What’s in a number?
Now, what does 500,000 L really mean? I’ve read some pretty spectacular calculations since the announcement was made from people trying to determine how much oil the company could produce per run. Unfortunately, the numbers are pretty useless. Why? Investors won’t know the process metrics (things like yield, efficiency, on-stream factors, and so on) for Solazyme’s heterotrophic algae platform anytime soon, if ever.
The following simplified engineering principles should help investors realize just how little is actually known.
Bioreactors operate at working volume, which is usually 80% of tank volume. That’s because the tank needs empty space for fermentation broth (an annoying byproduct), air, and a safeguard against interns who add too much of anything. That immediately sets the maximum production level of a 500,000 L tank to 400,000 L of product — and we haven’t even begun fermentation. Next, knowing that the company’s algae contains 80% oil further lowers the bar to just 320,000 L of maximum product per run.
The 320,000 L figure will be reduced further by fermentation yield (the tank contains more than just crowded algae cells), instrument displacement (agitator blades, temperature probes, and internal piping take up room, too!), success factor (inevitably, some runs do not meet the standard and must be thrown out), and downstream efficiency (separation loss, refining loss, and the like). Nonetheless, we can deduce that less than 64% of total tank volume will actually go to product for the company.
That may sound depressing at first, but all sustainable chemical companies will face similar constraints. In fact, biopharmaceutical manufacturing platforms can often have total product yields well below 50% because of strict purity guidelines. I just want to help investors understand the ins and outs, no matter how big or small, of the companies they own.
The fact remains that Solazyme is in rarefied air at 500,000 L.
Foolish bottom line
I admit that I don’t have all of the answers, but I do want to help the world invest better. I hope what I’ve shown you illustrates why it’s dangerous to read too much into speculations and gives a brief inside glimpse into the engineering aspects facing the industry. The “coolness” of a technology means little in terms of financial opportunity: I still want investors to acknowledge the risks that lie ahead.
Nevertheless, I remain cautiously optimistic that Solazyme will successfully reach the 750,000 L fermenters needed to meet economic production of its renewable oils. The potential markets are huge, and the message it would send to the world would be profound. Solazyme’s great relationship with its partners and track record for hitting milestones on time should comfort investors as well. Do you think Solazyme can grow into the disruptive game-changer it has set out to be? Let me know in the comments section below.
The article What Does Solazyme’s 500,000-Liter Fermenter Really Mean? originally appeared on Fool.com and is written by Maxx Chatsko.
Fool contributor Maxx Chatsko owns shares of Codexis. Check out his personal portfolio or follow him on Twitter, @BlacknGoldFool, to keep up with his writing on energy, bioprocessing, and emerging technologies.The Motley Fool owns shares of Solazyme.
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