Biofuel analysis conducted at the Energy Biosciences Institute in Berkeley predicts that there is still a significant way to go before algae can become a viable source for energy.
Following
biofuel analysis on both technological and economic criteria, the report suggests that algae is in an "early gestation stage" as a power source for renewable production.
However, some progress is seen, as small-scale companies developing technology to process the biomass in some areas have shown signs of expansion.
Study authors Nigel Quinn and Tryg Lundquist of Lawrence Berkeley National Laboratory write: "Even with relatively favourable and forward-looking process assumptions ... algae oil production with microalgae cultures will be expensive and, at least in the near-to-mid-term, will require additional income streams to be economically viable."
These additional income streams may not be difficult to find though, as the researchers point out a number of non-fuel uses for algae that could help to bolster revenues.
According to the Lawrence Berkeley National Laboratory, 11 of its scientists have won the Nobel Prize in previous years, making its name synonymous with "excellence".