Joule adds another $40M, but its clean biofuels promise still lags

Joule senior research associate Mike DeNoia works in the company's lab in Bedford (Photo by Kyle Alspach)
Joule senior research associate Mike DeNoia works in the company's lab in Bedford (Photo by Kyle Alspach)

Joule Unlimited is one of those clean-energy companies that sounds like it’s on the verge of changing the world: its genetically engineered bacteria can produce ethanol or diesel from nothing more than sunlight, water, and carbon dioxide.

Getting that idea from lab experiment to full-scale factory, however, has not been easy.

Bedford, MA-based Joule has raised some $200 million in private investment since the company was founded in 2007, including a new round of $40 million disclosed Monday led by its primary financial backer, Cambridge-based Flagship Ventures.

It’s sealed a partnership deal with Audi, which has tested Joule’s fuels for possible use in cleaner-burning cars.

But Joule also has repeatedly misfired with lofty predictions of how soon it will be able to produce its fuels on a commercial scale.

The secretive startup once said it planned to sell its biofuels sometime in 2012. In early 2014, Joule said it was still “poised” to make the leap from demonstration to sales. Today, Joule says it could begin building a 1,000-acre commercial-scale plant sometime in 2017. The company is also on its fourth CEO.

Tom Jensen, an executive vice president, said Joule has made significant progress in the past year, fine-tuning both its fuel-producing microorganisms and the production equipment that could eventually be expanded to a full-size factory capable of producing 15 milllion gallons of ethanol or 25 million gallons of diesel per year.

“The kind of production levels we see in an indoor environment is getting close to what we believe we need in the first commercial plant,” Jensen said. “We’re not at those thresholds yet. But we have visibility to what we need for the first commercial plant.”

Joule has been testing its plant designs at a demonstration facility in a sparsely populated part of New Mexico, where it has access to plenty of land and sunlight. Wastewater loaded with Joule’s genetically engineered is pumped through a series of clear plastic tubes, which are laid out in long rows under intense sun.

Carbon dioxide is pumped into the tubes, giving the microorganisms the final ingredient needed to conduct their modified form of photosynthesis. The fuels, whih are produced as a byproduct, are excreted by the bacteria and harvested out of the tubing.

Audi, Joule’s partner at the facility, reports that the first ethanol was produced at the facility in early 2013 and was tested at Audi labs in 2014.

Reloading with another significant investment will help Joule expand its work. But the company will continue to face skepticism until it can finally produce enough biofuel to hit those commercial targets.

In a research note published in late March, Boston-based Lux Research noted that Joule had missed earlier expansion targets and is behind competitors who are developing similar technologies that produce renewable fuels from algae.

“While the company made significant progress in 2014, the reality is that it is behind its algae counterparts in an already delayed space,” analyst Yuan-Sheng Yu wrote. With Joule’s commercial factory delayed, Yu wrote, people should “remain cautious of Joule’s process.”