.com 7 Bio‐diesel can be used in diesel engines either as a standalone fuel, or it can be blended with petro diesel. Much of the world uses a system known as the "B" factor to state the amount of biodiesel in any fuel mix. For example, fuel containing 20% biodiesel is labeled B20. Pure biodiesel is referred to as B100.

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