Algae Production in Wastewater Treatment: Prospects for Ballen

Michael Cunningham Calvin Heim Verena Rauchenwald

LoCal-RE Summer Research Program August 26, 2010

Abstract This report investigates the technical and economic viability for algae production at the Ballen Wastewater treatent plant (WWTP) on Samso Island, Jutland, DK. In the proposed system wastewater is utilized as a feed stock and u gas from a biomass plant provides carbon dioxide. A published economic model predicts an annual average biomass selling price from oil prices, lipid content, and predicted annual algae yield. This group constructed a model that predicts an internal rate of return (IRR)of 10.47% based on an approximation of the theoretical biomass yield (15.3 grams algae (dry weight) per square meter per day over the summer season) and costs from similar algae production systems. The baseline predictions assume that oil and electricity are at current market price, and the open market price of CO2 is $7 per ton. This study concluded that economic viability of the project depends greatly on the CO2 and oil market prices. If the market price of carbon dioxide increases to $19-20 per ton, the sequestration of carbon dioxide is the highest source of prot. In addition, algae production process helps meet EU directive water discharge regulations by decreasing the concentrations of Total Nitrogen (TN) and Total Phosphorous (TP). Policy issues, regulations, and social implications of this project for the people of Samso are discussed.

Contents
1 Introduction 1.1 Incentives for biomass production . . 1.2 Objectives . . . . . . . . . . . . . . . 1.3 WWTP operational regulations . . . 1.4 Physical constraints to algae growth 1.4.1 Light . . . . . . . . . . . . . . 1.4.2 Temperature . . . . . . . . . 1.4.3 Nutrients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2 3 4 5 5 6 7 8 8 10 11 11 11 11 12 12 12 12 12 12 13 14 15 15 16 17 17 18 19 20 20 20 21 21 21 22 22 22 23 23

2 Methodology 2.1 Plant setup . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Determination of revenue . . . . . . . . . . . . . . . . . 2.3 Production Cost assumptions . . . . . . . . . . . . . . . 2.3.1 Cash Flow assumptions . . . . . . . . . . . . . . 2.3.2 Electricity Demand in Power Plant . . . . . . . . 2.3.3 Reduction in Electricity Demand Approximation 2.3.4 Land . . . . . . . . . . . . . . . . . . . . . . . . . 2.3.5 Carbon Dioxide . . . . . . . . . . . . . . . . . . . 2.3.6 Price of Carbon Dioxide . . . . . . . . . . . . . . 3 Results 3.1 Biomass Yields . . . . . . . . . . . . . . . . . . . . . . 3.2 Centrifuge . . . . . . . . . . . . . . . . . . . . . . . . . 3.2.1 Centrifuge Models . . . . . . . . . . . . . . . . 3.2.2 Determining Maximum for Centrifuge System . 3.3 Oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Carbon Dioxide . . . . . . . . . . . . . . . . . . . . . . 3.5 Algae Lipid Content . . . . . . . . . . . . . . . . . . . 3.6 Expected Water Quality Improvements . . . . . . . . . 3.6.1 Biological Oxygen Demand . . . . . . . . . . . 3.6.2 Chemical Oxygen Demand . . . . . . . . . . . 3.6.3 Total Nitrogen . . . . . . . . . . . . . . . . . . 3.6.4 Total Phosphorous . . . . . . . . . . . . . . . . 3.6.5 Total Suspended Solids and Volatile Suspended 3.6.6 Predicted Results . . . . . . . . . . . . . . . . . 3.6.7 Other Areas of Reduction . . . . . . . . . . . . 4 Discussion 4.1 Economic Harvesting System 4.2 Photobioreactors . . . . . . . 4.3 Carbon Dioxide . . . . . . . . 4.3.1 Technical . . . . . . . 4.3.2 Economic . . . . . . . 4.4 Oil Prices and Ination Rate

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Water Quality . . . . . . . . . . . . . . . . . . . . Regulations . . . . . . . . . . . . . . . . . . . . . Accuracy of Predictions and Assumptions . . . . Society and Policy . . . . . . . . . . . . . . . . . 4.8.1 Policy Challenge: Local Support . . . . . 4.8.2 Social Challenge: Raising Capital . . . . . 4.8.3 Setting New Goals for the Biores Project

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5 Conclusion A Biomass yields B Cash Flow and Inputs

1
1.1

Introduction
Incentives for biomass production

The utilization of biomass as a renewable energy source for transportation and electricity production has increased over the past decade because of the interest in energy security, and GHG mitigation. A focus on Climate Change in Europe led to the 20-20-20 targets. These targets require countries to decrease GHG emissions, increase electricity generation, and decrease consumption by 20%. All EU-15 countries intend to include biomass in their portfolios to meet these targets by the year 2020. However the use of biomass could increase GHG emissions depending on combustion eciency, planting and harvesting practices, and other footprints of the biomass life cycle. Traditional biomass sources include rst generation crops such as corn, canola, and switchgrass. Recent studies show that algae is more favorable than these crops in terms of land and water consumption and eutrophication potential. Current algae production methods emit carbon dioxide while the growing of corn, switchgrass, and canola for fuel purposes sequesters carbon dioxide. Fertilizer and carbon dioxide produced specically for traditional algae production lead to the majority of GHG and energy consumption. Forty percent of energy demand and 30% of GHG emissions can be attributed to process-specicmanufactured CO2. Fertilizer accounts for approximately 50% of energy use and GHG emissions [12]. The handling of bioenergy requests a responsible and sustainable way of production. Biomass is considered as CO2 -neutral and thus very ecient in reducing emissions, but if forests are exploited the exact opposite would take place. Deforestation is one of the major issues for global warming. Furthermore the competition for land between energy crops and food crops has to be avoided. It has to be ensured that fertile land is available for the worlds expanding population. Instead of using arable land for biofuel production this project focuses on using wastewater as a resource. nutrient for a new product, the algae. However, our project declares wastewater as a resource for future products. 2

Figure 1: The dike ponds in Lolland integrate wastewater treatment, ood prevention, and potential for algae production. Instead of growing and incinerating food crops we take the algae and put it into the wastewater pond. Therefore water and land is saved, fertilizers are not needed because the wastewater pond is an enormous area of nutrients and chemicals for further treatment of the wastewater are minimized [28].

1.2

Objectives

The utilization of wastewater as a feedstock and u gas as a CO2 source eliminates the requirement the fertilizer and process-specic-manufactured CO2 from the algae production process. The results should be a major reduction in lifecycle energy requirement and GHG emissions. The goal of this project is to analyze the social, economic and technical benets of algae production utilizing wastewater as a feedstock and u gas as a CO2 source. Our technical and economic objectives are to approximate the annual growth rate of algae, to determine the rate of return on investment in a wastewater-based algae production process on Sams, and to identify the most sensitive input variables to this rate of return; our social objectives are to examine regulatory and social incentives to implement this algae process.

1.3

WWTP operational regulations

A wastewater treatment plant has to follow certain regulations to be established. In the case of Sams the Council Directive of 21 May 1991 concerning urban waste water treatment constitutes the framework for the procession of domestic and industrial wastewater as well as run-o rain water. Its main focus is to protect the waters in the EU member states through appropriate collection, treatment and discharge of urban waste water. Moreover it is one of the three directives of the European Union on water policy. Based on the Council Directive EU member states have enacted national laws. Sams is an island with a capacity population equivalent (p.e.) of 6.700; it runs an MBNDK process, which means that the plant performs mechanical, biological, nitrication, and denitrication processes on the wastewater; nally, the water passes through a clarifying tank before disposal [8]. The biological process is an activated sludge process, and the sludge is treated in an approximately 40m by 75m reed-bed system, where the sludge degrades for ten years before agricultural application as a fertilizer, use as construction material, or transport to a landll[30]. Article 10 of the Directive points out local climate conditions and loads seasonal variations shall be considered when designing, constructing, operating and maintaining a WWTP. This article is of importance because the main factors for the algae production on Sams are sunlight and temperature. These factors are very sensitive; thus algae production in open ponds is only feasible from April to October. The seasonal variations of load are of importance as in the summer Sams is hosting a festival with many visitors. Therefore the WWTPs p.e capacity is 6.700 although the p.e load during the year is only 1.409 [6]. Flexibility in capacity is needed to handle the load of visitors. Annex I of the Directive elaborates precisely the requirements for urban WWTP concerning the collecting systems, the discharge from urban WWTPs to receiving waters, and reference methods for monitoring and evaluation of results. Collecting systems have to be designed with the best technical knowledge by having the characteristics and volume on urban waste water on the mind. Moreover leaks shall be prevented and storm and over ood-based pollution of receiving waters shall be limited. The design of the WWTP has to guarantee representative samples to be taken of incoming and euent water before being transferred to receiving waters. Moreover the eect on the receiving waters shall be limited by elaborating the best point of discharging the water. Further it is required in Annex I, D, 2 reference methods for monitoring and evaluation of results to decrease degradation of samples between collection and analysis by applying international laboratory practices. Moreover it prescribes how many samples shall be obtained due to the size of the treatment plant. 4

Samss WWTP at Ballen has a population equivalent capacity of 6.700 thus four samples are required after the rst year has shown that the water is coherent with the requirements of the Directive. If the p.e. is over 50.000 then 24 samples have to be obtained. In addition Annex I provides a table with percentage of reduction and concentration values of discharged waters. The required BOD (biochemical oxygen demand) in the WWTP has a concentration of not more than 25 mg/l O2 . Another parameter described in the table is COD (Chemical oxygen demand). The concentration limit of COD lies at 125 mg/l O2 , while requiring a reduction of 75% from incoming water. TSS (Total suspended solid) demonstrates the third parameter concerning the approval of discharged water. The Directive sets the limit for TSS concentration at 35 mg/l if a p.e. of 10.000 is existing. In this case the minimum percentage of reduction is dened by 90%. Incoming water with 2000-10.000 p.e. is allowed to reveal a concentration of 60 mg/l TSS. Under these circumstances 70% of TSS have to be reduced at minimum [5].

1.4
1.4.1

Physical constraints to algae growth

Light

Photosynthetically active radiation (PAR), radiation that falls between the wavelengths of 400 and 700 nm (roughly 43%-45% of the total incoming radiation)[27, p. 377], supplies the energy for photosynthetic conversion of carbon dioxide to carbohydrates. In his review, Shen [33, p. 1282] shows that the maximum theoretical conversion of PAR to carbohydrate is 27%.To completely determine the amount of available light, one would have to consider the geometry of the algal growth area: for ponds, the amount of sunlight available to algae is limited by the available solar ux, which rises and falls with the seasons. Table 1 lists some average solar uxes for Sams by month. As the light passes through the surface of the algae tank, microalgae absorb or scatter the light. The light continues to dim and scatter as the optical path length (e.g., the depth of the pond) increases. Furthermore, as the density of algae increases, the eects of shading come into play and decrease the amount of PAR [23, p. 24]; it has been suggested that the combined eects of photon absorption limitations, optical transfer losses, and use of energy for life-support functions of the algae decrease maximum conversion eciency of PAR in photosynthesis to 10%, and it has been suggested tha the PAR conversion eciency is 3.7% for open ponds[33, p. 1282]. Too much lighting can cause photoinhibition [23, p.24], which is more relevant for the entire algal population at low algae concentrations ( less than 10 g/L). This eect of photoinhibition (for algae) generally begins at about 10% of the full solar ux at midday [13, p.8], but varies from species to species. g ), A rough approximation for the biomass yield of an algae farm, BY ( m2 month may be given by BY = QT ( adopted from [33, p. 12, Equation 2]) Ec (1 L) + El L 5

Table 1: Radiation and temperature data for Sams, from [7] where Q is the month-average PAR energy per day (kW h/m2 day ), T is time (number of days in the month) , is the theoretical nal PAR conversion eciency (10%), Ec is the energy necessary for building one gram of carbohydrate (17KJ g 1 ), El is the energy necessary for synthesizing one gram of lipid lipids (38KJ g 1 ), and L is the lipid content ( g g algae ) of the algae by dry weight. Note that the 3.7% mark for open ponds was not used. We factor in the eect of environmental temperature changes to account for lower yields. 1.4.2 Temperature

The maximum rate of primary production may also be approximated by the Arrhenius expression in regards to temperature. = Ae
Ea 1 R T

where rst order growth rate, day1 Ea approximate activation energy for photosynthesis, R universal gas constant, kJ mol K T temperature, K kJ mol

A = maximum growth rate, day1

This approximation requires empirical data for a range of temperatures to approximate the constants A and Ea ; in [18, p. 761], a collection of data for freshwater and marine algae suggest that this relation takes the form of = Ae6842 T
1

Assuming that we remove algae from an open pond at a very slow rate (so that the concentration of algae in the entire pond remains relatively constant), we can view the growth (for the purposes of this model) as a zero-order expression, a function of temperature. Then, the fraction of the full biomass yield rate available at lower temperatures than the standard (let us assume 25 C ), f (T ) is 6842 e T (T ) = f (T ) = 6842 (25 C ) e 298K This model makes three major assumptions: Optimal growth occurs near 25 C . Photosynthesis can be modeled as one master reaction with activation energy Ea . The slow harvesting method does not signicantly alter the overall concentration of algae. As temperatures drop close to the freezing point, algal primary productivity decreases to an unprotable amount; modeling for cold climates such as those in Sams(Table 1) must take in to account that slow-owing, shallow open ponds will freeze in the winter months. However, experimental data reveals relations between temperature, light intensity, activation energy, and the half-saturation constant and implies the need for a more involved expression for the growth rate. Eilers and Peeters (1993) responded with a more extensive model for primary productivity based on states of the photosynthetic factories, assuming that temperature only aects the peak primary productivity and optimal light intensity[15]. Duarte (1995) goes from their model to consider the correlations between temperature over the entire light intensity and temperature range (specically, the initial slope of the P- I curve) by constructing a model based on 5 reaction rates of photosynthesis and tting a temperature-intensity-productivity surface to experimental data using a least-squares method [14]. We applaud their eorts, but choose the simpler Arrhenius model for this paper. 1.4.3 Nutrients

CO2 Microalgae, like other plants, need carbon dioxide for photosynthesis. It may come from the atmosphere, industrial exhaust gases, or from dissolved carbonate and bicarbonate ions in ambient waters. High microalgal growth rates require more carbon dioxide than atmospheric CO2 (at 0.0387% CO2 , by volume) can oer; ue gases from power plants (at 15% 7

Figure 2: Schematic of the integrated system: power plant, wastewater plant, and biorenery.

Sunlight

O
Lost CO2

Ballen Power Plant

algae / 5 ' Pond Algae k k k k kkk Puried Water kkk k k Pretreated water kk kkk W W T Flue gas

/ Biorenery &

CO2 , by volume) provide a viable alternative for the algae and carbon mitigation for the power plants [27, p.373]. N Algae use nitrogen to build nucleic acids and proteins. Unlike carbon dioxide, atmospheric nitrogen N2 is not readily available for use by the algae; nitrate (NO3 ) and ammonium (NH+ 4 ) are the more readily available. By depriving microalgae of nitrogen, lipid production signicantly increases at the cost of a lower overall growth rate [27, p.373]. P Phosphorous plays several roles in microalgae as a constituent of phospholipids (for cell membranes) and adenosine triphosphate (to carry energy for cell functions), among other functions. The phosphate ion, PO4 3 , is perhaps the most bioavailable form of phosphorous, as phosphorous bound to metal ions are not as easily accessed [27, p.373].

Methodology

To evaluate the economic feasibility of adding an algae process to the existing wastewater treatment plant (WWTP) at Ballen, we conduct a sensitivity analysis to determine the internal rate of return and net present value for this process in various scenarios. We also consider the legal and social ramications of adding an algae process at Ballen.

2.1

Plant setup

Our algae production system (Figure 2) modies the Ballen wastewater treatment plant to include a seasonal biological treatment via raceway ponds and to receive ue gas from the biomass power plant in Ballen. We choose to grow the algae in a raceway pond, which we hope the low initial costs relative to photobioreactors and enclosed systems (gure 3). 8

Figure 3: Raceway pond, from [33] The area of the production facility is 10839 m2 . This is approximately 1.08 hectares. The volume of the production pond is 2709 m3 , and the depth of the pond is 25 cm. Paddle wheels mix the pond for optimal light exposure and gas exchange; the pond has a retention time of 6 days for adequate nitrogen and phosphorous removal. The cost for a paddle wheel is predicted to be about $5,000 per hectare of algae production, based on a survey of dierent existing algae production systems [27]. The aeration system utilizes disk aerators to diuse air into the ponds. The carbon dioxide aeration equipment costs vary greatly, but we assume the cost of $10,000 per hectare of algae pond given by current literature [27]. The harvesting system, which harvests algae at a rate equal to their biomass yield rate, combines occulation with subsequent centrifuging. The occulation process makes the negatively charged microalgae lose their charge and cluster together [10]. We perform minimal centrifugation afterwards to increase the solid contents in the nal product. The estimated cost for this process is $10-$20 per ton [27]. A sensitivity analysis on the dierent costs associated with a pure centrifuging system are analyzed in section 3.2. The wastewater treatment plant provides the algae ponds with partially treated wastewater. The algae extract nutrients from the wastewater (see section 1.4.3); we assume that the wastewater provides a bounty of nutrients, does

not chemically inhibit the growth of microalgae with heavy metals or synthetic contaminants, and does not introduce predatory species that might reduce our biomass yields. The biomass power plant in Samso provides the algae production plant with ue gas via an underground pipeline to mitigate CO2 emissions and sponsor microalgae growth; we assume that gases besides CO2 (such as NOx) do not hinder microalgae growth. After harvest, the WWTP sells the algae to the planned biorenery on Samso. We also assume that our plant operates in the months from April to October following the example of the ALPHA model [20, p.159] to avoid freezing of the ponds.

2.2

Determination of revenue

We determine an acceptable algae sales price (Z, in dollars per metric ton) by assuming an equal market value for crude oil, biogas, and biodiesel (from [33, p. 9]): X [q (1 w) Ebiogas + ywEbiodiesel ] Z= Epetroleum where X price per barrel of crude petroleum Epetroleum $ bbl MJ energy per barrel of petroleum, bbl 400m3 Mg

q biogas volume produced by anaerobic digestion of residual biomass, w lipid content of biomass in percentage dry weight, Ebiogas average energy content of biogas, 23.4

M g lipid dry matter M g Algal dry matter

MJ [11, p. 127] m3 M g biodiesel y yield of biodiesel from algal oil, 80% by dry weight M g lipids Ebiodiesel average energy content of biodiesel, 37800 MJ M g biodiesel

With the temperature and radiation data from Table 1, we can approximate the total theoretical biomass yield from available PAR (as discussed in section 1.4.1) and the appropriate temperature correction factor (as discussed in section 1.4.2). We approximate the amount of biomass generated by multiplying the two results together, by month. Before the sensitivity analysis, we assume that the lipid content is %20 by dry weight. The results are shown in section 3.1

10

2.3
2.3.1

Production Cost assumptions

Cash Flow assumptions

General Ination Rate provided by Danmarks Nationalbank: 2.3% [1] Interest Rate on 10-year business Loan provided by Danmarks Nationalbank: 4% [1] MARR is standard for a SP 500 company at 12% [31] Corporate Tax Rate: 30% [3] Annual Matienance Costs: 10% of intial cost of equipment Replacement of damaged parts: 5% of intial cost of equipment Working Capital: 4% of intial cost of equipment Oil Ination Rate: 1.5% higher than general ination rate Electrical Ination Rate: same as general ination rate Carbon Dioxide Ination Rate: 1% higher than general ination rate Electricity Price: $0.16 per kWh Industrial Electricity Price for Denmark [2] 2.3.2 Electricity Demand in Power Plant

The electricity demand in the power plant is based on data about small power plants from a survery of United States plants [19]. The study predicts a power consumption of 0.591 kWh per cubic meter of water treated. 2.3.3 Reduction in Electricity Demand Approximation

The improvement in water quality, explained in section 3.6, will decrease the costs related to biological treatment. Biological treatment consumes up to 40% of electricity in a standard sludge activated wastewater treatment plant [12]. Our model assumes that the improvements in water quality will reduce the electiricty demand of the biological treatment process by thirty percent. This is a rough assumption because the electrical savings will dier from process to process. Savings could also come from designing the systems to treat cleaner water from the algae production system. Further study is necessary to quantify the actual savings from water quality improvements over the eight month period of algae growth.

11

2.3.4

Land

The cost for land, according to Professor Morton Blarke, in Denmark is approximatley 150,000 kr. per hectare. Our model assumes that the algae production process will utilize the land at the Ballen Wastewater Treatment Plant. We will not take into account any additional land needed to implement the algae production system in our economic model. 2.3.5 Carbon Dioxide

Our model assumes that the Ballen Wastewater treatment plant will be paid to utilize carbon dioxide from the biomass plant on Sams. This assumes that the cost for collecting and storing the carbon dioxide is not included in the economic analysis. The equipment necessary to deliver the carbon dioxide into the system is purchased as part of the intial investments. Details about the carbon dioxide delivery system are outlined in section 2.1. 2.3.6 Price of Carbon Dioxide

There will be a sensitivity analysis on the price of CO2 in section 3.4. The price of carbon dioxide in the initial model is assumed to be $7 per ton. This is the residential household tax per ton of carbon dioxide in Denmark [29].

Results

Initial model results yield a net present value (NPV) of $6,389. The internal rate of return (IRR) based on cash ows before taxes for investors is 10.47%. This indicates that investment into the algae system is favorable. Information on the inputs of the model, as well as annual cash ows, can be found in Appendix ??.

3.1

Biomass Yields

Figure 4 shows the estimated monthly biomass yield rates. The yearly average is 9.5 grams per square meter per day, whereas the seasonal average (from April to October, inclusive) is 15.3 grams per square meter per day. This sums up to a yearly production of

3.2

Centrifuge

The cost of harvesting equipment is the rst variable that will be analyzed. The current system set up is detailed in section 2.1. Four alternatives are presented in this section regarding the price of centrifuging. The second section of this analysis will determine the maximum price per ton of algae that this system can pay for a centrifuge and still make a prot.

12

Figure 4: Monthly biomass yields. Note the reducing eect of temperature on the biomass yield rate, especially in the winter months.
45

40

35

Biomass Yield (g/m^2*d)

30

25

Allowable by given sunlight and ground temperatures By available sunlight (PAR)

20

15

10

0
ne ril r r be D ec em ch ly Fe br ua ry ar y ay us be er Ap Ju Ju Au g ob ar M ov em em nu be r t

Ja

Se pt

ct

Month

3.2.1

Centrifuge Models

The rst alternative is the utilization of the centrifuge system outlined in [16]. The system used to collect high-value algae for the production of 96% pure EPA. EPA is one of the oils in omega-3, so the chemical composition of algae must not be modied greatly during production or harvesting [21]. The costs of installing the harvesting and centerfuge system at this plant costs $9461.75 per ton of algae [16]. The second alternative involves installing the Westfalia DA200 Clarier Centrifuge with Nozzle Discharge. The quoted price of a used model from Perry Process Equipment Ltd. is $215,648.10 (171,000 euros). This piece of equipment is one of the top products on the market. The third and fourth alternatives use the approximations from [27] for the cost of a collection system that relies on just centrifuging to collect algae. The range of costs for this system is between $1500-$1000 per ton of algae production. Table 2 shows the NPV from all of the alternatives. Since all alternatives resulted in negative NPV, the IRR does not exist. The results from Table 2 indicate that a collection system that uses just centrifuging will result in a loss for investors. The Westfalia DA200 Centrifuge without electricity costs alternative shows collecting the algae and then only

13

Table 2: Centrifuge systems and Net Present Value NPV System High value EPA oil recovery $-406833 $-222,556 Westfalia DA200 Centrifuge Westfalia DA200 Centrifuge without electricity Costs $-212,269 $-43,228 $1500 per ton Algae System $1000 per ton Algae Harvesting $-20,463 centrifuging when the electricity is cheapest did not oset the high initial costs of purchasing the centrifuge system. 3.2.2 Determining Maximum for Centrifuge System

This section will determine the maximum price per ton that investors can pay for a centrifuge-only system. Figure 5 belows shows the relationship between the IRR and the cost of centrifuge systems. Figure 5: Internal rate of return for various centrifuging costs.

The maximum initial investment into a centrifuge system for investors is $27,720. The cost per ton of algae for centrifuging at that total price is $645.

14

3.3

Oil

The predicted price of algae for biodiesel for this model is based on three variables, algae yield, price of oil per barrel, and lipid content. This section will illustrate the changes in IRR and NPV of the system if oil prices change over time. It is dicult to predict the ination rate of oil. Figure 6 shows the average spot market price of oil per year over a twenty-four year period. Figure 6: Spot oil prices.[4]

The model predicts that oil prices per barrel will increase at a rate higher than ination. In Figure 7 the 0% value assumes that oil prices will increase only at the general ination rate (2.3%) of Denmark. Figure 8 compares the internal rate of return with the price of oil.

3.4

Carbon Dioxide

One major assumption for the model is that the government credit for carbon dioxide is $7 per ton sequestered. Another assumption is that the price of carbon dioxide will increase at a rate 1% higher than ination. Table 3 displays the NPV and IRR of the algae production system at dierent credits given by the government per ton of sequestered carbon dioxide. The values in column 1 of Table 3: Value of Carbon Internal Rate of Return Credit ($ per ton CO2) 7 0 18 5.07 (4 euros) 38.04 (30 euros) Credits and the Resulting Net Present Value and NPV $16,190 $-4,656 $49,434 $10,929 $109,114 IRR 18.34% 39.83% 14.27% 72.77%

Table 3 were selected carefully to corellate with real world carbon tax codes and propositions. The price of $7 is approximatley the current carbon tax on Danish 15

Figure 7: The change of rate of return with oil ination.

businesses set up in 1992. The price of $18 is the carbon tax on residences per ton of CO2 emitted. (Morris, 1994) On June 22, 2010 the European Commission debated the subject of a carbon tax. The price range was between 4-30 euros [26]. Rows six and seven analyze the eects that the highest and lowest carbon tax discussed by the EU [26].

3.5

Algae Lipid Content

The lipid content is one of the main factors that determines the price of the algae. The eect of changing the lipid content on the price of algae, the IRR, and the NPV are shown in table 4. The data in table 4 shows that the IRR and Table 4: % Lipid Content (dry weight) and its eect on NPV and IRR. Compare the changes in IRR with those in Table 3. Lipid Content (percentage) Price of Algae ($ per ton) IRR (%) NPV ($) 20 161.46 10.47 6389.07 10 136.55 6.53 2102.36 25 173.91 12.31 8532.43 6 126.59 4.82 126.59 NPV are aected by a ve to ten percent increase in algae lipid content.

16

Figure 8: Rates of return for several constant oil prices.

3.6

Expected Water Quality Improvements

This section of the paper will attempt to predict the improvements in the water quality at the Ballen WWTP based on multiple studies. It is not possible to make accurate predictions about the improvements in the water quality without testing them in a specic reactor set up. However, data suggests that certain important indicators of overall water quality improve during the production of algae for biomass. 3.6.1 Biological Oxygen Demand

The Biological Oxygen Demand (BOD) is the amount of oxgen required to stabalize the organic matter in the water. The BOD is commonly used to determine the ecency of treatment processes, and the size of wastewater treatment facilities [34]. It is important that treatment processes decrease the BOD for enviromental reasons. If water with a high BOD is discharged into a river, it could consume all oxgen in the water killing living organisms including sh. The incorporation of algae production into the wastewater treatment process decreases the BOD in the wastewater [32] [22] [17]. Table 5 below displays the improvements in the BOD of the wastewater from Park and Craggs experiment [32]. Their experiment used raceway ponds similar to the one outlined in section 2.1. The eects of algae production on the wastewater at Ballen should be within a similar range as [32]. The data in table (predicted results) shows the average 17

Table 5: Improvements in BOD from [32] BOD Initial (mg/L) BOD Final (mg/L) Removal (%) 257.7 14.4 94.4 reduction in BOD that could occur during month algae production. 3.6.2 Chemical Oxygen Demand

The Chemical Oxygen Demand (COD) determines the organic content of wastewater. [34]. Research indicates that algae production is not an eective way to remove the COD of wastewater. Figure 9 shows the COD of wastewater in an algae pond remains constant over 72 hours [22]. Figure 9: COD, from [32]

The COD of water in an algae production system can decrease if heterobacteria and nitrifying bacteria grow next to the algae. The data in [22] shows that the COD in the wastewater decreased by 32% after 13 days. The algae production process at the Ballen wastewater treatment is not expected to result in reduction in COD of the wastewater.

18

3.6.3

Total Nitrogen

The Total Nitrogen (TN) is the sum of organic, ammonia and nitrate concentration in wastewater. The TN removal in wastewater is important because it prevents enviromental damage, especially eutrication. As detailed in section 1.4.3, nitrogen is one of the most important nutrients necessary for algae growth. The algae production process is an eective way to decrease the TN in wastewater [22] [17]. Figure 10 shows the TN concentration in wastewater over a 72 hour period during algae production. There is a linear decrease in the Total Figure 10: Reduction in total N, from [32]

Nitrogen concentration from 11.7 to 6.1 mg per Liter. The algae only consume Nitrogen during photosynthesis. The reduction of 5.4 mg per Liter of the TN concentration corresponds to the redution of Ammonia Nitrate. The overall results of He, S, & Xue, G., state that over the average TN removal of the algae production system is 36% [22]. The nal TN concentration of the euent was always below 15 mg per Liter. One main factor that could determine the removal rate of TN is the relatively constant pH maintained throughout the algae production process. The conditions given by Martinez et al. removed the TN by 76% at a water temper19

ature of 25 C [17]. However, the pH of the system was not constant throughout the process. The utilization of ammonia decreased the pH of the system. At the same time, the utilization of hydro-carbonic acid by algae as a source of carbon dioxide increased the pH. 3.6.4 Total Phosphorous

Total Phosphorous (TP) is the concentration of the Total Phosphorus in wastewater. Section 1.4.3 states that phosphate is an important nutrient for algae production. Algae production eectivley removes phosphorous from wastewater [17] [22]. Figure 9 shows the removal of TP from wastewater through algae production over a 72 hour period. The results from He, S, & Xue, G., state that the discharge water from the algae production system always had a TP concentration less than 0.5 mg/L [22]. Multiple studies suggest that the maximum removal of phosphorous from wastewater is about 51% [9]. The results from He, S, & Xue, G., and Martinez et. al suggest that complete removal of phosphorous over a retention time period between 72-118 hours [22] [17]. For the purposes of this study, the reduction of TP in the wastewater will follow the accepted value of 51% [9]. However, algae production could result in a much higher reduction in TP. 3.6.5 Total Suspended Solids and Volatile Suspended Solids

Total suspended solids (TSS) are dissolved solids in wastewater. The TSS will not be removed using conventional gravity settling processes. The volatile suspended solids (VSS) will burn away at 550 C . Therefore, they are considered to be mostly organic material. TSS and VSS can be removed through ltration[34]. The production of algae increases the amount of TSS and VSS present in wastewater. Table 6 displays results from Park & Craggs [32]. Table 6: Reactor 4-day Retention Time with CO2 addition [32] Inuent (mg/L) Euent (mg/L) Total Suspended Solids (TSS) 79 175.2 Volatile Suspended Solids (VSS) 76 156.1 Percentage of VSS 96 89

Reduction (%) -121.8 -105.4 7

The percentage of VSS in the inuent and euent water is important. The similar percentages of VSS in the inuent and euent water show that the majority of the new solids in the euent water are organic. 3.6.6 Predicted Results

Table 7 below shows the predicted removal of BOD, TN, and TP by the algae production system. Table 7 also predicts the increase in the TSS as a result of algae production. The time period needed to remove achieve the predicted

20

Table 7: Predicted removal of BOD, TN, and TP by the algae production system Intial Concentration (mg/L) Concentration after algae (mg/L) Reduction (%) BOD 90-95 COD 75 75 0 TN 8 5.12-1.92 36-76 TP 1.5 0.74 51 TSS -121.8 VSS -105.4

removal rates is between 72-118 hours (which is less than the 6 day retention time of the pond of this analysis). 3.6.7 Other Areas of Reduction

There are many other areas of water quality which algae aect. The potential of algae to remove heavy metals in both industrial and municipal waste is well documented. As detailed in section 2.1, one of the main assumptions about the inuent into the Ballen Treatment plant is that there is a low concentration of heavy metals. Therefore, the removal of heavy metals is not discussed in detail. Algae production also has the potential to remove pathogens. Predicting the rate of pathogen removal would require actual samples from the Ballen Wastewater Treatment plant.

Discussion

This section of the paper discusses the technical, economical, and social benets and challenges associated with algae production using wastewater. It reviews and analyzes data presented in other sections and makes policy recommendations.

4.1

Economic Harvesting System

The price of harvesting equipment, CO2 equipment, and mixing equipment must decrease to implement projects for low-cost algae production. The electrical efciency of equipment must also increase if algae production will compete with oil and agricultural crops as a fuel source. The results of the model and the sensitivity analysis conducted in section 3.2 show that equipment costs greatly impact the feasibility of producing algae. The centrifuge sensitivity analysis shows that it is impossible to implement such technology on a small scale. Industrial centrifuges, such as the Westfalia DA200 Centrifuge, harvest algae at eciencies greater than 95%. However, the cost of these systems, as seen in table 2, make the implementation of technology for the production of fuels too expensive. The Westfalia DA200 Centrifuge system analyzed in this paper was also refurbished. The alternative scenario, Westfalia DA200 Centrifuge without 21

electricity Costs, did not result in a positive NPV. This alternative assumed that the centrifuge would operate only during times when wind power was abundant in the market. Therefore, the cost of electricity would be almost free. Despite the high consumption of electricity required by the centrifuge process, the alternative resulted in a negative NPV.

4.2

Photobioreactors

Photobioreactor technology has the potential to make algae production more economically competitive in a country such as Denmark. The photobioreactors can produce algae at a much faster rate than open ponds because the algae is grown in enclosed, well-monitored tubes (or other kinds of pipe). Photobioreactors maintain a constant temperature and operate year around in any climate condition. The reactors can use the sunlight as a source of free energy to grow the algae during the day. The high initial costs and energy demands of current reactor technology make algae production from wastewater a risky investment today. The following set of conditions would make photo-bioreactors a viable option for algae production with wastewater treatment. Utilize the wastewater from the treatment plant at a high ow rate while limiting the amount of TSS from algae production Use an external heat source to maintain a constant temperature Maximize the use of inexpensive electricity from the grid during peak wind power production The development of bioreactors that meet these conditions could make the production of algae at the Ballen WWTP. These types of bioreactors utilize the renewable energy available in the Danish grid to compensate for environmental conditions.

4.3
4.3.1

Carbon Dioxide
Technical

The main technical benet from the use of ue gas in algae production is increased algae yield. However, there are many problems pertaining to the use of u gas. It is necessary to analyze the eects of various types of u gas on dierent algae species. One of the main assumptions in this model is that u gas will increase the yield of algae and never inhibit growth, one worth reconsidering. Carbon dioxide is a much more dicult gas to diuse through water than oxygen. However, current techniques for transferring carbon dioxide into water are similar to the way oxygen is transferred into tanks during activated sludge wastewater treatment. Improvement in the technology to transfer carbon dioxide to algae is necessary to improve algae absorption.

22

4.3.2

Economic

The sensitivity analysis on the price of carbon dioxide in section 3.4 shows that carbon dioxide market prices heavily dictate the IRR and NPV of the system. Potential prots increase and decrease greatly depending on the price of CO2 (table 3). It is important to capitalize on the emerging market for carbon dioxide because this production process has the potential to sequester signicant amounts. Studies have shown that the mass of carbon dioxide sequestered by Chlorella Sp., a representative species for our plant with a 20 % lipid content in ideal conditions, is between 10-50% of the CO2 per ton of algae bubbled into the water. Thus, we quickly obtain a return for every ton of algae produced from carbon mitigation. According to Peter Kinch, the head of Climate Centre at Nordjysk Elhandel, the algae production system would be eligible to receive a carbon credit for each ton of carbon dioxide sequestered by algae. The wastewater treatment plant would only receive credits for carbon dioxide sequestered by algae. It would not be penalized for carbon dioxide that escaped in the air. The sequestration of carbon dioxide is more protable than the production of algae when the price of carbon dioxide per ton is between $19-20. If the absorption rate of algae increases from 50% to 60%, the IRR increases from the baseline prediction of 10.4% to 12.2%. These predictions indicate there is a lot of economic motivation to optimize the carbon dioxide delivery system and increase absorption of carbon dioxide for algae. The production of large amounts of low-cost algae to obtain carbon dioxide credits is possible. Harvesting before algae reach full growth would result in more mass per year, but algae with a lower average lipid content. This would maximize the amount of carbon dioxide sequestered during the production process. The Ballen wastewater treatment plant would need to identify a producer of biodiesel that can accept dierent amounts and qualities of algae during the eight month harvesting period. The producer would need to facilitate algae with dierent lipid contents. One positive aspect about the production of biodiesel is that it utilizes a blend of dierent raw materials.

4.4

Oil Prices and Ination Rate

The sensitivity analysis in section 3.3 show the IRR and NPV of the algae production system relies on crude oil prices (as the foundation of our revenue model). The data in gure 8 show the relationship between oil prices and IRR. Figure 7 show the relationship between the oil ination rate and the IRR. Higher oil prices and algae with higher lipid content results in much higher prots. If oil prices decrease signicantly over the next ten years, high quality biomass could be utilized for other purposes, such as plastics or pharmaceuticals. One problem with trying to produce high quality algae from this system is that the input of nutrients and carbon dioxide are unpredictable.

23

4.5

Water Quality

The predictions displayed in Table 7 are very rough estimates meant to emphasize the potential of algae production to improve the quality of wastewater. The high removal rates of TN and TP decrease the possibility of eutrophication in the discharge water. The increase in the water quality due to algae production helps meet regulation outlined in section at a cheaper price. The water can be reused in non-potable ways. If the groundwater supply in Sams is at risk, the water can be pumped into the ground, where it would slowly mix with groundwater.

4.6

Regulations

The Council Directive of 21 May 1991 concerning urban waste water treatment constitutes the framework for the procession of domestic and industrial wastewater as well as run-o rain water. Its main focus is to protect the waters in the EU member states through appropriate collection, treatment and discharge of urban waste water. Based on the Council Directive EU member states have enacted national laws. The design of the WWTP has to guarantee representative samples to be taken of incoming and euent water before being transferred to receiving waters. Moreover the eect on the receiving waters shall be limited by elaborating the best point of discharging the water. Annex 1 prescribes the number of annual samples based on the treatment plant size. The Directive sets the limit for TSS concentration in the samples at 35 mg/l for a p.e. of 10.000. The minimum percentage of reduction is 90%. Systems with a load equivalent to 2000-10000 p.e. are allowed to have a concentration of 60 mg/l TSS. Under these circumstances, the minimum reduction is 70%. The algae production system at Ballen does not help the treatment process meet these regulations because it increases the TSS. The required BOD in discharge water cannot exceed 25 mg/l. The reduction of BOD by the treatment process must be at least 70 to 90%. The prediction in table 7 states a BOD reduction of 90-95% is possible. The algae production system helps meet the BOD reduction requirement mandated by the Council directive. The concentration limit of COD is at 125 mg/l and the minimum reduction is 75%. Based on the results in table 7, the implementation of algae in the WWTP in Ballen will not signicantly change the COD. The initial concentration of phosphorous in Ballen is 1.5 mg/l. With algae production, the TP concentration could improve by 51% to 0.74 mg/l. This reduction fullls the 2mg/l concentration required by the law. The directive requires an 80% reduction in initial TP concentration. Therefore it is inconclusive whether algae production fully meets regulations. A TN change from 8 mg/l to 5.12-1.92mg/l is predicted through implementation of algae production. The maximum TN allowed by law is 15 mg/l. The required reduction of TN concentration in incoming water is 70-80%. The predicted TN concentration reduction through algae production is 36-76%.

24

4.7

Accuracy of Predictions and Assumptions

The generous assumptions made to calculate the biomass yield rate (per season) should be challenged by comparing the results with actual biomass yields in the region of Sams. Because they do not consider predation, invasive species, impacts of ue gas, daily uctuations in temperature and light, and wastewater composition, we wish to include these factors in future work. Actual experiments must be carried out utilizing the Ballen Wastewater Treatment inuent over the period of many months to obtain meaningful results. The composition of the wastewater, amount of sunlight, temperature (both water and general), and hydraulic retention time are some of the factors that would greatly aect the results at Ballen. The actual removal of BOD depends on multiple factors including the initial BOD and growth rate of algae. The removal rate of TP and TN only occurs during photosynthesis. Therefore, weather patterns over the eight month growing period in Denmark would aect the results displayed in table 7 greatly. One of the main assumptions in this paper is that the wastewater would provide the algae with high amounts of nutrients, while never inhibiting production. A constant pH can be maintained in the wastewater using carbon dioxide. Although certain studies have shown that treating raw wastewater is possible with algae, these studies have not tried to grow algae as a product. This project did not investigate the eects pathogens, pharmaceuticals, antimicrobial resistant bacteria, hospital euent, and industrial wastewater could have on algae production. Furthermore, we did not investigate the possibility that storm run-o during the Denmark spring months could contain pesticides from elds or oil from automobiles.

4.8

Society and Policy

This section deals with challenges as gaining local support to bring the wastewater treatment project forward. Further the potential ways of raising capital is going to be described and a proposal for future actions concerning the integration of algae for biodiesel is given. 4.8.1 Policy Challenge: Local Support

In 1998 Sams started to orientate its citizens about the concept of a 100% renewable island. It was very important to win sympathy of the local people for this project. To give them a sense of community local contractors and electricians were hired for foundation and installation work and umpteen public meeting were held. The intense eort obviously was worth it because many renewable energy units are nowadays directly nanced by Samss inhabitants. They sensed it as a way to boost the business and wanted so support it actively. The eleven 1 MW installed wind turbines are today owned by individual persons and a windmill cooperative.

25

4.8.2

Social Challenge: Raising Capital

If people shall invest in the WWTP they have to be well-informed about the ongoing processes. Providing participation options might pave the way for the development of a cooperative. In Ballen-Brundby for example the district heating plant is owned and controlled by the consumers connected to the network. In this case Special Purpose companies distribute the annual income without taxes and minus the operating costs to the stakeholders [24]. Previous projects on the construction of wind turbines raised money from feed-in taris, subsidies and municipal ownership. A feed-in tari would charge the citizens of Samso an extra price on their water bill and would use these funds to develop the algae project at the WTTP. This option for raising capital is the least popular option in terms of public support. The chance to receive a subsidy from the government is high due to its previous support in wind turbine and the willingness to subsidize the planned new biogas plant. Another nance scheme is municipal ownership. It is the best way to secure steady funding and promote the product. Shares of the production system for algae and biodiesel could be auctioned o publically. The municipality already bought ve oshore wind turbines by borrowing 125 million DKK (17 mill EUR). A share of the turbine is owned by each citizen. In case prot can be generated the money has to be paid back into projects concerning energy instead of being used for operational tasks of the municipality [24]. 4.8.3 Setting New Goals for the Biores Project

The biores project, which was written in cooperation of six European islands, focuses on the production of biogas from municipal waste. The goal is to reduce landll waste, while simultaneously create energy for district heating. According to the Sams Report, Sams has the capacity to produce enough biodiesel for the islands energy demand of 500 TJ per year. Denmark has the ideal climate conditions and highly skilled farmers to produce high yields of rapeseed oil. In 2003 the local production of rapeseed started as a demonstration project. Its purpose was to submit tractors with oil and provide rapeseed feed for animals. Today rapeseed is used in the tractor and car of only two farmers. The project failed partially because biodiesel was not considered a renewable fuel. Therefore, the high national tax on gasoline applied to the biodiesel [25]. The new goals for the Biores project should be to expanded and incorporated production of biodiesel from the islands raw materials including algae and rapeseed oil. The government must grant the island of Samso an exemption on the fuel price tax for biodiesel. The production of biodiesel is a sustainable process that improves wastewater quality, and sequesters carbon dioxide. Further biodiesel does not contain sulphur, which creates S02 and leads to acid rain. In comparison with conventional diesel biodiesel sets fewer solid particles free [28].

26

Conclusion

In conclusion, our predicted algae production process, coupled with a WWTP and a power plant supplying ue gas, could cover its costs with a 10.47% rate of return. We emphasize the sustainability of the production process over its potential to produce biodiesel: carbon mitigation from ue gas and the function of wastewater treatment may far outweigh revenues from biodiesel and biogas production. However, the assumptions made to determine the theoretical biomass yields ( 15grams per square meter per day, over the summer season) should be compared to existing data in the region of Denmark and modied to account for chemical and environmental factors beyond light and temperature. The economic model should also be updated to actual algae sales prices, not theoretical prices based on a break-even price with crude oil. To make this open pond system truly feasible, reductions in equipment costs, particularly those of harvesting equipment, must be realized. Increases in the price of oil and carbon taxes will help the development of this technology, as the limited (though locally bencial) biodiesel production for the community of Sams will not cover the costs of production over an extended period of time, factoring in problems such as land costs and equipment failures. Hopefully interaction with the proposed biorenery will make this plan feasible in the near future.

References
[1] Denmark stock index. http://www.tradingeconomics.com/Economics/ Stock-Market.aspx?Symb. [2] Europe energy portal. http://www.energy.eu/. [3] Taxation in denmark. http://www.investindk.com/db/pub/ TaxationinDK/html/chapter01.htm. [4] United states energy information petroleum navigator. http://www.eia. doe.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rwtc&f=a. [5] Council directive of 21 may 1991 concerning urban wastewater treatment. European Economic Community, May 1991. [6] Point source report, 2008. [7] Nasa surface meteorology and solar energy: Retscreen data. eosweb.larc.nasa.gov/sse/RETScreen/, August 2010. http://

[8] Henrik R. Andersen, Jesper Kjlholt, Martin Hansen, Frank StuerLauridsen, Thomas Dueholm Blicher, Flemming Ingerslev, and Bent Halling-Srensen. Degredation of estrogens in sewage treatment processes.

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Environmental Project 899, Danish Environmental Protection Agency, 2004. [9] C.E. Boyd and Y. Musig. Orthophosphate uptake by phytoplankton and sediment. Aquaculture, 22:165173, 1981. [10] Liam Brennan and Phillip Owende. Biofuels from microalgaea review of technologies for production, processing, and extractions of biofuels and co-products. Renewable and Sustainable Energy Reviews, 14:557577, 2010. [11] Yusuf Chisti. Biodiesel from microalgae beats bioethanol. Biotechnology, 26(3):126131, 2007. Trends in

[12] Andres F. Clarens, Eleazer P. Resurreccion, Mark A. White, and Lisa M. Colosi. Environmental life cycle comparison of algae to other bioenergy feedstocks. Environmental Science Technology, 44(5):18131819, 2010. [13] Delphine Demazel. Use of algae as an energy source. http://www. folkecenter.net/mediafiles/folkecenter/pdf/Report_algae.pdf, September 2008. [14] P. Duarte. A mechanistic model of the eects of light and temperature on algal primary productivity. Ecological Modeling, 82:151160, 1995. [15] P.H.C. Eilers and J.C.H. Peeters. Dynamic behaviour of a model for photosynthesis and photoinhibition. Ecological Modeling, 69:113133, 1993. [16] E. Grima et al. Recovery of algal biomass and metabolites: process options and economics. Biotechnology Advances, 20:491515, 2003. [17] M. E. Martinez et al. Nitrogen and phosphorous removal from urban wastewater by the microalga scenedesmus obliquus. Bioresource Technology, 73:263272, 2000. [18] Joel C. Goldman and Edward J. Carpenter. A kinetic approach to the eect of temperature on algal growth. Limnology and Oceanography, 19(5):756 766, 1974. [19] R. Goldstein. Water & sustainability: U.s. electricity consumption for water supply & treatmentthe next half century. Technical report, EPRI, 2002. [20] Erik Gr onlund, Anders Klang, Stefan Falk, and J orgen Hans. Sustainability of wastewater treatment with microalgae in cold climate, evaluated with emergy and socio-ecological principles. Ecological Engineering, 22:155174, 2004. [21] Jess Halliday. Swiss company derives dha and epa from algae. http://www.nutraingredients.com/Industry/ Swiss-company-derives-DHA-and-EPA-from-algae, March 2006.

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[22] Shengbing He and Gang Xue. Algal-based immobilization process to treat the euent from a secondary wastewater treatment plant (wwtp). Journal of Hazardous Materials, 178:895899, 2010. [23] Qiang Hu. Several fundamental biological aspects of algal biofuel application. In Jonathan Trent, editor, Wind Sea Algae Workshop Proceedings, pages 1528, Maribo, Denmark, April 2009. Baltic Sea Solutions and STP Productions. [24] Jan Jantzen and Sren Hermansen. Action plan for the island of sams deliverable d7.2 draft. Technical report, Biores, Sams Energy and Environmental Oce (SEMK), Denmark, March 2010. [25] Peter Jacob Jrgensen. Samsoa renewable energy island: 10 years of development and evaluation. Technical report, PlanEnergi, 2007. [26] James Kanter. Europe considers new taxes to promote clean energy. http: //www.nytimes.com/2010/06/23/business/energy-environment/ 23carbon.html?_r=4&ref=cap_and_trade, 22 June 2010. [27] Amit Kumar, Sarina Ergas, Xin Yuan, Ashish Sahu, Quiong Zhang, Jo Dewulf, F. Xavier Malcata, and Herman van Langenhove. Enhanced CO2 xation and biofuel production via microalgae: recent developments and future directions. Trends in Biotechnology, 28:371380, 2010. [28] H. et al Larsen. New and emerging bioenergy technologies. Ris Energy Report 2, 2003. [29] David Morris. Green taxes. http://www.ilsr.org/ecotax/greentax. html, 1994. [30] Steen Nielsen and Neil Willoughby. Sludge treatment and drying reed bed systems in denmark. WEJ, pages 296305. [31] Chan S. Park. Contemporary Engineering Economics. Prentice Hall, 4 edition, 2007. [32] J.B.K. Park and R.J. Craggs. Wastewater treatment and algal production in high rate algal ponds with carbon dioxide addition. Water Science & Technology, 61(3):633639, 2010. [33] Y. Shen, W. Yuan, Z. J. Pei, Q. Wu, and E. Mao. Microalgae mass production methods. Transactions of the ASABE, 52(4):12751287, 2009. [34] George Tchobanoglous and Edward D. Schroeder. Water quality management. Addison-Wesley Publishing Company, Menlo Park, CA, 1987.

Biomass yields

The biomass yield calculations produce the following monthly table. 29

Table 8: Biomass yields, calculated by the Arrhenius equation and potential from solar radiation at Sams Biomass yield(grams per square meter per day) Month 0.604344974 January February 1.391343399 March 3.252745308 7.601075626 April May 16.16408718 21.87170088 June July 26.26835674 21.66856419 August September 9.721507286 3.485161852 October November 1.095138788 December 0.53622655 Yearly average 9.471687732 Seasonal average 15.25435054

Cash Flow and Inputs

The cash ows are saved in an Excel le. Snippets have been presented here. The following tables show the inputs to the cash ow as well.

30

Table 9: Cash ow spreadsheet used in the economic analysis, page 1

Ponds
Alternative 1 Utiliziation of Existing Ponds 0 1 Income Statement Income Algae Sale $5,440 Electricity Saving $1,247 Annual Expenses Maintenance Replacement of Damaged Parts Electricity Carbon dioxide Electricity Harvesting Electricity Mixing Carbon Emissions Carbon Dioxide Sequestration Carbon Dioxide Saving Electricity Depreciation Values Carbon Dioxide Pump Mixing Equipment Harvesting Equipment Taxable Income Income Tax Net Income Cash Flow Statement Operating Activities Net Income Depreciation Values 2 3 4 5 6

$5,620 $1,276

$5,805 $1,305

$5,997 $1,335

$6,195 $1,366

$6,399 $1,397

($3,284) ($3,359) ($3,436) ($3,515) ($3,596) ($3,679) ($1,642) ($1,680) ($1,718) ($1,758) ($1,798) ($1,839) ($141) ($144) ($148) ($151) ($155) ($158) ($289) ($295) ($302) ($309) ($316) ($323) ($86) ($88) ($90) ($92) ($95) ($97)

$2,569 $68

$2,653 $70

$2,741 $72

$2,832 $75

$2,925 $77

$3,021 $80

($2,710) ($2,710) ($2,710) ($2,710) ($1,355) ($1,355) ($1,355) ($1,355) ($4,144) ($4,144) ($4,144) ($4,144) ($4,326) ($4,156) ($3,980) ($3,796) $4,603 $4,801 $1,298 $1,247 $1,194 $1,139 ($1,381) ($1,440) ($3,029) ($2,909) ($2,786) ($2,657) $3,222 $3,361

($3,029) ($2,909) ($2,786) ($2,657) $8,209 $8,209 $8,209 $8,209

$3,222

$3,361

investing Activities Carbon Dioxide Pump ($10,839) Mixing Equipment ($5,420) Harvesting Equipment ($16,576) Working Capital ($1,313) ($1,313) ($1,344) ($1,375) ($1,406) ($1,438) ($1,472) $1,313 $1,344 $1,375 $1,406 $1,438 Financing Activities Borrowed Funds $32,835 Repayment on Principal ($2,735) ($2,844) ($2,958) ($3,076) ($3,199) ($3,327) Payment for Intrest ($1,313) ($1,204) ($1,090) ($972) ($849) ($721) ATCF Net Present Value ($1,313) $388 ($181) $1,221 $1,344 $1,471 ($859) ($721)

Page 1

31

Table 10: Cash ow spreadsheet used in the economic analysis, page 2

Ponds
7 8 9 10

$6,611 $1,429

$6,829 $1,462

$7,054 $1,496

$7,287 $1,530

($3,764) ($3,850) ($3,939) ($4,029) ($1,882) ($1,925) ($1,969) ($2,015) ($162) ($166) ($169) ($173) ($331) ($338) ($346) ($354) ($99) ($101) ($104) ($106)

$3,121 $82

$3,224 $85

$3,331 $88

$3,440 $91

$5,006 $5,220 $5,441 $5,671 ($1,502) ($1,566) ($1,632) ($1,701) $3,504 $3,654 $3,809 $3,970

$3,504

$3,654

$3,809

$3,970

($1,505) ($1,540) ($1,575) $1,472 $1,505 $1,540

$1,575

($3,460) ($3,599) ($3,743) ($3,893) ($588) ($449) ($305) ($156) ($578) ($429) ($275) $1,497

Page 2

32

Table 11: Inputs to the cash ow analysis, page 1

Pond_inputs

Inputs Marginal Tax Rate Ination rate MARR Interest Rate MARR' Electrical Ination Rate Oil Ination Rate Algae Ination Rate C02 Ination Rate Wastewater Treatment Plant Flow Rate (Q) annual Days per year Flow Rate daiy Residence time in Algae System Activated Sludge Treatment Elec Demand Total Electriity Demand Biological Treatment Process Electricity Through Biological Treatment Perecetage of Electricity avoidied in Biological Treatment Electricity Saved Cost electricity saved

30% 2.30% 15% 4.00% 12% 0.00% 1.00% 3.30% 1.00%

164846 365 451.6328767 6 0.591 97423.986

m^3/year m^3/day days KwH/m^3 KwH

38969.5944 KwH 0.3 7793.91888 $1,247.03

Page 1

33

Table 12: Inputs to the cash ow analysis, page 2

Pond_inputs
Value Algae Pond Capacity pond Volume pond Area Hectres conversion Hectres of algae growth 2709.79726 10839.18904 10000 1.083918904 m^3 m^2 m^2 hectres

Algae Generation rate Petroleum Price per Barrel Energy Petroleum Lipid content Biogas generation volume Energy Biogas Yield biodiesal from Algal Oil Energy Biodiesal Price per ton Algae Yield of Algae Growth Rate Algae Production without Carbon Dioxide Biomass production Algae Production with Carbon Dioxide Algae Production with Carbon Dioxide Increased productivity Algae Generation Days per year Algae Produced annual Annual Income Algae

$72.76 6100 $0.06 400 23.4 0.8 37800 mg/(L*day) $126.59 kg/m^3*day 15.25 g/m^3

165.2976329 kg/day

198.3571595 kg/day 0.2 260 days 42.97738455 tons $5,440.42

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Table 13: Inputs to the cash ow analysis, page 3

Pond_inputs
Electricity Electricity Prices Average Price of Energy Denmark Price Non-peak demand Demands Paddle Wheel System per 1000 m3 Harvesting per 1000 m^3 Carbon Dioxide demand per 1000 m^3 Carbon Dioxide System Paddle Wheel System Harvesting per liter Costs (annual) Paddle Wheel System (annual) Harvesting (annual) Carbon Dioxide System (annual) Costs (8months of year) Paddle Wheel System (8months) Harvesting (8months) Carbon Dioxide System (8)mnths ration months collection per year Days operating per year Average

$0.16 cents per Kwh 0 cents per Kwh

1.23 4.11E+000 2.01 1323.546276 809.9313031 2706.355818

KWH/m^3 KWH/m^3 KWH/m^3 kwh kwh kwh

$129.59 $433.02 $211.77

$86.39 $288.68 $141.18 0.666666667 243

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Table 14: Inputs to the cash ow analysis, page 4

Pond_inputs
Equipment Costs (Installation) Harvesting (combined Floculation and Centrefuging) Cost per hectre algae Additional Centrefuging Costs Cost Installation Carbon Dioxide Pumping Cost System per hectre pond Cost of System

$14,500.00 $20.00 per ton $16,576.37

$10,000.00 $10,839.19

Mixing Cost Costs of Paddle Wheel per hectre algae pond Cost of Paddle Wheel

$5,000.00 $5,419.59

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Table 15: Inputs to the cash ow analysis, page 5

Pond_inputs
Annual Costs Maintenance Carbon Dioxide Credits Cost of Carbon Dioxide to Society Externalities Carbon Dioxide emissions Carbon Dioxide Saved Costs Carbon Carbon Carbon Carbon Dioxide Dioxide Dioxide Dioxide Sequestered per ton algae Sequestered Absorption Rate Sequestration Benets Costs $3,283.52

$7.00 per ton 0.00124 tons per KwH $67.65 3.7 tons 733.92149 tons 50.00% $2,568.73

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