August 4, 2009

$10 million algae contest soon to launch

Algae-to-fuel technology research and development will literally become a race for a $10 million purse when the Algae Fuel Prize gets launched in the next few months. Matt Peak, director of technology ventures for Prize Capital LLC said the company is closing on sponsorships now. “We’re anticipating it will be launched before the end of the year.”

The draft outline of the contest calls for a $10 million award to the team that produces the most finished renewable diesel fuel per acre of land between Jan. 1, 2010, and Dec. 31, 2013, with a minimum of 3,000 net-gallons produced at a cost of no more than $3 per gallon. A champion racing prize series will be part of the challenge, with competitors racing in standard, uniform, sponsor-provided, diesel-powered cars at world-class raceways. Competitors will provide their cars with five days average fuel production (averaged from the preceding 12 months) from the equivalent of one acre of land. The competitor that travels the greatest distance while averaging a speed faster than 100 miles per hour wins $1 million, $2 million and $5 million in 2011, 2012 and 2013 respectively.

The draft rules of the contest are posted on the Prize Capital Web site, along with videos and documents describing the process followed in developing the contest parameters and the rationale behind holding the contest.

"The way our sponsorship opportunity is playing out, the competition is likely to be a California prize, encouraging companies in the pre-deployment or scale-up phases to set up shop and produce fuel within the state," Peak added. With 12 algae research centers and eight companies, San Diego is emerging as the capital of algae fuel advancement. Prize Capital cites studies showing algae research employs 272 scientists and others in San Diego. Adding jobs and spending related to service industries, the San Diego Association of Governments estimates algae is responsible for 513 jobs, $25.4 million in wages and $63.5 million economic output in the region. “California has the potential unlike no other region in the country (and perhaps the world) to create a vibrant industry around the research, development, deployment and production of algae fuel and technologies,” the contest promoter said. "Of course, all of this is subject to change until the sponsorship is finalized," Peak added.

Prize Capital was established by Lee Stein to tap into the tradition of prize competitions to stimulate innovation. The company was initially formed to design financial models to support the X Prize Foundation’s large prize competition. The X Prize Foundation has launched competitions such as a race to develop 100 mile-per-gallon vehicles and the Ansari X Prize. Burt Rutan and Paul Allen won the Ansari X Prize in 2004 for leading the team that built and launched SpaceShipOne. The space flight prize was modeled after the Orteig Prize won by Charles Lindbergh in 1927 for being the first to fly non-stop from New York to Paris.

Following that tradition of prize competitions to stimulate innovation, the algae-to-fuel competition is the first prize launched by Prize Capital. A small core team developed a preliminary design for the challenge with 20 algae experts participating in an April workshop to further refine the competition parameters. Once the sponsorship package is completed, Peak says there will be another round of public input on the contest design before the rules are finalized. “We view our prize competition as an integral part of bringing algae to commercialization,” Peak said.

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