In the past few months, the Oilgae team members have been asked by at least a dozen companies what we thought of having algal biomass as a substitute for coal in future.<\/p>\n
Fat chance if you are looking to microalgae.<\/strong><\/p>\n I will focus this article on microalgae and prove without much ado why it stands almost no economic chance of being a substitute for coal.<\/p>\n Coal is not one single commodity – there are many grades of coal (here is a detailed page giving you list of coal grades as seen by the industry – http:\/\/coal.nic.in\/point4.html ). Whatever be the grade, you are looking at a minimum price of about $80 per T. For higher quality grades of coal, the cost per tonne is over $100. The highest grade of coal will possibly cost about $150 per T.<\/p>\n Now, this is what you are trying to achieve with microalgae – a price of $150.<\/p>\n Now, such a price disparity alone might not mean it is impossible to bridge. You could argue that the price gap might vanish if the price of coal goes up and the cost of making microalgae biomass comes down, or in the best case scenario, both events occurring.<\/p>\n The price of coal increased from around $30.00 per short ton in 2000 to around $150.00 per short ton as of September 2008 (Source \u2013 Wikipedia), though it declined to about $110 soon after. Even at<\/p>\n Fat chance, wouldn’t you agree?<\/p>\n At Oilgae, we had been modelling a low-cost<\/a> model for algae to process. We did significant empirical research while building this model and thus have with us what we feel is a very-low-cost, feasible algae to fuel process. Even under this scenario, it costs about $400 per dry ton of algal biomass.<\/p>\n $400 vs $150 – it’s a no brainer that it not going to fly. And remember, many of the industries using coal use humungous quantities. I remember having a discussion with the head of alternative fuels research last month at ACC, India’s largest cement company (they make about 25 million T of cement a year). ACC uses about half a million T of coal A MONTH. That’s about 6 million T a year. A price difference of $ 250 per T will mean a total cost difference of $1.5 billion. Even if they are looking at replacing just 5% of coal with algal biomass, that alone would be a cost increase of about $100 million.<\/p>\n Wouldn’t you agree with me now that there’s a fat chance?<\/p>\n Adapted from the Oilgae Newsletter<\/p>\n Some interesting links<\/em><\/p>\n