Volume 3, Issue 6
Published: July 27, 2009
Algae: a commercial economics perspective
Technical maturity and commercial viability of algal biofuels is a much debated topic, with estimates ranging from three years to (multiple) decades. However, most people involved in this emerging technology area agree that algal biofuel commercial economics are extremely challenging, highly variable, and subject to dynamic, speculative, and volatile commodity markets. On 3 June 2009 the US Department of Energy (DoE) released a Request for Information (RFI) that solicits comments to a draft version of DoE’s National Algal Biofuels Technology Roadmap, which provides a framework for qualifying and prioritising algae technology development objectives. Over a two-year period US-based renewable energy company Diversified Energy conducted a technical, engineering, cost, and economic model to provide a realistic baseline assessment of algal biofuel economics and the cost drivers associated with commercial-scale algae production. This can be used to prioritise research, development and commercialistion initiatives. The economic model created for this analysis includes more than 50 independent variables supported by detailed engineering specifications, commodity market data, and vendor quotes for equipment costs.
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