Departments - Features
Bio-Fueling the Future
3/15/2010
Four Canuck technologies are out to change the way we gas up.
Photo by ©Dreamstime.com/ Dimitri ZimmerCanada might hold much of the world’s oil supply, but that is not stopping its entrepreneurial companies from being world leaders in second-generation biofuel technologies. More than 100 companies are in the race to prove their technology can replace fossil fuels with affordable and planet-friendly biofuels to heat homes and schools, and rev up industrial and transportation engines.
Despite decades of work, the majority of the next generation biofuels – which are made from materials that do not compete with food production – are still in the R&D stage. But, a few Canadian companies are among the dozen that are commercial or near commercial, and each has the potential to change the way the world fuels up.
Leftover Wood
This West Coast company initially developed their small gasification units for large pulp and paper or lumber facilities to take leftover wood and make heat and/or power to replace fossil fuel used in the plant or sell electricity to the grid. But when the forest industry took another turn for the worse, Nexterra turned to urban markets. It has sold its gasification systems not only to pulp and plywood mills but to environmentally-minded universities, communities, and municipalities that want to provide clean, low-cost renewable energy to their constituents. Soon Nexterra’s technology will heat and power the center of energy research in America, the Department of Energy’s Oak Ridge National Laboratory in Tennessee.
The $89 million project is being led by Nexterra’s partner Johnson Controls – the two formed a strategic alliance to develop biomass gasification projects after working together on a similar project at the University of South Carolina.
By tapping into new markets Nexterra has been able to continually win new rounds of investment by Calgary private equity firm ARC Financial, which holds a majority stake in the company, to pursue an aggressive development path. What is the next step for Nexterra: Using its gasification systems to generate heat and power from small-scale plants (2MWe to 10MWe) by direct firing syngas into high efficiency gas engines.
Pyrolysis Technology
This Ottawa company came up with its fast pyrolysis technology 25 years ago when oil prices were still in their teens. Ensyn stuck to its promising technology, which turns biomass like wood waste into a thick pyrolysis oil (or bio-oil), despite a tough energy market. Pyrolysis’ oil’s natural barbeque flavoring proved lucrative in 1989 when Ensyn commercialized its first application of its technology – for the food flavoring industry with Wisconsin-based Red Arrow. Today, its pyrolysis oil produces 30 different products. The company’s philosophy – to perfect its process and find the best partners possible to get its technology and liquid to market – never wavered. In 2005, it inked a $100 million deal to license the fossil fuel upgrading application of their technology to Ivanhoe Energy, which uses it to refine heavy oil from the tarsands. Ensyn’s portfolio also includes bio-based chemicals used in the construction materials manufacturing industry.
Ensyn’s pyrolysis oil is currently replacing fossil-fuels in heating and electricity applications, especially in the forest products sector where a ready supply of wood waste can seriously offset process power costs.
But what has most tongues wagging is using pyrolysis oil to produce renewable drop-in transportation fuels and, thanks to a deal with UOP – a subsidiary of manufacturing giant Honeywell – Ensyn just got a lot closer to the finish line. The idea here is to refine the pyrolysis oil to a state where it can be slotted into the existing oil refinery infrastructure to produce green gasoline, diesel, and jel fuels.
Senior vice president, Randall Goodfellow, says Ensyn could have taken its technology to market itself but “it is a super humongous task and there are already people who have those connections.”
By sticking to its philosophy of hooking up with credible partners, Ensyn's deal with UOP resulted in the formation of Envergent Technologies in October 2008. As mentioned before, its goal is to increase the pace of the global deployment of Ensyn’s fast pyrolysis technology to produce pyrolysis oil for thermal and electrical applications, as well as to commercialize the equipment to upgrade pyrolysis oil into renewable liquid transport fuel. Ensyn’s joint venture with UOP has gained Ensyn a worldwide sales force and a Honeywell backed guarantee on the performance of their technology.
Goodfellow says that the equipment to upgrade pyrolysis oil into green transportation fuel will be ready to slot into existing fossil oil refining infrastructures by 2012.
A Changing Market
Another promising bio-oil producer is Vancouver’s Dynamotive Energy. Its inventive approach was recognized this summer when it received the 2009 Intergovernmental Renewable Energy Organization Innovation Award. Using leftover wood, such as construction waste, Dynamotive has been turning wood into bio-oil for years at its 130 tonnes per day West Lorne plant, fueling a 2.5MW turbine that produces power for the Ontario grid. In addition, Dyanmotive is selling the oil to a U.S. customer for the heating market.
However, the economic downturn sparked a fresh approach from management. Instead of playing project developer, Dynamotive, too, is seeking solid partners. In a conference call discussing the company’s fourth quarter results for 2009, CEO Andrew Kingston says the market is taking a “significant departure,” now large energy and oil companies want to develop projects themselves, “so it is a question of a decision of whether the technology meets their requirements, rather than us having to raise the capital and put the project together.”
Dynamotive has a number of potential plants and deals ready, in China, Argentina, Australia, and Europe. In 2010 it is concentrating on those that are at the financing stage and it is focusing on third party licensing, Kingston says.
Like Ensyn, Dynamotive’s big goal is to perfect a process to upgrade its heavy bio-oil into a middle distillate that can be inserted into existing oil refineries to produce renewable transportation fuel. And, like Ensyn, it is racing to be the first.
Shown above is Enerkem’s thermo-chemical process for bioethanol.Garbage to Bioethanol
From a small research laboratory in Sherbrooke University in 1999 to a large commercial facility that will see Enerkem’s gasifier turn Edmonton’s garbage solid into 36 million liters of bioethanol a year, this Quebec company is pursuing aggressive growth. When the facility is operational in mid-2011, it will be the first commercial operation in the world to take municipal solid waste (about 100,000 tonnes annually) and turn it into a renewable ethanol that can be pumped into our gas tanks.
And that is just the beginning. The privately held company claims its 25-year contract with the City of Edmonton is the only long-term feedstock supply agreement between a fuels and chemicals producer and a large municipality anywhere in the world. Enerkem is modelling its future developments on this partnership.
Speaking at the Canadian Bioenergy Association’s annual conference last October, Denis Arguin, VP engineering and project implementation at Enerkem outlined a similar $250 million deal with a waste management company in Pontotoc, MS, for a 20 million gallon per year bioethanol from MSW plant, twice the capacity of the Edmonton facility.
Vincent Chornet, president and CEO of Enerkem, says Enerkem’s aggressive path to commercialization is one of the cornerstones of its success. With 3,500 hours of testing using more than 20 different types of feedstock since 2000 – first in a pilot then a demonstration plant – Enerkem quickly proved its technology works, lowering investor risk.
Confidence and Partnering
In this market timing is critical. A recent report by Accenture, Betting on Science, Disruptive Technologies in Transport Fuels, identified 12 key technologies – from electric cars to algae – that could transform the way we gas up. But, the report warns, “all of the technologies are in play now, and there is a race to commercialization. The success of one technology will impact the potential market of the others.”
Still new technology companies can risk everything by trying to commercialize too early. Chornet warns other emerging renewable energy companies, “not to skip any steps. Having the long but necessary pilot step is an absolute need before your first industrial scale-up. Do not try to rush into it you will pay the price after.”
Chornet also urges new companies to be creative. For new companies, finding financing is always the barrier – and Enerkem’s ablity to court a mix of financial partners shows creative thinking. It is money comes from equity funding, government support and long-term partnerships with industry or municipalities.
One final piece of advice Chornet has for emerging companies: Clear communication. “Make sure your business plan and technology development path are well articulated and that results are well explained to your shareholders,” Chornet says.
Confidence also goes a long way when you are shopping around a revolutionary idea. Asked what he would have done differently on Enerkem’s route to commercialization, Chornet answers: “nothing.”
Douglas Bradley, president of the Canadian Bioenergy Association, says Canada’s advanced bioenergy technologies are still unknown in some sectors – and that needs to change. If these companies want to win the race, they need to find strong investment or form strategic partnerships like Ensyn’s deal with Honeywell, he says. And with more promising advanced biofuel technologies from Canadian companies like Lignol and Iogen nearing commercialization, the Canadian Bioenergy Association is focusing on promoting these technologies to potential investors worldwide.
This year CanBio is leading a series of trade missions and study tours to promote Canada as an innovative leader in advanced biofuel, and as an ideal site to implement biomass heat, power and pellet technologies. CanBio is planning a mission to China in collaboration with Australia and the World Bioenergy Association and a study tour to Italy and Austria in May. In addition to trade missions, CanBio offers opportunities to network with the Canadian bioenergy industry through workshops and conferences. Their website offers more details.
Nexterra Systems Corp.
Vancouver, British Columbia,
Canada
nexterra.ca
Ensyn Technologies Inc.
Ottawa, Ontario, Canada
ensyn.com
Dynamotive Energy Systems
Richmond, British Columbia,
Canada
dynamotive.com
Enerkem
Montreal, Quebec, Canada
enerkem.com
Canadian Bioenergy Association
Ottawa, Ontario, Canada
canbio.ca
Crystal Luxmore works for the Canadian Bioenergy Association and may be contacted at admin@canbio.ca.