the remaining $307 million for construction of demonstration- and commercial-scale biorefineries, advanced biofuels research, and ethanol research.
“I think what’s really great is that we were immediately contacted by a couple of national laboratories that want to collaborate,” Kay said. The labs represent a good match, Kay added, because the National Renewable Energy Laboratory (NREL) in Golden, CO, and the Sandia National Laboratory in Sandia, NM, are not as strong on the biological side of their renewable energy programs.
Kay said another encouraging outcome is that eight or nine companies have approached him about participating in the San Diego Center for Algae Biotechnology, and are particularly interested in helping to sponsor an economic life-cycle analysis of the algae-based biofuels industry. The companies that have actually committed include Sapphire Energy, the San Diego algae-to-biofuels company, and Biolite, a new startup founded in the San Diego area by Michael Melnick of San Francisco-based CMEA Ventures. Such a study would assess the overall cost and economic impact of developing the industry necessary to produce algae-based fuels such as diesel, gasoline and jet fuel. To avoid the missteps made by corn-based ethanol producers, Kay said, “We also want an environmental assessment done to evaluate the energy cost of each one of the steps in the process.”
San Diego’s recent series of algae-related events did not result in a checklist of core issues that need to be addressed, said Lisa Bicker, CEO of Cleantech San Diego, a nonprofit industry group. But she identified unanticipated regulatory issues as one area that poses a challenge to San Diego’s emerging algae-based technology cluster. Startups that plan to grow algae in ponds or tanks, for example, would likely have to comply with regulations established by California’s State Water Resources Control Board. If San Diego’s algae-based biofuel startups are serious about building large-scale demonstration plants, Bicker added, “We need to get serious about the industry’s infrastructure needs. We did not go into what those issues mean in depth.”
Kay has said that roughly 1 percent of what the government has put into biomedical research has gone to plant and microbial research—and only about 1 percent of that has gone into research that focuses on algae. As a result, starting an algae-based renewable energy company poses more risk than a biotech startup that is based on a huge foundation of biomedical research. Nevetheless, Kay said, “There’s enough justified optimism about algae that we really want to put the research in to determine if it’s going to be economically feasible.”
