GGRN is currently developing an innovative biomass-to-energy technology called Greensteam: a commercial-stage, high efficiency combustion system that generates industrial steam and electrical power from waste biomass.
Doug Frater is President and CEO of Global Green Solutions and established the company’s start-up in the clean-tech sector. He has over 35 years of experience in the energy industry, primarily in process automation and control technology. Prior to joining Global Green Solutions, he was a managing partner with Sigma Consult, where he was responsible for sales, marketing and business development, providing services to new technology and solution companies in the renewable energy markets. He also worked for Honeywell International Industrial Controls Division and following resident business assignments in the Middle East, Asia and Europe, held the positions of sales vice president, Europe, Middle East and Africa and global director, oil and gas business.
Interview date: August, 2010
Interviewer: Toby Price
So Doug, perhaps you could kick off by explaining how and why your company started developing green solutions?
A group of investors in the USA and Canada who were previously successful in the oil and gas and mining markets decided to fund a start-up clean-tech company which resulted in the formation of Global Green Solutions Inc (GGRN).
Could you give us a quick explanation of the advantages of Greensteam and who your target market is for this solution?
The Greensteam technology was developed in-house by GGRN to meet the high biomass-to-steam energy conversion efficiency economics required for the Aera project, (a heavy oil recovery partnership between Exxon Mobil and Shell Bakersfield operations) and the low air emissions regulatory requirements of the California Air Emissions authority. Greensteam’s target market is for 10-50 MWe (electrical equivalent) industrial and commercial heat or combined heat and power (CHP) applications.
What is your experience so far with Greensteam? Has it been well received?
The first Greensteam Project was contracted with Aera Energy LLC which is owned by affiliates of Shell and ExxonMobil and is one of California’s largest oil and gas producers. Aera currently operates natural gas-fired steam generators in its enhanced oil recovery operations and intends to replace a minimum of 15 of its current gas-fired steam generators with 10 Greensteam waste biomass-fired steam generators for two key reasons: 1) to reduce its steam generation operating costs and 2) to decrease its greenhouse gas emissions footprint.
Global Greensteam LLC and Aera entered into a contract for the long-term purchase of all steam generated from full-scale Greensteam units installed at the Aera site. The agreement also stipulates a steam pricing formula correlated to the price of natural gas, benefiting Greensteam when the natural gas price increases.
Global Greensteam LLC has received significant financial support from Aera Energy LLC, enabling it to construct its first Greensteam system: an $8 million demonstration unit which will test the performance of the Greensteam process including emissions testing to secure the air quality permits required for the full-scale project. In return, Aera will receive discounts on the full project steam offtake price and a share in the carbon credits generated from the reduced emission footprint.
Construction of the 1.25 MWe equivalent generation capacity demonstration unit was completed in June 2010 and is currently in the commissioning stage, with testing to continue until December 2010. On successful completion and acceptance of the demonstration unit testing and Aera’s decision to proceed, Greensteam will finalise project financing and commence construction of the 10 full-scale commercial projects staged over a 30-month period.
Until recently, your company was involved in Green Algae: a development-stage, closed loop-continuous-process, algae photobioreactor growing system that produces algae biomass from which oil can be extracted as a biofuels feedstock. However, you have taken the decision to shelve this project. Why?
Following the global financial market crisis resulting in a significant reduction in investor-based funding opportunities, GGRN took the decision to concentrate all its resources and funding in Greensteam, as it was in final development and at an early stage of commercialisation. Global Green’s Algae Program was still only at an early R&D stage and to continue further required significant funding and a third party technology partner to enable the development of an economical and sustainable biofuels solution.
The airline industry is now involved in biofuels research and Continental and Japan Airlines have already performed test flights using algae-based biofuels. Do you believe it is viable for the airline industry to depend on biofuels to reduce its emissions?
Algae-based technologies are probably the main candidates for producing biofuels feedstock for jet fuel applications due to the high yield, quality control and sustainability parameters they offer. The challenge is in the production cost economics for these technologies. It is unlikely that first and second generation algae cultivation and processing technologies will ever deliver the economics required for large-scale biofuels applications. For this reason, advanced second generation and third generation economic, game-changing, enabling technologies currently under development are likely to be viable solutions.
Do you consider that algae-based biofuel be sustainably produced in sufficient amounts to have a noteworthy impact on the energy mix? Are the land and water footprints of algae farming not prohibitive?
Algae-based biofuels produced in closed-loop, continuous-process, industrial scale biofuels refineries, utilising the technologies previously discussed require much reduced land footprints over that of traditional open-pond technologies. Furthermore, water used in the algae cultivation process will be recovered.
Has the Stimulus Package in the US been kind to biomass and biofuels?
The US Stimulus Packages and the significant funding budgeted by Exxon-Mobil in third generation algae technology development has certainly caused a second wave of “algae.com” in the US. Whether the US Stimulus funding delivers a real return on investment in the form of economical and sustainable technologies, or is just a political marketing exercise resulting in a large number of academic and institutional entities and private and public companies all trying to achieve the same objectives with a un-coordinated use of funds and minimum knowledge sharing remains to be seen.
Unlike Europe and the UK in support of the 2020 legislated targets, the US situation regarding agricultural, wood based biomass and municipal waste combined heat and power (CHP) technology and project development is not receiving the same federal level interest or stimulus and is more at an individual state and local level of development. California, where the Greensteam Aera project has been developed, is one of the leading US states supporting biomass project development under its AB 32 legislation.
I notice you have operations in South Africa. What is the status of the renewables market and your ops there?
Our operations in South Africa remain in the form of a business development activity. When we first identified South Africa as a potential market in 2008 it was because of its ideal solar climate for algae-based cultivation technologies and it being a global leader in the production of pulp and paper from its own forests and those of adjoining countries. It therefore represents a biomass-to-energy technology opportunity.
South Africa also suggested early indications of political alignment towards climate change and biofuels policy with legislative targets supported by a biofuels and renewable energy tariff structure. Unfortunately, as of today these have not progressed into a business opportunity where the risks and return on investment are justifiable. A number of European countries, USA states and Canadian provinces offer a much larger opportunity with lower business risk and a higher return on investment.
Finally, what are Global Green Solutions’ plans moving towards 2011?
The successful completion of Greensteam R&D and the Aera demonstration project in 2010 will lead to the commencement of the construction of ten Aera Greensteam units in early 2011, and commercialisation stage status for GGRN. There are also a number of Greensteam opportunities in the project development phase in the UK and Europe, which we expect will be commissioned in the future. We are also pursuing a business model in which we license the technology and build, own and operate projects with international, national or local strategic partners. With the competitive advantages of the Greensteam biomass-to-energy technology and its commercialisation stage availability, we plan to formally engage with one or more of the potential strategic partners that we are currently in discussions with.
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