“Reducing expenses through resale”
The average existing carbon positive Ethanol plant cost around $300 million to design and construct. To believe that a facility that produces federally approved carbon neutral energy products can be constructed cheaply is naive. All biomass based energy producers are confronted with staggering upfront construction costs. The majority of those who have tried and failed in the past focused only on producing biomass oil for fuel.
Of all of the products that you can make from dried alga, fuel provides the least return on investment. You will not be able to survive startup costs if you are depending only on the sales of algae oil to fuel manufacturers. If you calculate that Biodiesel sells for $3 a gallon, you can estimate that there is 240 gallons in a ton of Biodiesel. That’s only $720 income for a ton of alga oil.
During startup, production costs to grow alga can easily exceed $650 a ton. Producing dried alga as a food supplement provides the highest return and this is what we will initially focus on. One species of high protein dried alga animal feed supplement currently sells for over $4,000 a ton. Human dietary supplements made from a dried alga species called “Spirulina” sell for an average of $10,000 a ton. That’s a 600% to 1,500% difference on the return on investment versus a 10% ROI to try to produce fuel. Because we are a non profit, we are allowed to sell products that are produced as a direct result of our charitable function but we are required to sell that product below market price and 100% of the money received must be used to pay operating expenses.
So, after we are up and running we will be able to assist in supporting ourselves rather than completely depending on your donations to survive. After recovering construction costs, daily operating costs will drop sufficiently to allow a facility to successfully shift primary production to fuel oil.
As a nonprofit corporation our mission is to show that with a relatively small amount of startup funding, a facility can be constructed that provides food, fuel, and electricity from local resources and that we will be capable of scaling up to a size where ultimately our facilities will be capable of generating enough income to pay for 100% of their daily operating costs.
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