1. Techno-economic evaluation of microalgae high-density liquid fuel production at 12 international locations
- Author
-
Karen Hussey, Ben Hankamer, John Roles, and Jennifer Yarnold
- Subjects
0301 basic medicine ,Profit (accounting) ,Natural resource economics ,020209 energy ,02 engineering and technology ,Management, Monitoring, Policy and Law ,7. Clean energy ,Applied Microbiology and Biotechnology ,12. Responsible consumption ,Renewable fuels ,03 medical and health sciences ,Diesel fuel ,TP315-360 ,0202 electrical engineering, electronic engineering, information engineering ,Production (economics) ,Operating expense ,Productivity ,Techno-economic analysis ,Algae-based fuel ,Renewable Energy, Sustainability and the Environment ,Research ,Internal rate of return ,Investment (macroeconomics) ,Fuel ,030104 developmental biology ,General Energy ,13. Climate action ,Energy production ,Fuel security ,Business ,TP248.13-248.65 ,Biotechnology - Abstract
BackgroundMicroalgae-based high-density fuels offer an efficient and environmental pathway towards decarbonization of the transport sector and could be produced as part of a globally distributed network without competing with food systems for arable land. Variations in climatic and economic conditions significantly impact the economic feasibility and productivity of such fuel systems, requiring harmonized technoeconomic assessments to identify important conditions required for commercial scale up.MethodsHere, our previously validatedTechno-economic and Lifecycle Analysis(TELCA) platform was extended to provide a direct performance comparison of microalgae diesel production at 12 international locations with variable climatic and economic settings. For each location, historical weather data, and jurisdiction-specific policy and economic inputs were used to simulate algal productivity, evaporation rates, harvest regime, CapEx and OpEx, interest and tax under location-specific operational parameters optimized for Minimum Diesel Selling Price (MDSP, US$ L−1). The economic feasibility, production capacity and CO2-eqemissions of a defined 500 ha algae-based diesel production facility is reported for each.ResultsUnder a for-profit business model, 10 of the 12 locations achieved a minimum diesel selling price (MDSP) under US$ 1.85 L−1/ US$ 6.99 gal−1. At a fixed theoretical MDSP of US$ 2 L−1(US$ 7.57 gal−1) these locations could achieve a profitable Internal Rate of Return (IRR) of 9.5–22.1%. Under a public utility model (0% profit, 0% tax) eight locations delivered cost-competitive renewable diesel at an MDSP of −1(US$ 4.69 gal−1). The CO2-eqemissions of microalgae diesel were about one-third of fossil-based diesel.ConclusionsThe public utility approach could reduce the fuel price toward cost-competitiveness, providing a key step on the path to a profitable fully commercial renewable fuel industry by attracting the investment needed to advance technology and commercial biorefinery co-production options. Governments’ adoption of such an approach could accelerate decarbonization, improve fuel security, and help support a local COVID-19 economic recovery. This study highlights the benefits and limitations of different factors at each location (e.g., climate, labour costs, policy, C-credits) in terms of the development of the technology—providing insights on how governments, investors and industry can drive the technology forward.Graphic abstract
- Published
- 2021