For Colorado State University spinoff Solix Biofuels, the promise of its algae fuel has drawn the interest of some atypical investors: a massive oil refinery operator and the investment arm of a Native American tribe. This morning the three-year-old algae fuel producer said it has raised $10.5 million — with an additional commitment of $5 million — in its first round of outside funding from I2BF Venture Capital; Bohemian Investments; Infield Capital; Southern Ute Alternative Energy, which manages clean power investments for the Southern Ute Indian tribe; and Valero Energy, the largest U.S. oil refinery operator.
Solix Biofuels and Southern Ute Alternative Energy will jointly develop a pilot plant on a 10-acre site on the Southern Ute Indian Reservation in Southwest Colorado, which will use algae to produce biofuels and feedstocks for the chemical industry. The first portion — four acres of photo-bioreactors and one acre of lab space — will be completed in the next 12 to 18 months; Solix will add on another five acres, which the company says will put it at commercial-scale.
Solix uses closed photobioreactors — often clear tanks — to produce its algae. Companies that use closed algae growing systems do so to control the environment in the tank and also to be able to distribute the tanks in a variety of locations. Open algae-growing systems are cheaper but need to be able to combat outside contaminants and are reliant on the environment.
Investors see algae as a promising next-generation biofuel because algae can yield high amounts of fuel per volume, is an efficient energy-producer and can recycle carbon in its production. In the second quarter of this year algae investing hit a record, with $84 million going into algae startups, including a $50 million round for Sapphire Energy.
Solix’s technology hails all the way back to the U.S. Department of Energy’s Aquatic Species Program started in 1978 where some of the research was first done. In 2006, the company was founded to continue that research and work with the Colorado State University (CSU) in Fort Collins. Solix CTO and co-founder Bryan Willson is a professor at CSU.
Solix says its bioreactors, which can automatically adjust according to sunlight and temperature, can yield more than five times the amount of fuel per acre of land per year than corn ethanol or soy-based biodiesel. The company also says it has the ability to capture emissions directly from power plants and factories.
Those qualities make the company sound a bit like GreenFuel Technologies, which uses 100-square-meter algae bioreactors and is building a $92 million algae farm in Spain that can produce 25,000 tons of algae biomass per year. GreenFuel has faced significant hurdles over the past few years as it works to get the cost of its technology low enough to be commercially viable, but it seems to have signed promising deals more recently. It could be a good lesson for Solix.
For a full list of algae startups check out our 15 Algae Startups Bringing Pond Scum to Fuel Tanks.