Analyzing Algal Biofuels’ Path Towards Cost Parity

Despite a sudden peak in investments into algae-related projects during the 2009 “summer of algae,” algal biofuels failed to make any commercial progress as hype gave way to reality and economics. For this report, we built a detailed cost model to analyze the economic viability for algal biofuels. We analyzed the effects of algae strain advancements - productivity, lipid content, and nutrient uptake – and improvements in process efficiency – algae harvesting and algal oil extraction. We then analyzed the effects of electricity price and carbon dioxide price on algal oil production costs to assess the economic viability and identify key technology improvements necessary to drive down the cost of algal biofuels production at commercial scale.