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Algenol, Dow Partner to Develop $50-million Algae Biofuel Plant

Algenol Biofuels Inc. has formed a partnership with Dow Chemical Co. to develop a $50-million, algae-to-fuel pilot- scale plant employing Algenol’s technology, which the partners expect will be partly funded using Department of Energy grants.

Bonita Springs, Fla.-based Algenol has applied for a $25-million grant under the DOE’s grant program for integrated pilot- and demonstration-scale biorefineries, with Dow Chemical signing the grant application as a collaborator in the project.

Algenol has enough equity to fund the remaining cost of the project, but it plans to seek further government funding in 2010 for other projects, said Paul Woods, chief executive of Algenol, in an interview with Clean Technology Insight. Dow will contribute land, engineering and water-management expertise, its advanced materials technology as well as a main feedstock—carbon emissions—to the project.

Algenol, launched in 2006 by four partners, has been running on private funds, with the founders themselves injecting $70 million into the company so far.

Algenol has developed a genetic-enhancement technology that links the production of sugar from photosynthesis with the enzymes required to produce ethanol within an individual blue-green algae cell.

The whole process occurs inside a plastic container measuring 6 by 100 feet, into which salt water and carbon dioxide are pumped. As sunrays flow in, ethanol molecules are produced and accumulated on the roof of the container, known as a photo-bioreactor, from where they are collected at regular intervals.

Dow’s contributions will be “in-kind service” and technology. As part of the technology contribution, Dow plans to develop the advanced materials and specialty films for the photo-bioreactor system.

The Midland, Mich.-based chemical company will also provide 24 acres at its Freeport, Texas, site for the construction of the pilot plant, water-treatment technology and access to a CO2 source for the biorefinery from a nearby manufacturing facility.

As governments seek alternatives to fossil-fuel as a source of energy, chemical companies such as Dow and its competitor BASF Group have emerged as potential developers of energy storage capabilities such as lithium-ion batteries. This is a first investment in biofuels for Dow.

The project’s application is based on the pilot plant consuming 2 metric tons of CO2 a day. Renewable Energy Laboratory, the Georgia Institute of Technology and Membrane Technology & Research, Inc. are the other collaborators to the Algenol project.

The DOE funding comes from a $786.5 million grant program for biofuels under the American Recovery and Reinvestment Act, known as the federal stimulus legislation. From that total, $480 million is for the development of pilot- and demonstration-scale integrated biorefineries, and the ceiling for pilot projects such as Algenol’s is $25 million.

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