Why biodiesel algae is not cost effective?

Photosynthetic algae need carbon dioxide, water and light in order to grow (in addition to various other nutrients like iron and nitrogen). If you grow algae in open pools (as is often done when growing algae for nutritional supplements) then a lot of water is lost due to evaporation, raising water costs substantially. Moreover, it’s best to grow them in shallower pools so that more of the algae have direct access to sunlight most of the time. However, this increases the surface area of the pool (relative to its volume) and further increases evaporation loss. If you use a deeper pool to avoid evaporation, then you need mix the pool to ensure that all the algae see daylight, which raises electricity costs substantially.

As a result of these problems, many companies are now trying to grow algae for biofuels in transparent, closed containers like plastic bags or tubes.

Using a closed system means that you need to inject CO2 into the system (usually with a powered bubbling mechanism) and you need to work in small enough volumes that sunlight penetrates most of the container. This adds a lot of logistic complication to the process as you need to manage many, relatively small growth chambers. Moreover, even in sealed containers you still need to have strong enough mixing (usually from the bubbling mechanism) that most of the algae see light. In other words: relatively high logistical and electricity costs. You also want to work near an abundant source of concentrated CO2 (i.e. power plant) which can limit flexibility in planning algal biofuel “farms.”

Another biological limitation on algal growth is that most microalgae only produce triaglycerols in quantity when stressed in some fashion (usually nutrient deprivation, see first citation). This can make growing algae for fuel much trickier than growing them for products like carotenoids, which they produce in quantity regardless and which fetch a much higher market price.

More over the harvesting of algae and preparing of biofuels from them is very energy and time-intensive as well. That is why there is currently intense research into harvesting lipids from wet algae (rather than drying them) and into making better transesterification processes (for converting lipids from the algae into decent fuels).

Taken together, these factors mean that there are rather high costs associated with algae growth. Since fuel prices are still relatively low, it’s much more cost effective to grow algae for higher price products like nutritional supplements and cosmetics which command 10-100x higher prices per mass or volume unit. So, basically, the low cost of fossil fuel is what’s preventing algal biofuel from being cost effective.