Algae Biofuels Production Technologies Worldwide

Aug 1, 2010
275 Pages - Pub ID: SB2640167
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Involvement in the algae biofuels industry shot up by companies 550% between 2005 and 2007, driven by environmental concerns and high crude oil prices. However, oil prices have since declined, and the recent global financial crisis stymied many industries. Currently there seems to be continued interest in algae biofuels, but the industry is also plagued by excessive hype… So what is the near-term outlook for the algae biofuels production technologies market?

One of the great benefits of algae as a feedstock is that it can be used to produce an array of biofuels: algal oil, biodiesel, renewable diesel, aviation biofuel, renewable jet fuel, biogasoline, ethanol, butanol, biomethane, and even hydrogen. Algae biofuels production also involves a wide array of technologies, from genetically engineered diatoms, green algae, and cyanobacteria; to open ponds or photobioreactors for cultivation; centrifuges and presses for extraction; and refineries, fermenters, and digesters for processing into fuels.

Because the market for algae biofuels production technologies is diverse, it is helpful to break it down according to subsets of production technologies: cultivation technologies, harvesting and extraction technologies, and algae biofuels production facilities. Through 2015, cultivation technology sales are expected to hold most of the total algae biofuels production technologies market. The remaining market segments will be held by a combination of harvesting and extraction and fuels production facilities, for a total projected market value of over $1.6 billion in 2015. Starting at an estimated $271 million market size for 2010, this increase is significant and underscores that this is a quickly changing and evolving industry, expected to show an annual growth rate of nearly 43 percent.

Algae biofuels production technologies are currently undergoing substantial development and scaled testing. As demonstration and commercial implementation move forward, emerging algae biofuels production technologies will garner up to about a third of the total market by 2015, as some current technologies are rendered obsolete or underperforming in terms of cost and production efficiency.


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Market Insights: A Selection From The Report


Algae Biofuels Facility Projects

At its current stage, the algae biofuels industry is primarily pursuing pilot and demonstration scale algae cultivation projects and algae biofuels production facility projects. Algae harvesting and algal oil extraction systems are typically installed at algae cultivation projects. As illustrated in Table 4-1 below, project costs escalate with the scale of project, with demonstration-scale projects costing significantly more than pilot projects and commercial scale projects entering a higher tier of capital costs due to their capacities at or above demonstration-scale projects. Most announced development is within the United States, although smaller peripheral markets in the European Union and Asia are expected in the later years of this market assessment due to collaborations with the U.S. algae biofuels industry or as a result of research programs beginning in 2010-2012. There are no clear industry-wide trends in terms of project progression: pilot projects are expected to continue through 2015 following the completion of demonstration-scale and some commercial-scale projects. This a result of the varying stages of business activity and operations between algae biofuels companies.

Investment Trends

As reviewed in Chapter 4 of this report, investment in the algae biofuels industry - a driving factor in the growth of algae biofuels technology markets - has principally come through private investment, venture capital firms and their limited partners, strategic partnerships with companies from other industries, and government funding. These four sources of investment represent nearly all of the funding available for algae biofuels industry operations, while revenues from business activities and product sales represent an extremely marginal source of income at present, but will represent a larger source of capital by 2015 (Table 5-2). This section reviews recent trends in algae biofuels industry financing including government funding and venture capital investment rates and their affects upon algae biofuels industry development and progress.

Industry Participation

The algae biofuels industry has grown dramatically in the past decade through the establishment of start-up companies dedicated to the design and implementation of algae cultivation, harvesting and algae biofuels production systems. Prior to 2000, there were roughly 10 companies worldwide pursuing the development of algae biofuels as their sole business area or in relation to other business operations such as algae production or renewable fuels. By 2009, the number of companies involved in the development and implementation of algae biofuels technologies had grown to over 60 worldwide (see Figure ( 5-1). Over the past five years, growth in the market for algae biofuels technologies has been strongly lead by industry demand for products, components, and systems related to the development and implementation of algae cultivation, harvesting and algae biofuels production technologies. With the number of algae biofuels start-up companies more than tripling between 2005 and 2009, a number of pilot, demonstration, and commercial-scale facility projects relating to algae production and algae biofuels production have been initiated and have been chiefly responsible in driving demand for algae biofuels technology in the still developing industry.

In the News

Support of Algae Biofuels as Viable Source of Green Energy Gains Momentum

New York, August 16, 2010 - In the world of biofuels, 2010 is officially the year of the autotrophic organism as dozens of companies and academic laboratories race to transform algae into a source of viable green energy, according to Algae Biofuels Production Technologies Worldwide by leading industrial market research firm SBI Energy.  The endgame of these research efforts—which include genetic engineering and other biological techniques that create chemically induced mutations to improve how algae functions—is to domesticate algae, to make it a crop highly efficient at converting sunlight and carbon dioxide into lipids and oils that can be sent to a refinery and made into replacements for conventional gasoline, diesel, jet fuel, and ethanol, as well as various other chemicals.

“Algae can be cultivated and harvested in support of a wide array of biofuel products. In addition, algae biofuels systems hold promise to enable rapid production of high quality, high throughput biofuels systems in support of carbon emissions reductions targets, and in support of clean fuel production,” says Robert Eckard, SBI Energy analyst and author of the report.  “The U.S. Department of Energy’s recent $24 million commitment to a trio of research groups determined to bring algae biofuels to market indicates just how much potential this industry holds.”

At its current stage, the algae biofuels industry is primarily pursuing pilot and demonstration-scale algae cultivation projects and algae biofuels production facility projects.  Due in part to the wide array of production technologies available, pilot projects are expected to continue through 2015 following the completion of demonstration-scale and commercial-scale projects that will result from varying stages of business activities between algae biofuels companies.  Most announced development is currently within the U.S., although smaller peripheral markets in the European Union and Asia are expected to emerge due to collaborations with the U.S. algae biofuels industry or as a result of research programs beginning in 2010-2012.  The U.S. is forecast to represent over 82% of the global market for open pond algae cultivation systems from 2010-2015, while the EU and Asian markets are respectively expected to claim 11% and 7%. 

The major factors for algae biofuels technology market growth include trends in the prices and commodity markets for fossil fuels, regulatory support and incentives available to the algae biofuels industry for industry growth, growing investment in the algae biofuels industry, and contemporary industry activity focused on reducing the operational and capital costs associated with algae biofuels production. The high market growth projected for algae cultivation systems is based upon the growing volume of pilot, demonstration-scale, and emergent commercial-scale projects currently planned by companies within the algae biofuels industry.  More than a dozen projects with over $25 million in algae cultivation system costs are projected through 2015.

Algae Biofuels Production Technologies Worldwide distinguishes fact from hype by examining the market for algae biofuels production technologies according to subsets of production technologies: cultivation technologies, harvesting and extraction technologies, and algae biofuels production facilities. The report estimates current total market value and forecasts future growth for algae biofuels technologies between 2010 and 2015; provides an overview of industry trends and opportunities for original equipment manufacturers (OEMS) and suppliers to the industry; and investigates the effects of energy market trends on the development and activity of the algae biofuels industry.

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SBI Energy, a division of MarketResearch.com, publishes research reports in the industrial, energy, building/construction, and automotive/transportation markets.  SBI Energy also offers a full range of custom research services.

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Algae Biofuels Production Technologies Worldwide - Blog

Biofuels come in many shapes and sizes - from corn ethanol to soy biodiesel to food waste biomethane. But algae biofuels in particular have been getting a lot of press lately. And for good reason - unlike many biomass feedstocks that typically are only refined into a single fuel type (corn into ethanol, soy into biodiesel), algae feedstocks hold the potential for use in production of a wide array of end fuels. These include, of course, oil-based biodiesel, but also renewable diesel, ethanol, biomethane, renewable gasoline, renewable jet fuel, and several others.

Unfortunately, over the last few years, algae biofuels have become plagued by superfluous information and hype. The industry is currently seeing a glut of small startups and potential startups that do not yet have proven technologies, but do have a strong desire to corner the market - sometimes so much so that claims have become exaggerated and engorged beyond reasonability. For an investor, venture capitalist, or legitimate startup firm, the hype and enthusiasm can be disorienting: without careful analysis, long-shot startups can be hard to differentiate from experienced firms, and the near term market potential for algae biofuels production technologies can be seemingly impossible to predict with any accuracy.

In order to get around the hype and assess the real near term market potential, the data provided in SBI’s report on algae biofuels production technologies is based on a systematic, company-by-company review of proven products, projects that are underway or reasonably expected to be underway in the near term, funding/capital acquisitions, and projected market caps relating to government incentives and regulations, as well as competition with conventional fuels and other biofuels.  Our review indicates that the market for algae biofuels production technologies is entering an exciting time - demonstration projects will soon approach commercial scales and become economically viable.  Even now, there are early signs of hype falling out of the industry, as a handful of industry leaders and specialists take the forefront in algae biofuels production.

Additional Materials


Global Biofuels Market

Global Biofuels Market: Opportunities, Emerging Technologies and Production Through 2014, SBI projects the U.S. to lead the world in global production of biobased energy activity, growing at a five-year CAGR rate of 13%. Ethanol production provides a substantial contribution to the American economy.

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