So if algae fuel is so great, why isn't it out in the market? Well, the main reason that it all leads back to is money. Although algae fuel has been in R&D for over 50 years, many of the programs have been shut down. The ones still operating have low funding and aren't supported by the government unlike corn ethanol. According to some reports, algae fuel currently would cost from $10.66-19.89 per gallon which is not even close to competing with ethanol or fossil fuel. Currently, the main costs holding back algae fuel are capital costs and the extracting of oil from algae. Part of the costs of capital would be infrastructure but the main capital cost is photobioreactors. Photobioreactors are closed chamber systems to grow algae at optimal conditions instead of using open waters. The following chart shows just how expensive photobioreactors make algae fuel.
Use of photobioreactors causes price of algae fuel to almost double compared to use of open ponds. In open pond systems, algae fuel would cost about $10.66/gallon but using photobioreactors raises prices up to $19.89/gallon. Note that the majority of the cost associated with algae fuel is capital.
http://www.consumerenergyreport.com/wp-content/uploads/2012/05/Current-Algal-Fuel-Costs.png
http://fitsnews.files.wordpress.com/2007/12/algae-fuel.jpg
To read more about the costs of algae fuel:
http://www.consumerenergyreport.com/2012/05/07/current-and-projected-costs-for-biofuels-from-algae-and-pyrolysis/
http://alternativefuels.about.com/od/researchdevelopment/a/Costs-Can-Hinder-Algae-Development.htm
http://www.triplepundit.com/2012/04/algae-based-biofuel-pros-cons/
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