Algae Fuel and its implication on Thailand

 

But they are not alone. According to Greentechmedia.com, there are at least 57 companies around the world, including oil giants like BP and food major player like Unilever, have joined the parade of this new technology.

What then makes Thailand different from others? What will make Thailand able to compete with other countries in this energy bid? The answer is simple; cheap and well-developed resources.

At the moment, almost all the algae leading algae oil companies are situated in the developed countries, in particular the United States. It is simply because they are an expert in the field. The government was engaged in extensive research in algae oil from 1978-1998. The program was called Aquatic Species Program. Twelve years later, the work was reviewed by researchers all over the world. In National University of Singapore, Professor Tong Yen Wah is heading the research in production of algae oil in the tropical region. The know-how is not only limited to the United States. Thailand, however, is a little slow in the movement. This year, the Deparment of Alternative Energy funded Burapha University and Kasetsart University to research on algae oil. But it’s a start; We could be the next place to start the algae production.

What Thailand has to offer to many entrepreneurs is cheap and relatively educated labor force.  According to IMF, GDP per capita or the average income of a person in Thailand now stands at $8,643 a year as compared to $47,123 in the United States, $57,238 in Singapore and $14,865 in Malaysia. This is 5 times lesser than that in the United States and almost twice lesser than other possible candidate for investment, Malaysia. This offer a huge advantage in lowering the running cost if a company decide to invest in Thailand. Thailand cheap labour does not come without quality. The current data provided by United Nations indicates Thailand Education Index to be 0.888 as compared to 0.913 in Singapore, 0.968 in the United States and 0.851 in Malaysia. This education index takes into account of literacy rate, primary, secondary, and tertiary gross enrollment ratio. This is actually a good score, considering the labor cost. This educated and cheap labor force is the main reason why Thailand should be considered as an algae oil start-up.

The next aspect that makes Thailand more attractive than others is the cost of land and the water availability. Comparing to the United States, Thailand have much lesser land space, yet the cost of land in the outskirt of the towns still cost less here. For example, an empty land in Pra Bhutta Bat District, Saraburi, cost 22 thousand Baht per rai, whereas a plot of empty land at the outskirt of Minnesota cost around 33 thousand Baht per rai. In addition, the water source that the algae industry heavily relies on can we easily found in Thailand. In Chonburi District, where many energy industries are located, the average rainfall is 1378.1mm per year. With the humid condition, there is little to worry about insufficient water to supply the algae.

The fact that Thailand lies in the tropical area also makes it more attractive to algae entrepreneurs. Algae like any other plants need sunlight and optimal temperature. Sunlight is needed for photosynthesis which is important in the growth of algae. In this process, enzymes are used to break down raw materials and form the growing part of algae. Temperature is a very important limiting factor in this enzyme reaction. It has been estimated that a typical chemical reaction rate doubles with 10 degree increase in temperature. Generally, the enzymes have an optimal operating temperature around 30-40 degree Celsius. This range of temperature corresponds to the average temperature in industrial places like Chon Buri. The fact that the area along the Ao Thai has almost constant temperature makes it favorable for algae growth.

In every industry, electricity is needed in the processing. Electricity Generation Authority of Thailand has done a very good job in providing cheap and accessible electricity to the whole country. (Data of Thailand electricity distribution needed.) The price of electricity also comes into play. According to Thailand Board of Investment (BOI), cost of electricity for medium business is US$0.05 per kWh. This is in comparison to Malaysia’s US$0.07, United States’ US$9.28 and Singapore’s US$0.17 (Data taken from Power Engineering International).  Consider the large scale business with a huge power usage. This pricing will make a huge difference.

Not only the nature of the country is attractive to the investors, the government has also been providing aids and incentives for the start-up in renewable energies. According to BOI guide 2010, the alternative energy start-up will get import duty exemption on machinery, eight-year corporate income tax exemption, double deduction of transportation, electricity and water supply costs for ten year and 25% deduction of cost of installation or construction of facilities. With these incentives, the capital cost and running cost of the algae start-up could be minimized.

With all these benefits, what can the algae industry do in Thailand?

Firstly, the normal algae pond could be set up near the heavy industrial parks, so that the CO2 in the air is higher than normal, the condition that is favorable for algae growth. This algae pond could be set up in the area where agriculture is not favorable like swampy area, so that it does not hinder the food production in the country. One of such area is Amata industrial park, where the steel and automobile industry is located.

Secondly, algae can be employed to treat wastewater whether it is industrial waste water or sewage waste water. Algae have an ability to reabsorb almost 90% of heavy metal and nutrient in the wastewater. This would not only help to clean up the water and take back the useful nutrient, but also produce usable oil at the same time. A suggestion of this type of start-up is at Map Ta Put area where chemical industries are located.

Next, the micro scale energy production could be considered. The fact that algae have an ability to grow in many harsh conditions makes it easy for different places around Thailand to employ this technology. Furthermore, the availability of electricity and water supply is favorable to start algae oil production.  A research could be done to find the right strain to be grown on a given condition. In addition, a machine could be built to produce energy with little technical knowledge. The knowledge could provide many small scales producer to employ algae as a driver to sustainable development.

Lastly, algae could be utilized in many other industries to provide a sustainable development. The leading algae oil company like Solazyme is engaged in researches of using algae in cosmetic, chemicals, nutraceutical and nutritional industries. The application is endless as long as we have the right technology.

As we move from the fossil intensive world to a sustainable and renewable world, we should consider algae to be one of the top choices. Thailand, with its cheap and quality resources, could be the top in this energy bid. Tax and investment incentives have already been put into place. With technological transfer from overseas, Thailand could join the bandwagon of algae oil.

 

Note: Pongsak works for Sasin of Chulalongkorn University, Bangkok, while Thanasak is a student of National University of Singapore