1. NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC. Algal Biofuel Pathway Baseline Costs Algae Peer Review Annapolis, MD Andy Aden, NREL Ryan Davis, NREL April 7, 2011 This presentation does not contain any proprietary, confidential, or otherwise restricted information

2. NATIONAL RENEWABLE ENERGY LABORATORY Goals and Objectives The goal of this task is to develop baseline technoeconomic analysis and user models for algal biofuels Serves as a benchmark against which process variations can be compared This task directly supports the Biomass Program by assisting in the development of baseline costs and future cost targets Leverages decades of experience in cost-driven R&D for other biomass conversion platforms (biochemical, thermochemical, etc) Using technoeconomic analysis (TEA) and modeling, NREL provides direction, focus, and support to the biomass program and algae-related projects, guiding R&D towards program goals Algae technologies under development can be incorporated into the models in order to quantify their economic impact Experimentally verified data will be used in the models to quantify progress towards program goals Sensitivity analysis is used to quantify the impact of key variables on overall economics 2 NREL, Sept 15, 2010, Pic #18071

3. NATIONAL RENEWABLE ENERGY LABORATORY 3 Overview June 1, 2010 Sept. 30, 2014 ~ 25% Complete Ft-A. Feedstock Availability and Cost Ft-B. Sustainable Production Bt-K. Biological Process Integration FY10:$100,000 FY11:$125,000 FY12:$200,000 No ARRA Funding Timeline Budget Barriers DOE OBP HQ and GO Algae Project PIs National Labs (INL, PNNL, ANL, etc) Industrial Partner(s) (undisclosed) Partners NREL, March, 2008, Pic #15689

4. NATIONAL RENEWABLE ENERGY LABORATORY Project Overview 4 Multiple algae economic studies have been conducted, with enormous variation This project leverages several prior research activities: Aquatic species program (ASP) DOE Biomass Algal Roadmap Analysis conducted for EPA under RFS II Conceptual models developed from scratch Phased approach: 1)Develop baseline models using best available data 2)Peer review models 3)Incorporate technologies under development 4)Assist in cost target development Courtesy Amy Sun (Sandia)/ Phil Pienkos (NREL)

5. NATIONAL RENEWABLE ENERGY LABORATORY Approach 5 Rigorous process models developed in Aspen Plus for material and energy balances Capital and operating costs developed in Excel ® User models developed in Excel ® that approximate Aspen output Dissemination of user models and documentation for peer review Cost data derived from vendors, cost databases, literature, etc. Financial assumptions consistent with other platforms Conceptual Process Design Material and Energy Balance Capital and Project Cost Estimates Economic Analysis Environmental / Sustainability Analysis R&D

6. NATIONAL RENEWABLE ENERGY LABORATORY Accomplishments 6 Scope of analysis: 3 Pathways Autotrophic (“AT”) via open pond Autotrophic via photobioreactors (PBRs) Heterotrophic (“HT”) via fermentation tanks Process boundary carries through to oil upgrading (hydrotreating) Green diesel blend stock Status: Completed milestone report 12/15/10 Developed Excel spreadsheet models User-friendly, generally good agreement with Aspen models Submitted publication to peer reviewed journal for autotrophic pathways (Applied Energy)

7. NATIONAL RENEWABLE ENERGY LABORATORY Design Configuration: Autotrophic 7 Lipid Extraction Phase Separation Solvent Recovery Upgrading (hydrotreater) Anaerobic Digestion Algae Growth CO2 Makeup nutrients Recycle nutrients/ water Makeup solventSolvent recycle Spent algae + water Sludge Biogas for energy Flue gas from turbine Hydrogen Offgas Naphtha Diesel Raw oil Power Flocculent Recycle water Blowdown Makeup water CentrifugeDAF Settling 0.05% (OP) 0.4% (PBR) 1% 10% 20% Green = algae cell density

8. NATIONAL RENEWABLE ENERGY LABORATORY Design Basis: Autotrophic Cases 8 Growth stage Open ponds: Unlined raceways Paddle wheel mixing 20 cm depth CO 2 feed via sumps, spargers CO 2 scrubbed from “nearby” source PBR Tubular design 8 cm ID x 80 m sections Plastic tubes (“low” cost) Temp control via sprinklers Harvesting Bioflocculation (1°)  flocculation/DAF (2°)  centrifuge (3°) Concentrates algal biomass to 20% solids Extraction Homogenization + butanol solvent extraction Proven technologies in keeping with “baseline” emphasis Extraction is currently a limiting step for scale-up due to scarcity of public data (DOE Algal Biofuel Roadmap) Spent biomass utilization Anaerobic digestion Improves sustainability: generates power coproduct, enables nutrient recycle Shen et al (2009), “Microalgae mass production methods” Bryan Willson (2009), “Solix Technology Overview”

9. NATIONAL RENEWABLE ENERGY LABORATORY Design Configuration: Heterotrophic 9 Lipid Extraction Phase Separation Solvent Recovery Upgrading (hydrotreater) Anaerobic Digestion Algae Growth Concentration (centrifuge) Sugar stream Vent Air Makeup nutrients Recycle nutrients/ water Water/solubles Makeup solventSolvent recycle Spent algae + water Sludge Biogas for energy Flue gas from turbine Hydrogen Offgas Naphtha Diesel Raw oil Power 5% 20% Green = algae cell density

10. NATIONAL RENEWABLE ENERGY LABORATORY Design Basis: Heterotrophic Case 10 Aerobic fermentation Carbon source from cellulosic sugars (corn stover) Leverage NREL expertise, design report models 50% lipid baseline (vs 25% for autotrophic) NREL model: 20% saccharification solids = 110 g/L sugars 50% algae yield = 50 g/L algae 4 day batch time 1,000 m 3 /tank Concentration via centrifuge from 5%  20% All other downstream units equal to AT cases

11. NATIONAL RENEWABLE ENERGY LABORATORY Design Assumptions 11 Base case Open pondPBR Scale of production [MM gal/yr algal oil]10 Algae productivity25 [g/m 2 /day]1.25 [kg/m 3 /day] Algal cell density [g/L]0.54 Lipid content [dry wt%]25% CO 2 consumed [lb/lb algae]1.9 Operating days/yr330 Autotrophic Base case Scale of production [MM gal/yr algal oil]13 (1,000 dry tonne/day corn stover) Sugar sourceCorn stover via NREL cellulosic ethanol design report model Algal cell density [g/L]50 (set per sugar model @20% saccharification solids) Lipid content [dry wt%]50% Algae productivity [g algae/g sugar]0.5 % Sugar conversion95% Operating days/yr350 Heterotrophic

12. NATIONAL RENEWABLE ENERGY LABORATORY Baseline Cost Results 12 $108 Total = $195MM Total = $631MM Baselines show high costs of today’s currently available technologies, opportunities for cost reduction

13. NATIONAL RENEWABLE ENERGY LABORATORY Results: Land, Resource, Cost Assessment 13 Open pondPBRHeterotrophic Yield Lipid production [MM gal/yr]10.0 13.1 Diesel production [MM gal/yr]9.3 12.2 Land Use: Pond/PBR/Fermentor land use [acre]4,820 Total plant land required [acre]7,190 Resource Assessment: Net makeup water demand [MM gal/yr] 1 10,0003,000 -Water evaporated [gal/gal lipid]570250 -Water blowdown to treatment/discharge [gal/gal lipid]43050 Fresh CO2/ sugar demand [ton/yr] 2 145,000 Power coproduct [MM kwh/yr] 3 80100 Naphtha coproduct [gal/yr] 340,000 System cost: Total capital cost (direct + indirect) [$MM]$390$990 Net operating cost [$MM/yr]$37$55 -Coproduct credit [$MM/yr]$6$7 1.Includes evaporation (consumptive loss) plus blowdown (treated offsite) 2. After recycling turbine flue gas + digestion effluent 3.After considering all ISBL facility power demands; includes CO 2 capture step (autotrophic).

14. NATIONAL RENEWABLE ENERGY LABORATORY Sensitivity Analysis: Autotrophic 14

15. NATIONAL RENEWABLE ENERGY LABORATORY Sensitivity: Ponds 15 More “bang for the buck” targeting lipids vs growth rate (Realistically, cannot maximize both simultaneously) [1] Benemann, J. et al., “Systems and Economic Analysis of Microalgae Ponds for Conversion of CO 2 to Biomass.” Final Report to the Department of Energy, Pittsburgh Energy Technology Center (1996) DOE/PC/93204-T5 [2] Hassannia, Jeff. “Algae Biofuels Economic Viability: A Project-Based Perspective.” Article posted online: http://www.biofuelreview.com/content/view/1897/1http://www.biofuelreview.com/content/view/1897/1

16. NATIONAL RENEWABLE ENERGY LABORATORY Sensitivity: PBR 16 Tube cost = 50% of total production cost

17. NATIONAL RENEWABLE ENERGY LABORATORY Relevance 17 The baseline models and analysis are supporting a number of program activities and milestones For example: GREET algae analysis Models are important for development of cost-competitive biofuels from algae Baseline results demonstrate that for systems modeled, fuels production is not yet cost competitive with current fossil fuels High-value coproducts required to improve economics Significant R&D required The analysis thus far shows primary cost drivers are lipid content and growth rate This analysis can serve a wide variety of stakeholders Industry (analysis facilitates communication between industry and DOE) Research community Decision makers

18. NATIONAL RENEWABLE ENERGY LABORATORY Success Factors 18 Success Factors: –Maintaining close interaction with researchers is crucial –Transparent communication of all assumptions and results to ensure proper use of data –Buy-in from all stakeholders is critical –Common financial assumptions for program Challenges –Much of the current model data is derived from literature. Experimentally verified data will be more meaningful –Several process unit operations possess high degree of uncertainty Harvesting Extraction –There are many possible combinations of process technology and configuration not currently modeled –Scalability of technologies –Sustainability (e.g. water and resource requirements)

19. NATIONAL RENEWABLE ENERGY LABORATORY Future Work 19 Publication Incorporate technologies under development into models Assist DOE in target development for algae Sustainability analysis Analyze feasibility of using wastewater / alternative water sources Investigate lower-cost materials for PBR Comparative analysis for heterotrophic vs. autotrophic over time Investigate process alternatives NREL, Sept, 2010, Pic #18229

20. NATIONAL RENEWABLE ENERGY LABORATORY Summary 20 Rigorous algae baseline technoeconomic analysis and user models have been developed for the Biomass Program and algae community 3 pathways: open pond, photobioreactor, heterotrophic Models currently calculate high costs for algal biofuels Primary cost drivers are lipid content and yield Models will be useful in assisting DOE with target development and research interaction Thank you to…. Biomass Program Algae Team (Valerie Sarisky-Reed, Joyce Yang, Ron Pate, Joanne Morello, Zia Haq, Leslie Pezzullo, Paul Bryan, Brian Duff, Alison Goss Eng, Christine English, Dan Fishman) NREL researchers: Phil Pienkos, Lieve Laurens, Eric Jarvis, Eric Knoshaug, Mary Biddy, David Humbird, Abhijit Dutta, Danny Inman National Laboratory partners: (INL, PNNL, ORNL, ANL, SNL) NAABB (Jose Olivares) Industrial partners

21. NATIONAL RENEWABLE ENERGY LABORATORY Publications 21 Ryan Davis, Andy Aden, Philip T Pienkos. Techno-Economic Analysis of Autotrophic Microalgae for Fuel Production. Submitted for publication to Applied Energy (2011, in review). Davis, Ryan. November 2009. Techno-economic analysis of microalgae-derived biofuel production. National Renewable Energy Laboratory (NREL)