Photobioreactors are the most widely researched method for developing biofuel from algae. A photobioreactor is a system in which nutrient rich water is pumped through transparent plastic tubes subjected to sunlight. This creates an ideal environment for algae and allow for very quick growth.
You can see an example of a photobioreactor in the video below.
This system might be the one most widely researched by companies at the moment, but it is also a more complicated method compared to simply growing and harvesting algae in open ponds. It is also a considerable more costly method than open farming. At this point you might wonder why so much research efforts are focused on this more complex and expensive method, when open water farming is cheaper and less complex and makes it possible to turn marginal lands such as deserts into productive land. This question is not easy to answer, but one reason is that a photobioreactor can be used to clean the exhaust from factories while creating energy – a sellable product. This could make it profitable for companies to manage their pollution levels in a whole new way. Another reason is the drawbacks discovered in other methods such as the disease problems that can decimate algal populations living in open ponds.
A problem in developing a good photobioreactor is that you need to match a design with an algae species that produces a lot of lipids (from which we get the oil) and is suitable for the area the photobioreactor is meant to be placed in. A photobioreactor suitable for one algae species is not necessarily optimal for another species. This is one of the reasons why some sceptics believe that this will never be a viable technology.