Innovation

Algenol was the first company to insert an ethanol production gene cassette into cyanobacteria to allow fermentation without the use of an organic carbon substrate such as sugar. The cyanobacteria or algae are able to produce products such as ethanol directly from the sun when other inorganic materials, including carbon dioxide, are present. The second enabling innovation is the development of photobioreactors that are especially suited for growing algae in hot arid climates. The photobioreactors control temperature, light intensity, distribute nutrients to maximize growth, and are made with special polyethylene plastic expected to withstand damaging UV for at least 6 years. The final innovative element of Algenol’s technology is its patented energy efficient ethanol separation system, the vapor compression steam stripping (VCSS) system, which concentrates very dilute ethanol streams. Once concentrated, the resulting stream can then be further processed with conventional distillation technology.

Inspiration

The idea of Algenol began with Paul Woods in the mid-1980s while working as a graduate student in Canada. He wanted to derail the natural gas industry through the use of biofuels. Instead of using E. coli as a source of biofuel, Paul wanted to use cyanobacteria. He successfully inserted an ethanol-producing genetic cassette into a strain of cyanobacteria called Synechocystis. This was Paul’s eureka moment! Many species of cyanobacteria have since been transformed in the quest to find the best producing strain. However, in the 1980s, this novel idea did not thrive due to low gas prices and corporate reluctance to focus on environmental sustainability. The research was put on hold and Paul went to work in the natural gas industry. Two decades later, after retiring from the natural gas industry as a millionaire, Paul revisited the idea of biofuels in the early 2000s as the price of crude oil reached $100 a barrel. In addition, scientists became convinced of the connection between atmospheric carbon dioxide and climate change. Carbon mitigation was slated to become big business. After meeting with Dr. Craig Smith and Ed Legere, Algenol was formed. The original idea has since been modified and improved upon, but the company has produced ethanol consistently from its 2-acre production facility in Florida. The ultimate goal is to build and operate a 2000-acre facility producing 9000 gallons of ethanol per acre each year.

Overall impact

As a start-up company, Algenol has not yet become cash positive. However, Algenol’s impact is best measured by its intellectual property, community impact, and its national and global awards. First, Algenol has more than 15 US patents that cover ethanol production (and other products) in cyanobacteria, photobioreactors design and operation, and novel ethanol separation systems. Similar patents also exist in Europe and China. Patents reflect the company’s innovation and demonstrate ability to protect its inventions.

Second, apart from hiring some of the world’s best scientific minds on algae, Algenol has invested heavily in Science Technology Engineering and Math (STEM) in the local community by sponsoring an annual solar boat race. Students from elementary through high school participate and the event is well attended by schools throughout Lee, Collier, and Charlotte counties in Florida. In addition, Algenol provides internship opportunities for engineers and scientists from the local college, Florida Gulf Coast University (FGCU).

Third, Biofuels Digest ranked Algenol #3 in its 50 Hottest Bioenergy Companies back in 2014. In the following year, Algenol was among winners of the 20th Annual Presidential Green Chemistry Challenge Awards. The US EPA, who gives out the award, recognized the company as having an innovative technology to tackle climate change. An independent panel of technical experts convened by the American Chemical Society Green Chemistry Institute formally judged the 2015 submissions from among scores of nominated technologies and made recommendations to EPA for the 2015 winners. Algenol also successfully lobbied the EPA to approve and classify cyanobacteria-derived fuel as advanced biofuels, meeting the Greenhouse Gas (GHG) reduction requirements under the Renewable Fuels Standard. This classification allows Algenol and other similar companies to benefit from fuel credits, which help to make business more valuable. While striving to become a profitable company is critical for Algenol, intellectual property, community impact and global recognition are essential to help the company remain visible to investors.

Business benefit

Algenol started with three people and grew into a company with more than 200 employees spread across the US, Germany, and Switzerland. As a start-up, the company began with $3 million. However, by 2014 the company attracted $260 million in total investment from BioFields (based in Mexico) and Reliance Industries (based in India). Algenol also received a $15 million grant from the US Department of Energy. These investments demonstrate that both private companies and the government see value in Algenol’s business. While low gas prices continue to be a challenge for Algenol, both Biofields and Reliance continue to support the company in hopes that cheaper renewable fuel will be a reality soon.

Algenol has reduced the cost of its production system from $100 per photobioreactor to $20. Additional reductions are still necessary to achieve full profitability. Further, the company successfully deployed its production platform in India, the first of its kind. The demonstration module is located near the Reliance Jamnagar Refinery, the world’s largest oil refinery with a nameplate capacity of 668,000 barrels per day at a 7500 acre complex in Gujarat state at the western extreme of India. The small algae plant has successfully completed several production batches. The fuel production process was designed to convert 1 ton of carbon dioxide emissions into 144 gallons of fuel.

Social and environmental benefit

Algenol is still to achieve its main environmental benefit of capturing atmospheric carbon dioxide and converting it to fuel on a large commercial scale. However, the start-up company has demonstrated significant societal impact, in terms of job creation. Algenol relocated from Palm Beach, FL to Fort Myers, FL. It was able to set up a modern R&D operation facility that employed about 150 people in the US alone. Lee County was supportive of the transfer to Fort Myers and granted the company $10 million. In early 2015, the company had more than 146 people at a minimum average wage of $85,000.

Algenol also built out a manufacturing subsidiary called Viper Mfg. which had 10 additional staff members, all with an average wage of $91,550. At least three college interns from Florida Gulf Coast University were able to become full-time employees with the company and at least 1 has become manager level employee in the last 5 years. As previously mentioned, Algenol also supported STEM activities to inspire kids to pursue science-based studies. Two of these high school kids that participated in Algenol annual solar boat race became employees and eventually went off to college.

Interview

Dr. Kofi Dalrymple, Former Associate Director of Engineering