NEW YORK--Virent Energy Systems later this year will open a demonstration plant that will convert sugar water into the chemical equivalent of gasoline.
The company is now in the process of raising a C round of funding to build the facility in Madison, Wis., which is scheduled to be open by the third quarter of this year, said Virent Energy CEO Lee Edwards.
(Credit:
Virent Energy Systems.)
The pilot plant will be able to produce 10,000 gallons a year of liquid hydrocarbons--either gasoline, jet fuel, or diesel, he said. The feedstock can be sugar cane, sugar beets, or other plants.
Edwards spoke at the Jefferies Clean Technology Conference here this week where he made pains to point out that the biofuel company does not produce ethanol.
"Virent is one of few companies that convert biomass directly into hydrocarbons. The molecules we make are exactly the same as the ones that you use to drive vehicles today. It just so happens that ours are made from sugar water," he said.
The company has raised $70 million to date--$30 million from venture capital and $40 million from government funds and large corporate partners. One investor is Cargill, which provides expertise on securing low-cost biomass feedstocks, and another is Honda, which is testing Virent Energy's fuels in engines.
The technology's roots come from the University of Wisconsin where researchers developed catalysts for converting sugars in plants into hydrogen. Engineers later altered the process to make hydrocarbons. The company, founded in 2002, is now producing a liter a day of fuel at its Madison facility, said Edwards, who was president and CEO of BP Solar before joining the company.
A significant element to the technology is that the chemical reactions in the process produce heat. That means the manufacturing fuel will not require putting in a lot of energy, which keeps the production costs down, Edwards said.
Virent Energy claims that its fuels will be carbon-neutral over the entire lifecycle of production and use. Edwards said that there is some variation on the total carbon emissions from its process based on feedstocks and land use variables. Its tests show that the gasoline it produces will be 102 octane and have lower levels of air pollutants, he added.
There is a lot of research and commercial work to make hydrocarbon biofuels, which have a higher energy density than ethanol. Synthetic biotech companies including Amyris and LS9 are genetically engineering microbes specifically for that purpose.
Virent Energy, by contrast, uses catalysts made of different metals including platinum, which is expensive but can be reused.
"Chemical engineers of the world love catalytic processes...because you can control the yield and scale," Edwards said. "It allows us to make a refinery from different (and the least expensive) feedstocks."
Another advantage of biohydrocarbons is that they can be fed directly into existing fuel pipelines. Water used in the process can be treated and reused, Edwards said.
Because building a full-scale 100 million-gallon-per-year plant costs about $200 million to build, Virent Energy plans to establish joint ventures to build its first refineries, he added.
He said in the long term he anticipates the company can compete without subsidies for domestically made biofuels. "At some point, biomass is a viable alternative with superior margins to crude oil."
Bill Gates' investment firm is funding Sapphire Energy, a company that intends to make auto fuel from algae.
Sapphire Energy said Wednesday that a series B round will bring the total amount it has raised to more than $100 million. Investors include Gates' investment firm Cascade Investment, as well as Arch Venture Partners, Wellcome Trust, and Venrock.
The lowly algae is the renewable fuel industry's great green hope. Because algae is rich in oil and can grow in a wide range of conditions, many companies are betting that it can create fuels or other chemicals cheaper than existing feedstocks.
So far, no company has made cost-competitive fuel at large scale from algae. But a handful predict they will within three years.
San Diego-based Sapphire Energy said last year that it has successfully made its product, Green Crude, which yielded 91 octane gasoline from algae.
Its process can use algae to yield a range of fuels, including the chemical equivalents of gasoline, jet fuel, and diesel. It has a test facility in New Mexico.
The series B equity will help the company build out its operations with a target of producing 10,000 barrels per day of fuel from algae and help it operate at commercial scale within three to five years.
Sapphire Energy has not provided many details publicly about its technology except to say that it doesn't need fresh water to grow the algae and that it has assembled a team with expertise in cell biology, plant genomics, and algal production.
The stake in Sapphire Energy is not the first foray into alternative fuels for Gates' Cascade Investments. The firm invested in Pacific Ethanol, but later sold its shares as the company's stock price fell.
Sapphire Energy has come out stealth mode, saying it's producing the chemical equivalent of gasoline from algae.
The San Diego, Calif.-based company also disclosed that it has raised $50 million from Arch Venture Partners, Venrock, and the Wellcome Trust.
From green scum to black gold?
(Credit: Sapphire Energy)Formally launched last May, Sapphire said Wednesday that it has hired Brian Goodall, who led a team of engineers responsible for a cross-Atlantic flight that used algae-based fuel earlier this year.
Sapphire's "green crude" has been certified with a 91-octane rating, but the company disclosed few details about its technology.
Its process can grow algae using wastewater, and the executive team said it is confident that the technology can scale up to produce gasoline on a commercial scale.
Algae is touted as the feedstock with perhaps the most promise for growing fuels; a number of companies are developing algae farming technologies.
Sapphire said that it developed an algae process to avoid the controversy over using land for fuel crops instead of food crops.
But at this point, algae fuels are largely experimental and no company is making fuel on a commercial scale.
GreenFuel Technologies, which had to scale back a pilot site, said that it has landed a large European customer to make fuel from algae but has not shared any more information.
Sapphire is not the only company creating technology to make hydrocarbons from plants. Others include LS9, Amyris Biotechnologies, Codexis, and J. Craig Venter-founded Synthetic Genomics.
The advantage of this approach is that the fuels can be integrated into existing transmission infrastructure and can run in cars or planes without modification.
Update on May 30: Corrected name of Arch Venture Partners.
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