A financial assessment of two alternative cultivation systems and their contributions to algae biofuel economic viability

James W. Richardson; Myriah D. Johnson; Xuezhi Zhang; Peter Zemke; Wei Chen; Qiang Hu

doi:10.1016/j.algal.2013.12.003

A financial assessment of two alternative cultivation systems and their contributions to algae biofuel economic viability

James W. Richardson, Myriah D. Johnson, Xuezhi Zhang, Peter Zemke, Wei Chen, Qiang Hu

Agribusiness, Morrison School of

Research output: Contribution to journal › Article › peer-review

175 Scopus citations

Abstract

The Farm-level Algae Risk Model (FARM) is used to simulate the economic feasibility and probabilistic cost of biomass and bio-crude oil production for two projected algae farms. The two farms differ in their cultivation system: an open raceway pond (ORP) and a photobioreactor (PBR). The economic analysis incorporates production, price, and financial risks the farms will likely face over a 10-year period. Current technology for both cultivation systems is assumed with an emphasis on the differences in biomass production, lipid content, culture crashes, and dewatering and extraction costs. Results of the analysis indicated that with current prices and technology neither cultivation system offers a reasonable probability of economic success. The total costs of production for crude bio-oil is 109$gal^-1±45 x-σ for an ORP and 77gal^-1±25 x-σ for a PBR. Further analysis revealed that for every 1% increase in biomass production annual net cash income is increased 0.21% for an ORP and 0.10% for a PBR.

Original language	English (US)
Pages (from-to)	96-104
Number of pages	9
Journal	Algal Research
Volume	4
Issue number	1
DOIs	https://doi.org/10.1016/j.algal.2013.12.003
State	Published - 2014

Keywords

Cost of production
Farm-level algae model (FARM)
Monte Carlo simulation
Net cash income
Open raceway ponds
Photobioreactor

ASJC Scopus subject areas

Agronomy and Crop Science

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10.1016/j.algal.2013.12.003

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title = "A financial assessment of two alternative cultivation systems and their contributions to algae biofuel economic viability",

abstract = "The Farm-level Algae Risk Model (FARM) is used to simulate the economic feasibility and probabilistic cost of biomass and bio-crude oil production for two projected algae farms. The two farms differ in their cultivation system: an open raceway pond (ORP) and a photobioreactor (PBR). The economic analysis incorporates production, price, and financial risks the farms will likely face over a 10-year period. Current technology for both cultivation systems is assumed with an emphasis on the differences in biomass production, lipid content, culture crashes, and dewatering and extraction costs. Results of the analysis indicated that with current prices and technology neither cultivation system offers a reasonable probability of economic success. The total costs of production for crude bio-oil is 109$gal-1±45 x-σ for an ORP and 77gal-1±25 x-σ for a PBR. Further analysis revealed that for every 1% increase in biomass production annual net cash income is increased 0.21% for an ORP and 0.10% for a PBR.",

keywords = "Cost of production, Farm-level algae model (FARM), Monte Carlo simulation, Net cash income, Open raceway ponds, Photobioreactor",

author = "Richardson, {James W.} and Johnson, {Myriah D.} and Xuezhi Zhang and Peter Zemke and Wei Chen and Qiang Hu",

note = "Funding Information: Funding for this project was provided in part by the US Department of Energy through contract DE-EE0003046 to the National Alliance for Advanced Biofuels and Bioproducts (NAABB) and Texas A&M University as well as the US Department of Energy contract DE-EE0003372 to the Sustainable Algal Biofuels Consortium.",

year = "2014",

doi = "10.1016/j.algal.2013.12.003",

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pages = "96--104",

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AU - Richardson, James W.

AU - Johnson, Myriah D.

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AU - Zemke, Peter

AU - Chen, Wei

AU - Hu, Qiang

N1 - Funding Information: Funding for this project was provided in part by the US Department of Energy through contract DE-EE0003046 to the National Alliance for Advanced Biofuels and Bioproducts (NAABB) and Texas A&M University as well as the US Department of Energy contract DE-EE0003372 to the Sustainable Algal Biofuels Consortium.

PY - 2014

Y1 - 2014

N2 - The Farm-level Algae Risk Model (FARM) is used to simulate the economic feasibility and probabilistic cost of biomass and bio-crude oil production for two projected algae farms. The two farms differ in their cultivation system: an open raceway pond (ORP) and a photobioreactor (PBR). The economic analysis incorporates production, price, and financial risks the farms will likely face over a 10-year period. Current technology for both cultivation systems is assumed with an emphasis on the differences in biomass production, lipid content, culture crashes, and dewatering and extraction costs. Results of the analysis indicated that with current prices and technology neither cultivation system offers a reasonable probability of economic success. The total costs of production for crude bio-oil is 109$gal-1±45 x-σ for an ORP and 77gal-1±25 x-σ for a PBR. Further analysis revealed that for every 1% increase in biomass production annual net cash income is increased 0.21% for an ORP and 0.10% for a PBR.

AB - The Farm-level Algae Risk Model (FARM) is used to simulate the economic feasibility and probabilistic cost of biomass and bio-crude oil production for two projected algae farms. The two farms differ in their cultivation system: an open raceway pond (ORP) and a photobioreactor (PBR). The economic analysis incorporates production, price, and financial risks the farms will likely face over a 10-year period. Current technology for both cultivation systems is assumed with an emphasis on the differences in biomass production, lipid content, culture crashes, and dewatering and extraction costs. Results of the analysis indicated that with current prices and technology neither cultivation system offers a reasonable probability of economic success. The total costs of production for crude bio-oil is 109$gal-1±45 x-σ for an ORP and 77gal-1±25 x-σ for a PBR. Further analysis revealed that for every 1% increase in biomass production annual net cash income is increased 0.21% for an ORP and 0.10% for a PBR.

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A financial assessment of two alternative cultivation systems and their contributions to algae biofuel economic viability

Abstract

Keywords

ASJC Scopus subject areas

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