The term "algae" is used for a broad set of organisms that can make food from sunlight but are not plants. All common forms of algae photosynthesize, meaning they capture light, and change it into energy.
Some algae are bacteria- they are known as the cyanobacteria. Other algae use the chemical processes from cyanobacteria to make sugars- this is because the ancestors of all algae ate cyanobacteria but did not digest it.
The study of algae is called phycology or algology.
The growing level of excitement about the commercial utilization of algae is a combination of the following algae attributes and benefits:
its unique potential to convert sunlight, water and carbon dioxide into biomass and oxygen, and do so with a much higher productivity potential than other terrestrial sources of biomass;
opportunities for direct conversions into energy and food and an assortment of value-added products;
the inherent sustainability advantages in contrast with other biomass sources in that algae is abundant, does not require cultivable land to grow, and is able to recycle the water it requires; and,
a set of potential positive co-location benefits for synergistic algae production.
Expected Commercialization Paths
Bioenergy: Algae's rapid growth rate and substantial cellular content of lipid oils for biodiesel and starch / polysaccharides for ethanol positions algae biomass as an attractive high-impact, high-volume biofuel source. In addition, as an alternative form of bioenergy, algae can also be harvested and placed into an anaerobic digester to produce methane for electricity generation.
Feedstock: While algae does not currently occupy a central place in the human food chain such as corn, soy or other oil seed crops for human consumption; certain algae, such as Spirulina, are currently used as nutritional supplements. In addition, many indirect human consumption paths potentially exist. For example, one envisioned co-product of algae production is for high-protein agricultural feed, which are already being used as supplement fish food and can be expected to also impact animal feed markets.
Value-Added Products: Processed algae also has the prospect to participate in new processes and markets for more sustainable value-added products including pharmaceutical, neutraceuticals, replacement agricultural fertilizers and manufactured green products from algae-derived biopolymers.
Sustainability Attributes
Greenhouse Gas and Air Pollution Remediation Benefits: Algae is a highly efficient photosynthesis machine. Carbon dioxide (CO2) is a requirement for this photosynthesis process. The industry is still wrestling with consistent terminology to describe the benefits large-scale algae growth presents with terms such "sequestering" CO2, "capturing" CO2, and "bio-fixing" CO2 being equally used to describe these attributes. It could be that actually all three will ultimately apply depending on the algae growth and utilization path used. However, they all share the same underlying premise that algae commercialization represents a potential opportunity to reduce carbon dioxide intensity by getting more energy out of each unit of CO2 released. This benefit has the potential to be leveraged by sourcing the CO2 from waste CO2 from existing industrial processes such as flue gas from fossil fuel electricity plants and new waste-to-energy facilities. Initial studies indicate with careful control of pH and other physical conditions opportunities exist for greater than 90% utilization of injected waste CO2 and other greenhouse gases.
In addition to greenhouse gas remediation benefits, algae is anticipated to provide air pollution remediation benefits because it can also absorb SOx and NOx during algae growth; two compounds which cause acid rain.
Water Remediation Benefits: Algae systems use far less water than traditional oilseed crops. Also, many species flourish in brackish, saline and wastewater and present opportunities to both remediate and recycle precious water resources.
Our region is envisioned to have several distinct and inter-connected advantages to allow our area to both realize the algae opportunities discussed above and also to seize and solidify global leadership as the center of an emerging algae industry:
Existing Algae Knowledge Center: San Diego is already recognized as a leader in the intellectual property development of key areas of the algae growth, harvesting, and conversion life cycle. It is expected that our region has a promising opportunity to continue to leverage the area's resources, expertise, and institutions to create valuable products and processes that can be used world-wide in the developing algae industry. Similar to value-creation strategies in the region's Life Science sector, it is envisioned this will be accomplished by accelerating basic and applied research initiatives already underway to take present and new discoveries through to license for both existing companies or via strategically created startups. A newly formed entity, the San Diego Center for Algae Biofuels, will be leading this effort.
Large Scale Commodity Production Capabilities: Through a series of coordinated strategic initiatives, an opportunity exists to leverage the Imperial Valley and Northern Baja's unique attributes of abundant sunshine, large areas of both arable and non-arable land, and water remediation opportunities to establish these two areas of the region as a recognized center of large-scale sustainable algae cultivation and production.
Collaborative Culture and History of Launching New Industries: San Diego has a rich heritage of collaboration. This collaborative culture has nurtured the dramatic growth of some of our nation's most dynamic clusters of science and technology innovation. As will be explained in more detail in other sections of this briefing book, the algae industry can expect to be a beneficiary of this culture and also be means to expand this culture more directly to Imperial Valley and Northern Baja. The algae industry will have several prototype industries with active support infrastructure to model ways to facilitate interchange among business and technology interests leading to commercialization of technology
There are significant high-level challenges to realizing algae's commercial potential. The biggest challenge is economics. As discussed below, major hurdles exist across the algae growth and process-value chain including that companies must grow algal biomass at a low enough cost to make it worth processing, find a cost-effective way to separate the algae from water, extract something of value from the algae and stabilize that product to make it market-ready.
Propagation: Efficient and stable mass culture of algae is a core issue in algae production. This includes the challenges of selection of proper algal strain, identifying the optimal growing conditions, and maintaining strain stability for monoculture crops. In addition, commercialized algae will require proper nutrients. As an example, ironically, sourcing of optimal levels of CO2 for commercial scale production will be a non-trivial matter for large scale production. Finally, large scale production will require advanced process engineering to increase yields and reduce costs of production.
Harvesting: Algae harvesting must generally occur on a daily basis in order to reach maximum growth and propagation potentials; however, harvesting involves separating and drying a few hundred pounds of microscopic particles from hundreds of thousands of gallons of media. While several technologies are currently in use, there is a strong need for new harvesting technologies that will increase efficiency and decrease cost of production.
Extraction / Conversion: Many challenges exist for successful extraction and conversion of the broad spectrum of prospective algae product. This is most evident in developing means to achieve cost-effective and efficient lipid extraction and oil purification for biofuels and biopolymers. Oil extraction is considered one of the most expensive processes in algae to biofuel process and is an area of active research and need in the algae biofuels production chain.
Integration: There are many unknowns in way to demonstrate economic models to achieve co-location synergies from waster water remediation, power generation and greenhouse gas sequestration. Processes need to continue to evolve and more working demonstration plants must be developed and engineered.
The primary regional challenge is the lack of current knowledge about the path and issues involved around how to best take the discoveries made in the labs of San Diego and elsewhere and scale them to large, cross-regional, agricultural commodity operations. Four of the initial challenges include:
Economic Metrics: Global economic metrics are beginning to be developed that incorporate not only options along the algae production cycle but also begin to differentiate potential algae outputs such as energy, fertilizer, health products, pollution control, food products, etc. A parallel path is necessary to assess these economic metrics at the regional level. This process is in it nascent stage. The application of existing and evolving agriculture metrics has been offered as a place to begin this analysis. Others suggest that these metrics need to be expanded to include opportunities such as the economics of the remediation of the Salton Sea as well as broad-based assessments of the role a regional algae industry in overall regional water economics and climate-mitigation strategies.
Growth, Harvesting, and Processing Impacts: As was illustrated by a head-strong rush to develop corn ethanol, good intentions can have unintended negative consequences. Sustainability concerns must be considered in a proactive fashion. For example, to achieve commercial levels of regional algae production, massive amounts of land, water, and nutrients are going to be needed. While it is presumed this can be addressed in a sustainable and indeed leveraged in a synchronistic fashion, it has not been studied in enough depth to understand these impacts at a scaled-up regional level. Correspondingly, there is need for in-depth analysis to assess regionally how input needs such as water, land, and nutrients can be assessed in a sustainable fashion for algae production. Further, the region needs to anticipate that there will be scrutiny about issues such as the biodiversity impacts of scaling mono-cultures, not to mention potential critics of potentially using genetically-modified algae strains. These and many of other similar questions need to considered both top-down and bottom up and include formalized energy balance studies, lifecycle cost assessments, etc. Some of this is already underway at a national level and the lessons can be applied locally. Also, individual companies, such as Carbon Capture are looking at regional impacts at the company level.
Compliance with Broad Set of Regulatory Issues: Similarly, it is important that a regional algae industry understand and plan for compliance with existing laws and regulations that may impact algae production.
Workforce, Infrastructure and Broader Economic Development Challenges: Scaling algae into a broad-based regional agricultural commodity will require an inventory and in-depth understanding of cross-regional assets, strengths, gaps, etc.
Abundant sunshine, world-class microbial, marine, and genetic research strengths, large areas of both arable and non-arable land nearby, and strong societal interests in alternative fuels, water conservation, and sustainability all exist in this region, making the region a natural potential incubator and catalyst for commercial algal development.
As discussed below, this can potentially translate into a coordinated set of efforts that will be take place across the Imperial Valley, North San Diego County, the City of San Diego, the South Bay region, and the northern portion of Baja California, Mexico. In addition, while this will result in economic benefits locally, we also expect to have initiatives that extend to partners across the globe.
San Diego: From research to commercialization, the coming combined regional algae industry is extremely fortunate in that it has the potential to be able to plug into several initiatives which are already under way to allow San Diego to become a leader in clean technology. Examples include the cities of San Diego and Chula Vista which are developing clean technology clusters which will allow the algae industry to draw upon an established network of local entrepreneurs, educators, researchers, environmentalists, and investors. These two initiatives have also been active in promoting, fostering, and coordinating strategic alliances and collaboration among local, regional, state, and federal institutions to develop and execute a clean technology business attraction strategy for the broader San Diego area.
San Diego is also connected to the state-wide Cleantech Venture Network which can potentially allow individual algae start up companies to reach out to a global network of investors, companies and professional service providers. UCSD, which has developed a campus-wide Environment and Sustainability Initiative, is also envisioned to be yet another valuable in-place resource along with the aforementioned San Diego Center for Algae Biotechnology.
Finally, an entire set of institutions developed to grow the region's biotech and high tech sectors, including Connect, Global Connect, and the San Diego Economic Development Corporation, are resources that the algae industry will be able to leverage over time.
Imperial Valley: Technologies and process discoveries from the efforts described above are expected to find application with pilot projects being considered across the region. However, unlike the majority of competing regional areas, incubated algae companies will also find the ingredients they will need for large scale commercialization - water, sunlight, nutrients, carbon dioxide - in very close proximity and in quantities large enough to generate a meaningful amount of algae in the Imperial Valley. With few equals, the Imperial Valley has some unusual, but ideal, physical resources for large scale algae commodity growth - degraded land around the Salton Sea that has become unsuitable for agriculture, but suitable for algae ponds - and abundant sunshine. The algae industry will benefit from an existing partnership between San Diego and Imperial Counties to formally designate themselves as a "Mega-Region". As a first step, the U.S. Department of Commerce awarded the San Diego Regional and Imperial Valley EDCs a $225,000 grant in March of 2008 to develop a Mega-Region strategy for global competition. The grant is the first of its kind awarded by the Federal Government. Through coordination with these initiatives, the regional algae industry can potentially piggy-back on their efforts to develop and implement studies and projects to specifically explore the feasibility of large scale algae production in the Imperial Valley.
Northern Baja: Due to the close connection that exists between San Diego, Imperial Valley, and Baja California many already treat the area as one regional economy that spans the border. In addition to heavy flows of people, the two sides of the border have similar industry mixes and attract foreign investment from the same global partners. Ways to enhance this connection are being evaluate under this same Mega-Region Initiative describe above, with specific emphasis on developing economic strategies to enhance the global competitiveness of the coordinated region, with a focus on workforce and infrastructure. The intent is to ensure that high-wage industries flourish within the larger Mega-Region by creating an economic environment attractive to greater outside investment. Strategies are being considered to include the concept of growing an integrated algae industry into this initiative.
Also, the algae industry will also be able to benefit from an additional initiative known as the San Diego Dialogue's Cross-border Innovation & Competitiveness Initiative which is exploring how the San Diego-Baja California region can become more globally competitive in key science and technology sectors by leveraging opportunities across our respective borders.
Finally, opportunities for algae commercialization potentially exist both in terms of cross-border research partnerships, and by connecting San Diego and Baja California in high value-added economic clusters that link regional R&D capabilities to manufacturing and service industries in both areas. Along those lines, Baja California's Maquiladora industry is a candidate for evaluation to see if these facilities can play a role in potential advanced manufacturing from biopolymers refined from locally produced algae in both the Imperial Valley and in Northern Baja.
Partners: Other potential stakeholders in the broader geographic and regulatory space could include Riverside County and the State of California. In one such scenario, one manifestation will be to use the region's expected growth of laboratories of discovery and pilot facilities to offer itself up as a "UL Lab" for vetting processes initiated elsewhere. The federal government is also expected to become an integral partner with one exciting possibility being our ability to develop capabilities to use locally grown and processed algae biofuels to supply local demands for green renewable fuels to Marine and Navy ships, planes and vehicles.
Researchers, companies, and investors are engaged and/or are planning various algae-related activities across our region. The following areas represent the current state of that activity:
Basic Research: The San Diego area is widely-recognized for it intellectual resources include world-renowned microbiologists, geneticists, engineers and other subject matter experts on algae. Efforts are underway to continue to expand the area's universities and academic institution's work on core knowledge in biology, physiology, phycology, and genomics - including the establishment of the first international center for science and engineering of photosynthetic microbes - with the goal of both attracting in academics and researchers from other areas and also training the next generation of algae experts. These efforts will have a direct impact on Advanced RD&D and early-stage commercialization efforts that will impact both San Diego and the broader region.
Advanced RD&D: The region has already made great strides in being recognized as an advanced algae research and development leader. UCSD and other San Diego-area scientists are currently involved in RD&D projects to build upon the discoveries from basic research. Examples include efforts to enhance the ability to generate oil and other hydrocarbons produced by algae as well as novel fermentations that convert cellulose-derived sugars into oil-like molecules. San Diego is also in the top position for funding from the multi-million dollar DARPA project to create jet fuel for the military from algae - with the top three bids located in La Jolla. Imperial Valley also several companies with advanced RD&D programs.
Private Enterprise: The region has several existing and start-up companies which are investigating myriad algae growth and cultivation processes and the derivation of commercial products. These include companies that are existing leaders in growth and cultivation of algae for nutraceutical purposes, aquaculture, and pioneers in the use of algae for biofuels.
Infrastructure: A number of parties are actively involved in taking the combined basic, applied, and entrepreneurial efforts described above to help our various energy and water utility companies to meet demand for expanded fresh water sources and to meet California's mandated climate change guidelines for renewable energy. The area's utilities have expressed interest about exploring the use of algae for carbon emission capture and CO2 re-use from their existing and future fossil-fuel power plants. Similarly, there has been an expression of interest by the region's various water districts in the use of algae for waste water nutrient remediation and recycling using waste water for value added projects.
Our region is considered a leader in the global innovation economy and is renowned for its track-record for collaborating on the conceptualization and establishment of nascent industries. The hope is that the emerging algae industry will build upon this lineage. Several initial convergence opportunities from existing key "industry clusters" have been identified and include:
Life Sciences: In addition to the area's universities and other academic institutions, the private life sciences sector is expected be able to provide intellectual resources that are world-renowned including microbiologists, geneticists, and engineers.
Technology-Based Industries: Process engineering will impact a vast cross-section of algal growth, harvesting, and refining challenges. With its cutting-edge research and leadership from its numerous high-tech companies, San Diego is in a unique position to meet these challenges through coordination and integration of existing industry expertise and functions.
Defense Industries: San Diego's defense industry, long a workhorse of the San Diego regional economy, remains a major economic force today. The region is home to the Space and Naval Warfare Systems Center (SPAWAR), with more than $1.2 billion annually in contracts and salaries in the San Diego region. The algae industry has already made progress into tapping into the depth of business, labor force talent and experience from the companies that make up this industry, especially for advanced RD&D initiatives. Companies such as SAIC and General Atomics are already participating in algae commercialization activities. It is expected other companies will follow as San Diego becomes a large-scale, internationally recognized regional "test bed" that integrates, evaluates, and publicizes innovations in the algae commercialization field.
Agriculture: Agriculture is the leading industry in both the Imperial Valley and the Mexicali Valley in Baja California. They both lie within the Salton Sea watershed. Although this region is a desert, with high temperatures and low average rainfall of three inches (seventy-five mm) per year, the economies in both areas have been able to be heavily based on agriculture due to the availability of irrigation water. On the Imperial Valley side this water is supplied wholly from the Colorado River via the All-American Canal. Roughly 2.8 million acre-feet of water are used per year to grow the crops and livestock. Irrigation water is delivered via 16,000 miles of canals managed by the local water company, the Imperial Irrigation District. Most of the water is delivered by gravity as the valley is tilted slightly to the north. Current water price is $14.56 per acre-foot (326,000 gallons) delivered to the farmer's headgate. Whether the algae industry grows as an addition to or as a crop substitute for existing agricultural practices in the region is an open question at this point.
As mentioned several times, San Diego has several successful models for building emerging industries including its defense, biotech and high tech sectors. In addition to a compelling vision and a collaborative spirit, each of these industries also required an investment in a combination of advocacy, capital, policy, and human resources to grow and prosper. There are many potential institutional allies whose resources and expertise can be brought to bear to help accomplish the same for the algae industry.
Advocacy: CleanTECH San Diego, a new non-profit membership organization formed to accelerate San Diego as a world leader in the overall clean technology economy has committed itself as a willing partner to the emerging algae industry and has offered its catalytically services on a series of advocacy programs including education and outreach, mentoring, and leadership development. Through their relationships the algae industry will be able to connect with leaders from business and finance, academic and research institutes, and government and non-profit organizations. In addition, the algae industry has another willing resource in the work of the Sustainability Task Force of the San Diego Partnership for the Global Economy. This initiative can help the algae industry to more specifically identify where potential dynamics between the area's industry sectors can pool resources and converge to create new applications and entirely novel technology applicable to meet the needs of the emerging algae industry.
Policy: The regional algae industry should expect to leverage interests from the regional EDC's and other similar organizations to connect with local, state and federal policy makers to identify policy development that best supports innovation and commercialization efforts. This approach should also allow the emerging regional algae industry to be in a better position to proactively work with environmental and conservation organizations to identify and address ecological impacts of prospective algae commercialization operations.
Capital: Differing funding paths exist to meet the needs of the region's differing components of the algae industry. In general terms, basic research and discovery will rely upon grants, applied research and development will respond to proposals, private enterprises will seek out risk capital, and large scale commercialization will look for project financing sources. The regional algae industry has unique societal attributes that could make it a potential recipient of alternative funding sources especially in the areas of traditional philanthropic and new generation social venture capital.
Several success stories already exist across each of these categories. Looking to future, it is felt that the ability of each segment to secure additional funding will be enhanced by the existence of the other. It is not clear what the role of a regional algae economic development entity would be in this process, but it is presupposed that any effort made to brand and promote the holistic algae industry as a Mega Region would be beneficial.
Human Capital: As mentioned previously, San Diego already has most of the world's experts in algae genetic engineering and physiology and biochemistry, and the Imperial Valley is home to some the leading experts in commercial algae enterprises. While the region is currently way ahead of other regions because of the concentration of algae scientists and existing entrepreneurs in the area; the emerging industry will need to continue to attract and grow talent that can help translate technology from discovery to industry to commodity scale-up. Initial institutional resources and programs include:
There has been a strongly articulated need to focus on developing a larger critical mass of basic science in biology and engineering. One component that is well along in the planning stages is an Algae Academic Research Center which will be located at UCSD. It is actively making the case for more Academic FTEs and additional infrastructure to establish that center.
Initiatives such as the Global Connect Fellows program are resources the algae industry can utilize to actively enhance the industry's human capital resources.
Finally, the broader EDC Mega-Region initiative's focus on workforce development alongside entities such as the US Department of Commerce should provide a research channel to understand and nurture the regional algae workforce needs.
