Sapphire interview
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Rows of algae in test tubes
Sapphire Energy is that rarest of beasts – a clean energy startup that is going from strength to strength and is now on the verge of commercialization just fi ve years after it was launched. Creating Climate Wealth speaks to Tim Zenk about how the company has overcome barriers to development and brought its solution to market
T
he team behind Sapphire Energy has big ambitions. Launched just fi ve years ago, the San Diego-based fi rm has developed a method of producing ‘green crude’ from algae – a direct replacement for fossil-deposit-derived oil – and has set out on a mission to “change the world by developing a domestic, renewable source of energy that benefi ts the environment and hastens America’s energy independence.” Having raised over $100m in investment, Sapphire is
about to embark on building its first commercial-scale manufacturing plant in New Mexico. Vice president of corporate aff airs, Tim Zenk
says: “We were founded in 2007 and raised $100m within our fi rst year from the Gates family trust, which is called Cascade Investment, the Wellcome Trust in the UK, and ARCH Venture Partners. “We were then awarded a very prestigious grant and US government loan guarantee by the US Department of Energy and Department of Agriculture for $105m and are now building the fi rst integrated algal biorefi nery in the world in Columbus, New Mexico. “We’re breaking ground on 1 June and in addition
have built a very large research facility in Las Cruces, New Mexico, and hold the largest patent portfolio of any algae company – we control over 50% of the patents out there in algae, so we have quite a big play in the sector.”
The long haul Sapphire is storming towards commercial success, but Zenk admits it hasn’t been easy, with the energy sector a particularly diffi cult nut to crack. The team spent a year in secret before seeking its fi rst round of funding, looking up the patents that form the bedrock of its off ering. While Sapphire has made tremendous progress over just fi ve years, the timescales may still appear daunting to investors; but the energy sector is one where results can be slow to emerge. Zenk says: “Looking at energy production, there’s no question it takes years to develop these systems. However,
WWW.CARBONWARROOM.COM
Tim Zenk, VP of Sapphire, who own 50% of all algae patents
“You can’t just have good technology – you’ve got to have hardcore business people on the strategy side and people who can deal and protect your interests”
ISSUE 02. JUNE 2011
we’re at the point now where we’re building a plant at commercial demonstration scale. “And it’s faster than deepwater drilling, or oil shale or natural gas to liquid – both great examples of technologies taking about ten years from conception to commercialization.” Bringing new technologies to market in the energy arena requires “patient investment,” Zenk says, although Sapphire has been lucky in that it has managed suffi cient capitalization so far without requiring partnership with a commercial energy fi rm. Zenk says: “We’ve had a lot of interest from state energy companies, but so far none of them have been suitable partners – not that we won’t fi nd one, but at this stage in our growth we really don’t need one.
“It’s biology – it’s not necessarily chemical engineering, so it’s not an exact match. But when we complete our commercial demonstration, you
ONES TO WATCH
Other companies making strides in algae biofuel technology include • Algenol • Solazyme • Synthetic Genomics
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