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Potential biofuel production from wastewater treatment using Microalgae:

A proposal to District Department of the Environment (DDOE)

Distributed by:
District Department of the Environment
Professor Simon Nicholson
Written by Hossein Kharazi
May 3rd 2015


Table of Content:

Executive summary
Benefits of Algae biofuel production
Water management, conservation and recycling
Algal biofuel conversion technologies
Co-location of algal cultivation facilities with CO2 emitting industries
Potential benefits of algae production with waste water treatment
The benefits of algal biofuels Public-Private Partnership framework


Executive Summary:
This Project recommends the District Department of the Environment (DDOE) to
create a framework to merge the public and private sector to produce sustainable biofuels
resources in order to;
1. Accelerate the commercialization of third generation algae biofuel energy since
this technology has reached its technological maturity and is ready to enter the
phase of commercialization.
2. Ensure the supply of sustainable biofuel resources for Washington D.C. locally in
order to reduce dependence on foreign oil markets.
Furthermore, DDOE has set up plans and visions to become the leader in
environmental sustainability by increasing energy efficiency, waste management and
recycling, mitigating GHG emissions and improving water quality in terms of
rehabilitating the ecosystem and the water quality especially in the Anacostia River and
Chesapeake bay. These goals and targets will become more achievable as using
wastewater from urban or agricultural sources can produce algal biofuel.
Therefore, the cultivation of algae biofuels and other co-products can be a
solution to tackle wastewater treatment, mitigating greenhouse gas emissions as well as
ensuring energy security. The cultivation of algae can benefit other schemes developed
by the DDOE, such as Energysmart DC in terms of producing sustainable sources of
methane gas and different forms of biofuels and the Riversmart programs in terms of
dealing with wastewater treatment.


One negative characteristic of globalization is the increasing overreliance of local
communities on imported sources of energy. The United States currently imports over
57% of its petroleum demand. Furthermore, the US consumed 23% of the worlds
petroleum in 2008, while holding less than 2% of the worlds oil reserves (Grewal &
Grewal, 2012). The rising global demand for crude oil, especially in rapidly developing
countries is contributing to further
petroleum reserves. In light of these issues, the combustion of fossil fuels has created
serious concerns about climate change from the greenhouse gas (GHG) emissions (Ferrel
& Sarisky-Reed, 2010).
Moreover, this dependence on imported energy is mostly disastrous to local
economies and the environment. Although cities occupy less than 3% of the earths land
surface, they consume 75% of total global energy and are responsible for producing 80%
of all GHG (Grewal & Grewal, 2012). The growing urban population and its increasing
dependence on transportation for energy, raw materials, and goods are placing earths
life-support systems at risk (Grewal & Grewal, 2012). These risks lead the United States
government to take certain policy measures to reduce its reliance on importing fossil
In 2007, the Energy Independence and Security Act (EISA) was enacted to set
new standards for vehicle fuel economy, provisions to promote the use of renewable
fuels, energy efficiency, and new energy technology research and development (Ferrel &
Sarisky-Reed, 2010). The Renewable Fuels Standard (RFS) mandate established within
EISA. The RFS mandates blending of 36 billion gallons of renewable fuels by 2022, of

intensify the com


which only 15 billion gallons can be produced from corn-based ethanol. Biofuels derived
from algae can meet these longer-term needs of the RFS and represent a significant
opportunity to impact the U.S. energy supply for transportation fuels. This program is
sponsored by The Biomass Program of the U.S. Department of Energy (DOE) and the
Office of Energy Efficiency and Renewable Energy (EERE). The legislation establishes
production requirements for domestic alternative fuels under the Renewable Fuels
Standard (RFS) that increase over time (Table 1.).
Table 1. Renewable Fuel Standard volume requirements (billion gallons)
biofuels and biomass-based diesel are included in the advanced biofuel requirement
(Ferrel & Sarisky-Reed, 2010).

C ellulosic


Currently, the Renewable Fuel Standard (RFS) has not amended to include algae
to the same extent as it currently does to other advanced biofuel feedstocks such as corn
ethanol and cellulosic biofuel

(Algae Biomass Organization, 2015). Albeit the

potentially much higher yield of algae biofuel production, the RFS excludes algae-based
fuels from nearly 80% of the 21 billion gallon advanced biofuels mandate, due to a 16
million gallon carve-out for cellulosic biofuels (Algae Biomass Organization, 2015).
Because algae are not cellulosic in nature, algae-based fuels do not qualify as a
cellulosic for the purpose of meeting the RFSs advanced biofuels mandate (Algae
Biomass Organization, 2015). Furthermore, while algae can be a feedstock for renewable
biomass-based diesel and ethanol, algal biomass could also be utilized to produce
aviation fuels and gasoline both of which are excluded from the carve-outs (Algae
Biomass Organization, 2015).
In order to mitigate the reliance on international sources of energy, the concept of
local self-reliance for energy production is proposed in this paper (Grewal & Grewal,
2012). This concept emphasizes on local production (Grewal & Grewal, 2012) of biofuels
sustainably. This definition does not imply that a self-reliant community be completely
isolated from the rest of the world (Grewal & Grewal, 2012). This principle simply
advocates that a community should have a preference for local production (Grewal &
Grewal, 2012).
A central tenet of the local self-reliance concept is that local policies and planning
are tailored to meet the needs of the community from within its own resource base
(Grewal & Grewal, 2012). When applied to energy, the concept is that a community
should consider local geography and natural resource availability when proposing


solutions to meet its energy demands (Grewal & Grewal, 2012). Hence, This Project
recommends the District Department of the environment (DDOE) to create a framework
to merge the public and private sector to produce sustainable biofuels resources in order
1. Accelerate the commercialization of third generation algae biofuel energy since
this technology has reached its technological maturity and is ready to enter the
phase of commercialization.
2. Ensure the supply of sustainable biofuel resources for Washington D.C.
Furthermore, DDOE has set up plans and visions to become the leader in
environmental sustainability by increasing energy efficiency, waste management and
recycling, mitigating GHG emissions and improving water quality in terms of
rehabilitating the ecosystem and the water quality especially in the Anacostia River and
Chesapeake bay. These goals and targets will become more achievable as algal biofuel
can using wastewater from urban or agricultural sources.
Therefore, the cultivation of algae biofuels and other co-products can be a
solution to tackle wastewater treatment, mitigating greenhouse gas emissions as well as
ensuring energy security. The cultivation of algae can benefit other schemes developed
by the DDOE, such as Energysmart DC in terms of producing sustainable sources of
methane gas and different forms of biofuels and the Riversmart programs in terms of
dealing with wastewater treatment.


Benefit of Algae biofuel production

Slowly several pathways are currently and nearly reaching maturity for the
production of algal biofuels and bio-products. In term of yield, algal biomass offers the
highest in comparison to other traditional feedstock towards biofuel production (Table 2.)
(Shaikh, Hossain, Lucky, Bassi, & Lasa, 2013). Potential oil yields from certain algae
strains are projected to be at least 340 times higher than from corn based ethanol.
Table 2. Comparison of oil yields from biomass feedstocks (Shaikh, Hossain, Lucky,
Bassi, & Lasa, 2013)

Oil Yield (L/ha)

Lands area needed

Percent of US

Oil Palm



M Ha

a For meeting 50% of all transport fuel needs of the United States.

cropping area

b 70% oil (by wt) in biomass.

c 30% oil (by wt) in biomass

Algal Feedstocks can be preferred feedstock for high energy density, fungible
liquid transportation fuels. There are several aspects of algal biofuel production that have
combined to capture the interest of researchers, entrepreneurs and governments around
the world (Ferrel & Sarisky-Reed, 2010):


1. Algal productivity can offer high biomass yields per acre of cultivation than any
other crop.
2. Algae cultivation strategies can minimize or avoid competition with arable land
and nutrients used for conventional agriculture.
3. Algae can utilize wastewater thereby reducing competition for limited freshwater
4. Algae can recycle carbon from CO2-rich flue emissions from stationary sources,
including power plants and other industrial emitters.
5. Algal biomass is compatible with the integrated biorefinery vision of producing a
variety of fuels and valuable co-products.
Table 3. demonstrates different means of algal cultivation. Closed
Photobioreactors have the highest yield of annual production of lipids and are
more preferred than other means such as open ponds and hetertrophic cultivation. This is
partly due to the easier control of production, prevention of contamination by invasive
species such as bacteria or other algal strands and very little water loss due to
evaporation. Furthermore, photobioreactors can be in production during the cold seasons
just by controlling the temperature of water medium or the greenhouse. However,
building photobioreactors demands a higher capital for investment than the open pond

Kharazi 10
Table 3. Comparative features of microalgal cultivation approaches (Ferrel & SariskyReed, 2010)

Less loss of water than open ponds

Superior long-term culture maintenance
Higher surface to volume ratio can support higher volumetric cell

Evaporative cooling maintains temperature

Lower capital costs



Easier to maintain optimal conditions for production and

contamination prevention
Opportunity to utilize inexpensive lignocellulosic sugars for
Achieves high biomass concentrations




Moving on, table 4. demonstrates three companies currently working in the algae
biofuel industries. By investigating different companies, the companies mentioned in this
report show a great promise towards the commercialization of biofuel production without
receiving governmental subsidies and are competitive with crude oil prices currently in
the market.

Table 4. The table below demonstrates the most promising Algae biofuel companies in
the United States that are currently working towards price parity between biofuel and

Kharazi 11
crude oil (Algenol, 2015) (Solazyme, 2014) (Sapphire energy, 2015).
Algenol (Business, 2014)
1. The company exceeded harvesting 9000 gallons per acre per year.
2. They are producing algae based biodiesel, gasoline, jet fuel and biodiesel at a
cost of $1.30 dollars per gallon.
3. They have invested $200 million dollars into their technology.
4. Their company has a 100-acre facility by June of 2015 and is planning to
expand itself to 10,000 acres gradually.
2. Sapphire Energy (Sapphire energy, 2015)
1. A 300-acre integrated algal biorefinery.
2. Sapphire's focus is on "green crude," that has the same composition as crude
oil, and is therefore compatible with existing refineries. The company has
already shown that its fuel can be used in cars and even jets.
3. This company is producing is 1 million gallons of diesel and jet fuel per year
since 2011. They are planning to reach 100 million by 2018, and 1 billion
gallons per year by 2025.
4. Currently they are producing 5000 gallons per day and are focusing to build
their first commercial bio-refinery as of 2015
Solazyme (Solazyme, 2014)
1. Currently supplies 400,000 gallons of fuel to the U.S. Air Force and 190,000
gallons to the U.S. Navy
2. The company is aiming to reduce its cost of production to $60 to $80 per barrel
by 2015.
3. Solazyme has committed itself to increase its production to 100 million
Mt/year of jet fuel.

One of the other aspects of commercialization of biofuels is that it has to follow

the governmental standardization requirements in order to be commercially viable with
the current market demands. The biofuels produced by the microalgae meets these
requirements, which is set by the American Society for Testing and Materials (ASTM)
shown in table 5. (Hemaiswarya, Raja, Carvalho, Ravikumar, Zambare, & Barh, 2012).

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Table 5. Comparison of Biodiesel and ASTM (American Society for Testing and
Materials) (Hemaiswarya, Raja, Carvalho, Ravikumar, Zambare, & Barh, 2012)

Biodiesel from

ASTM biodiesel standard

Density (kg/L)



Viscosity (mm2/s, cSt at




Flash point (oC)


Minimum 100

Solidifying point (oC)


Cold filter plugging point



Summer maximum,
0, winter maximum <-15

Acid Value (mgKOH/g)


Maximum 0.5

Heating value (MJ/kg)


H/C ratio


One of the other benefits of cultivating microalgae is it does not produce revenues
only through the means of biofuel production, but it produces further income in different
industries (Ferrel & Sarisky-Reed, 2010) (Ghasemi, Rasoul-Amini, Naseri, MontazeriNajafabady, Mobasher, & Dabbagh, 2012). The extracted lipid contained in the
microalgae is 30%-70% by mass, which processed for biofuel production. However, the
remainder of 30-70% is composed of different organic bases such as protein, fiber and
minerals, which have applicability in the food industry, dyes and pharmaceutical
industries (Varfolomeev & Wasserman, 2010). These organic compounds can generate
further income and offer further commercial and environmental benefits.

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Figure 1. Potential use of Microalgae in various commercial fields. (Varfolomeev &
Wasserman, 2010)

Water Management, Conservation, and Recycling

One of the main advantages of using algae for biofuels production is their ability
to thrive in water unsuitable for land crops, such as wastewater from agricultural and
urban areas as well as aquifers and seawater (Ferrel & Sarisky-Reed, 2010).

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Conservation of water can be addressed to some extent through facility design and siting.

closed photobio

An advantage of
evaporation. However, the added cost of such systems must be balanced against the cost
savings and sustainability analysis for water usage for a given location (Ferrel & SariskyReed, 2010).

be recycled depe

Water recycling is essential, but the amount that can

algal strain, water, process and location (Ghasemi, Rasoul-Amini, Naseri, MontazeriNajafabady, Mobasher, & Dabbagh, 2012). Some actively growing algal cultures can
double their biomass on a daily basis, meaning that half

he culture
must be

processed daily, this is amount is equivalent to 260,000 gallons of water per hectare per
day (Ferrel & Sarisky-Reed, 2010). Figure 2. Shows the annual lipid production of
different algal species produced by using urban wastewater in an open pond system
(Ramachandra, Durga Madhab, Shilpi, & Joshi, 2013)(note: the rate of lipid production
can be much higher in photobioreactor system).

Figure 2. Annual lipid yield of the select algal species in urban wastewater
(Ramachandra, Durga Madhab, Shilpi, & Joshi, 2013)

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Algal Biofuel Conversion Technologies:

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Potentially viable fuels that can be produced from algae range from gaseous
compounds like hydrogen and methane, to alcohols and conventional liquid
hydrocarbons, to pyrolysis oil and coke. Attractive targets for this effort, however, are the
liquid transportation fuels of gasoline, diesel, and jet fuel (Ferrel & Sarisky-Reed, 2010)
(Ghasemi, Rasoul-Amini, Naseri, Montazeri-Najafabady, Mobasher, & Dabbagh, 2012).
Interestingly, one ton of CO2 absorbed from the atmosphere is capable of producing 144
gallons of biofuels (Algae Biomass Organization, 2015) (Algae Biomass Organization,
2015). These fuel classes were selected as the best-value targets because (Algae Biomass
Organization, 2015) (Ferrel & Sarisky-Reed, 2010):
1. They are the primary products that are currently created from imported crude oil
for the bulk of the transportation sector.
2. They have the potential to be more compatible than other biomass-based fuels
with the existing fuel-distribution infrastructure in the U.S.
3. Adequate specifications for these fuels already exist.

Figure 3. Schematic of the potential conversion routes for whole algae into

Kharazi 17
biofuels (Ferrel & Sarisky-Reed, 2010)

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Co-location of Algal Cultivation Facilities with CO -Emitting Industries
The Carbon Capture Opportunity in Algae Production:
Efficient algae production requires and benefits from enriched sources of CO2
since the rate of supply from the atmosphere is limited by diffusion rates through the
surface resistance of the water in the cultivation system (Ferrel & Sarisky-Reed, 2010)
(Ghasemi, Rasoul-Amini, Naseri, Montazeri-Najafabady, Mobasher, & Dabbagh, 2012).
Fuel gas, such as from fossil- fuel-fired power plants, would be a good source of CO2.
Algae production provides excellent opportunities for the utilization of fossil carbon
emissions and complement subsurface sequestration (Ferrel & Sarisky-Reed, 2010).
Algenol currently buys carbon dioxide from emitters at a price of $30 per ton to produce
a variety of biofuel at a cost of less than $1.30 (Algenol, 2015). However, algae
production does not actually sequester fossil carbon, but rather provides carbon capture
and reuse in the form of fuels and other products derived from the algae biomass (Ferrel
& Sarisky-Reed, 2010). Therefore, any greenhouse gas abatement credits would come
from the substitution of renewable fuels and other co-products that displace or reduce
fossil fuel consumption (Ferrel & Sarisky-Reed, 2010).
Major stationary CO2 emission sources that could potentially be used for algae
production are shown in table 6. The sources shown represent over half of the more than
6 billion metric tons of CO2 emitted annually in the United States (Ferrel & SariskyReed, 2010). Power generation alone (mainly using coal) represents over 40% of the
total, or more than 2 billion metric tons per year.

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Table 6. Major stationary CO2 sources in the United States (Ferrel & Sarisky-Reed,

Advantages of co-location of algae production with stationary industrial CO2 sources

(Ferrel & Sarisky-Reed, 2010):
1. Abundant quantities of concentrated CO2 available from stationary industrial
sources can supplement low concentration CO2 from the atmosphere.
2. Excess heat or power may be available to provide heating or cooling for improved
thermal management of algae cultivation systems this will allow developing
algal cultivation facilities under a broader range of geographic and climate
conditions on or near a year-round basis.
3. Excess wastewater or cooling water may be available, found often in proximity of

a primary resource challenge for algae cultivation at

scale, while providing beneficial re-use of cooling water and wastewater.

Kharazi 20
4. Potential carbon credit for utilities. This will require establishing a U.S. policy on
carbon absorption and re-use as transportation fuel in lieu of permanent

Figure 4. The dynamic coupling and interdependencies across the algal biofuels and coproducts supply chain (Ferrel & Sarisky-Reed, 2010)

Kharazi 21
Potential benefits of algae production with wastewater treatment:
Succinctly algae-based wastewater treatment has the following advantages (Ferrel &
Sarisky-Reed, 2010):
1. Early opportunity to develop large-scale algae production infrastructure.
2. Development of skilled algae production workforce.
3. Potential for nutrient recycling at algae biomass production facilities.
4. Wastewater treatment revenue that offsets algae production costs.
5. Lower capital and O&M costs than conventional wastewater treatment.
6. Lower energy intensity than conventional wastewater treatment (a greenhouse gas
7. Potential to be integrated with power plant or other CO2-emitting industry
8. Potential to treat agricultural drainage and eutrophic water bodies.

a. Integration with Water Treatment Facilities

In order to prevent the depletion of fresh water resources, it is inevitable that
wastewater treatment and recycling must be incorporated with algae biofuel production
(Ferrel & Sarisky-Reed, 2010) (Shaikh, Hossain, Lucky, Bassi, & Lasa, 2013). The main
connections of algae production and wastewater treatment are the following (Ferrel &
Sarisky-Reed, 2010):
1. Treatment technology is needed to recycle nutrients and water from algae biofuel
processing residuals for use in algae production.
2. The imported wastewater provides nutrients and water biofuel production. The

Kharazi 22
imported wastewater would be treated as part of the algae production.
3. Algae-based wastewater treatment provides a needed service.
4. Algae-based wastewater treatment can be deployed in the near-term and provides
workforce training and experience in large-scale algae cultivation that would
translate to future dedicated algae feedstock production facilities.

For large-scale algae biofuel production, nutrients from wastewater (municipal

and agricultural) would be captured by algae and then recycled from the oil extraction
residuals for additional rounds of algae production (Ramachandra, Durga Madhab, Shilpi,
& Joshi, 2013) (Ferrel & Sarisky-Reed, 2010). Inevitable nutrients losses during algae

and processing could


help supplement and off-set

the cost of com m

(Ferrel & Sarisky-Reed, 2010). Supply and cost of nutrients (nitrogen, phosphorus, and
potassium) be a key issue for achieving affordable and sustainable scale-up of algae
biofuels production (Ferrel & Sarisky-Reed, 2010)(Shaikh, Hossain, Lucky, Bassi, &
Lasa, 2013).

b. Wastewater Treatment and Recycling Applications:

Municipal wastewater treatment facilities and agricultural dairy and feedlot
operations located throughout the United States are particularly in the eastern half of the
country (Ferrel & Sarisky-Reed, 2010). This creates potential co-location sites for algae
operations where nutrient-rich wastewater could be used for algae production, and the
algae production can help provide nutrient removal service in the wastewater treatment
(Ferrel & Sarisky-Reed, 2010). Two main types of algae production facility are proposed:
dedicated facilities, with the main purpose of biomass production, and wastewater

Kharazi 23
treatment facilities, which produce algal biomass as a consequence of the wastewater
treatment. Dedicated biomass production facilities will also require wastewater treatment
and nutrient recycling (Ferrel & Sarisky-Reed, 2010). A subset of wastewater treatment
facilities consists of evaporation facilities, which are used to dispose of wastewater or
brines (Ferrel & Sarisky-Reed, 2010).
Algae can be useful in the treatment of waters polluted with organic matter,
excess nutrients (e.g., nitrogen, phosphorus, and potassium), metals, synthetic organic
compounds, and potentially endocrine disrupting compounds (Ferrel & Sarisky-Reed,
2010). High rates of algae production lead to high rates

of nutrient rem o

wastewater treatment. Thus, the objectives of biofuel feedstock production and

wastewater treatment are aligned, at least in terms of maximizing biomass production
(Ferrel & Sarisky-Reed, 2010).
Algae-based treatment facilities are typically less expensive to build and to
operate than conventional mechanical treatment facilities. For example, high-productivity
algae ponds have a total cost that is about 70% less than activated sludge, which is the
leading water treatment technology used in the United States (Ghasemi, Rasoul-Amini,
Naseri, Montazeri-Najafabady, Mobasher, & Dabbagh, 2012) (Hemaiswarya, Raja,
Carvalho, Ravikumar, Zambare, & Barh, 2012) (Hemaiswarya, Raja, Carvalho,
Ravikumar, Zambare, & Barh, 2012). This cost savings, coupled with the tremendous
need for expanded and improved wastewater treatment in the United States and
throughout the world, provides a practical opportunity to install algae production

in conj
ion w ith w ast
ew aterThe
treatm ent

major classes of wastewaters to be treated are municipal, organic industrial (e.g., food

Kharazi 24
processing), organic agricultural

(e.g., confined


w ith low organic

lakes, and rivers). Despite a seeming abundance of wastewater and waste nutrients,
recycling of nutrients and carbon at algae production facilities will be needed if algae are
to make a substantial contribution to national biofuel production.
c. Treatment of Organic Wastewaters for Algae Production
Organic-rich wastewaters usually also contain nutrients, requiring two types of
treatment. Algae are similar to
nutrients. These reactions are also the best-known mechanisms of wastewater treatment
by algae (Ferrel & Sarisky-Reed, 2010).
The ability of algae to assimilate dissolved nutrients down to trace concentrations is
useful in wastewater treatment, if the nutrient-rich algae are then also removed from the
water (Ferrel & Sarisky-Reed, 2010). Less well-known are the ability of algal systems to
provide natural disinfection and remove trace contaminants. Disinfection is promoted via
the production of oxygen radicals in the presence of sunlight, dissolved oxygen, and
naturally occurring organic catalysts (Ferrel & Sarisky-Reed, 2010). Heavy metals may
be removed by adsorption to algal cells, which will be a benefit as long as the resulting
metals concentrations in the algae biomass are not excessive or inhibitive for later use in
the processing of fuel and other co-products (Ferrel & Sarisky-Reed, 2010). Finally, the
interaction of algae and bacteria in wastewater cultures leads to degradation of a wide
variety of synthetic organic compounds such as phenol and acetonitrile (Ferrel & SariskyReed, 2010).

plants in that the

Kharazi 25
d. Treatment of Inorganic Wastewaters for Algae Production
In addition to the ability of algae systems to treat organic-rich wastewaters, their
ability to treat high- nutrient, low-organic content wastewaters will expand the
opportunities for algae production systems (Ferrel & Sarisky-Reed, 2010). Agricultural
drainage and eutrophic water bodies
waters (Ferrel & Sarisky-Reed, 2010). Treatment of nutrient-rich waters is likely to occur
in more rural settings than treatment of municipal wastewaters, potentially leading to
greater land availability and savings in land costs.
For algae-based treatment of low-organic content wastewaters, CO2 addition or
slow atmospheric absorption is essential since inorganic carbon generation from
decomposition of organic matter would not be significant. Treatment of agricultural
drainage with algal turf scrubbers without CO2-addition and high rate ponds with CO2
addition has been demonstrated in Californias Central Valley and elsewhere (Ferrel &
Sarisky-Reed, 2010).

(e.g., Salton Sea

Kharazi 26
The Benefits of Algal Biofuels Public-Private Partnerships framework:
Since production of microalgae biofuels involves too many stakeholders from
both the public and private sectors, public-private partnership (PPP) is the most ideal way
to approach especially in such ambitious projects. One of the main reasons this form of
partnership is ideal is due to the difficulty of executing such a project, both in political
and financial terms (Edwin & Forrer, 2012). Therefore, this paper recommends the
DDOE to consider establish a partnership framework that addresses the political and
financial challenges of commercializing microalgae biofuel production while at the same
time to minimize the public investment risks directly and indirectly.
Since the 1980s, the U.S. has increasingly invoked public-private partnerships not
only for large-scale infrastructure projects, but also for research and technology
developments of national interest (Ferrel & Sarisky-Reed, 2010). Indeed, analyses of
various federal agencies and government programs aimed at public-private partnerships
are documented, including specific studies on the impacts
clean energy sector (Ferrel & Sarisky-Reed, 2010). The other significant advantage of
PPP is it offers city officials such as the respectable- DDOE members the flexibility and
efficiency in the use of resources, brought to bear skills not available in the public sector,
and provided private financing, thereby allowing governments to limit their financial
exposure (Edwin & Forrer, 2012).
Public officials and private developers who pursue these types of joint ventures
typically have development ambitions that they could not complete alone (Edwin &
Forrer, 2012). Mutually beneficial goals motivate pooling resources and risk sharing, and
thus shape the practical details of projects (Edwin & Forrer, 2012). True public/private

of D O E program

Kharazi 27
ventures result in products that are jointly owned or to provide the platform for the public
and private cooperation in order to achieve mutually beneficial agendas that generally
share four attributes (Edwin & Forrer, 2012):
1. Partners are cooperative rather than adversarial because their interest aligns.
2. Formal contracts set the terms under which they share risk and responsibility for
mutual financial gain and social benefit.
3. Custom-tailored business arrangements often persist after the project is completed
and operating.
4. A PPP should be profitable for the entity to survive.

The algal biofuels industry is evolving with numerous stakeholders; many

he algal
& bi
Sariskyofuels value chain

focusing on one to a few elements in

on sharing of kn

Reed, 2010). Partnerships based

benefit could pull together the current expertise and facilities, thereby facilitating growth
and development

a sust
e, algal biofuels industry

2010). Figure 5. illustrates the potential benefits of collaboration between private entities
(e.g., industry) and public entities (e.g., national laboratories and universities) for
development of algal biofuels (Ferrel & Sarisky-Reed, 2010).While benefiting both
private and public entities from shared investment toward mutual objectives, publicprivate partnerships have the potential to accelerate commercialization of algal biofuel
technology, leading to rapid industry growth and a stable market.
Industry benefits from public-private partnerships from the exposure to
fundamental science and engineering R&D, which can support a quickening pace of

Kharazi 28
innovation (Ferrel & Sarisky-Reed, 2010). This could, in turn, increase the capital
efficiency of commercial firms, many of which may be investor-backed and pre-revenue,
as well as reduces the risk of private investment (Ferrel & Sarisky-Reed, 2010). By
focusing these partnerships on pre-competitive research or critical problems shared by all
players (e.g., technology scale-up and demonstration, regulatory issues, labor), industry
would retain its competitive edge, while increasing the opportunity to develop and license
technology with new partners (Ferrel & Sarisky-Reed, 2010).
Figure 5. Benefits of algal biofuels public-private partnerships (Ferrel & Sarisky-Reed,

Moving on, in order to establish a successful framework concessionary

arrangement between public entities and private developers (such as tax benefits, federal
loans, etc.) must be considered (Edwin & Forrer, 2012). Furthermore, clear, timely, and
transparent mapping of all costs, revenues and profitability aspects of PPP project is
another requirement for successful implementation of such framework (Edwin & Forrer,
2012). Finally while establishing the framework for commercializing microalgae biofuel
production, it is necessary for good performance to explicitly identify the procedures for

Kharazi 29
selecting different stakeholders and their roles along with any environmental costs
associated with the projects, and the risks likely to affect overall performance of a project
must be considered (Edwin & Forrer, 2012).
Another vital aspect of establishing a framework, is maintaining the ethos in the
structure, processes and leadership between all stakeholders in a PPP. The following are
some critical elements necessary for the appropriate ethical use of private-public
partnership projects (Sagalyn, 2007):
1. PPP and organizations that contract-out critical public functions must led by
individuals who are public stewards and who encourage stewardship
throughout the organization. Such stewardship entails a commitment to the public
interest and protection or conservation of ethical values.
2. Public organizations need to involve all interested parties in their decision-making
processes. The more complex the problem and the greater the number of actors
(public, private and nonprofit) the more important that public leaders engage and
give voice to the citizenry. Government leaders must use old and new social
media to ensure two-way information flows.
3. A clear accountability structure is essential. Such an accountability system can be
built around the areas of risk, costs and benefits, sharing of expertise, analysis of
political and social costs, clear expectations as to partnership collaboration, and
the development and use of effective performance measures. It is the public
sectors responsibility to develop this accountability structure.
4. Maintaining a system perspective by using technical decision tools but also
keeping a focus on the larger picture and organization interaction. The use of

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PPPs should not be thought of as a single solution to one need, but rather in a
framework that examines the roles of the public, private and nonprofit sectors in a
broader web of action to address complex problems. Thus, government agencies
must become a learning organization, so that experiences with PPPs can frame
future negotiations and agreements.

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This project, briefly described different aspects of commercializing algal biofuel
production from its technical to public-private partnership aspects to the DDOE. Sicne
such a framework has not come to fruition, establishing such a framework can be model
to be utilized and adopted by other States and cities. The purpose of this framework is to
accelerate the momentum of commercialization of third generation algae biofuel energy
since this technology has reached its technological maturity and is ready to enter the
phase of commercialization. And secondly to ensure the supply of sustainable biofuel
resources for Washington D.C. locally by using wastewater in order to reduce
dependence on foreign oil markets.
Furthermore, DDOE has set up plans and visions to become the leader in
environmental sustainability by increasing energy efficiency, waste management and
recycling, mitigating GHG emissions and improving water quality in terms of
rehabilitating the ecosystem and the water quality especially in the Anacostia River and
Chesapeake bay. These goals and targets will become more achievable as using
wastewater from urban or agricultural sources can produce algal biofuel.
Therefore, the cultivation of algae biofuels and other co-products can be a
solution to tackle wastewater treatment, mitigating greenhouse gas emissions as well as
ensuring energy security. The cultivation of algae can benefit other schemes developed
by the DDOE, such as Energysmart DC in terms of producing sustainable sources of
methane gas and different forms of biofuels and the Riversmart programs in terms of
dealing with wastewater treatment.

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Establishing a framework entails incorporating many different organizations and
professional entities that provides the necessary expertise in order to establish a mutually
beneficial framework between the public and private sectors. As aforementioned, the
purpose of PPP is mainly to reduce public debt while constructing projects at no cost to
the public. In this project, the main governmental organizations are the DDOE, the DOE
and District of Columbia Water and Sewer Authority (to start with) with each having
their own set goals and agendas, chiefly being reducing runoff, mitigating air and water
pollution and providing sustainable energy sources.
The three main stakeholders by category are:


The algae biotech firms who poses the technology for biofuel production

Private investors to fund such projects

This paper recommends the DDOE to define their own goals and agendas and
establish a framework that serves their own interest while at the same time gives the

algae companies the opportunity to reach maturity and enter the

commercialization phase with the investment of the private sector. This framework
should consider the interest of the private sector too, mostly by guaranteeing security of
investment and income, and return on investment. One way to achieve these goals is to
offer projects to the Algae Biofuel Company that ensures the best return on investment as
well as best practice in terms of minimizing air and water pollution that indirectly helps
to rehabilitate the ecosystem of Chesapeake Bay and Anacostia River.

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This is a very general proposal that will take a long time to become
implementable, as it requires the collaboration of many different entities to draft such a
framework. However, since algae biofuel technology is considered to be the third
generation of biofuels, considering establishing such a framework is vital. It is very
important to promote algae biofuel production based on commercial feasibility and
competitiveness rather than injecting subsidies to produce algae biofuels.

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