Assessment of the Technological Development and Economic Potential of Photobioreactors

FCN Working Paper No. 8/2009

41 Pages Posted: 4 Jun 2010

See all articles by Timm Holtermann

Timm Holtermann

RWTH Aachen University

Reinhard Madlener

RWTH Aachen University

Date Written: November 1, 2009


In this paper, we investigate the technological development and economic potential of the photobioreactor (PBR) technology for energy purposes, i.e. production of hydrogen or biofuels. The approach adopted is to consider the technology, its expected costs and revenues, and related risks from an investor perspective. To this end we develop an investment model that is used to calculate the economic feasibility of PBRs for different scenarios, including a best-case scenario, with plenty of sunlight and water, inexpensive nutrients, high prices for hydrogen and biomass, and low other costs. The best-case scenario is compared to a scenario with less favorable boundary conditions. We find that PBR efficiencies will likely be less than 10%, with typical values between 1.8-5.6%. We also find that hydrogen production costs would be lower than those for biodiesel or biogas from solid biomass produced in PBRs. Compared to biofuels from traditional agriculture there is a great advantage for the PBR technology if land is scarce, because land is used more efficiently. Since PBRs can be designed as a closed system they can be applied in very dry regions. In the long term this might enable this promising concept to penetrate the energy supply market.

Keywords: Photosynthesis, Economics, Technology, Analysis, Algae, Bioenergy, Hydrogen, Market Forecast, Land Use

Suggested Citation

Holtermann, Timm and Madlener, Reinhard, Assessment of the Technological Development and Economic Potential of Photobioreactors (November 1, 2009). FCN Working Paper No. 8/2009. Available at SSRN: or

Timm Holtermann

RWTH Aachen University ( email )

Templergraben 55
52056 Aachen, 52056

Reinhard Madlener (Contact Author)

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustra├če 10
Aachen, 52074
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)


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