While renewable energy sources such as solar, wind and geothermal have reached commercialized levels of development, algae is still very much under development. But recent news suggests that all of this is about to change in a major way, putting algae on the fast-track to sustainable growth. Will you and your business be ready?

Even in the noble world of sustainability, money talks. And nowhere is this more prevalent in a recent story that appeared in Money, of all places. In a nutshell, the magazine is reporting that the global algae biofuel market is heating up big time, with some major players in the financial services industry lining up to back significant projects. Here’s more from Money:

Last week U.S. company PetroAlgae, which to date boasts a two hectare algal oil demonstration plant, announced it was moving from an over-the-counter traded stock to an initial public offering (IPO) of US$200m in listed shares. The issue is underwritten by Goldman Sachs, UBS and Citigroup, among others. The IPO follows a secondary issue by existing US algal oil company Solazyme of US$52m which brought aboard Morgan Stanley as a new investor.

So what has these iconic investors all fired up? A few things. First, the promise of algae biofuel process itself which offers two highly sought after benefits; the capture and conversion of carbon dioxide to offset  polluting and the production of other products like low emissions biodiesel and fertilizers. And given the Gulf oil spill crisis, now is an opportune “incentive to monetize the zeitgeist,” as the Money article suggests.

But like the development of any new venture, there are risks involved and algae is definitely not immune. For one, the most popular method to grow algae depends on the “pond method” which involves growing algae in mostly open pond systems. This method involves concentrating sunlight to speed growth but also depends on carbon dioxide input from the atmosphere. Here’s why that can be a problem, according to Money:

The scalability of algae pond systems is nevertheless also dependent upon expanded land usage. And open ponds are exposed to evaporation, storms and foreign bodies and require significant water usage – a scarce and potentially expensive resource.

But here is how the aforementioned Algae.Tec is out re-invent the pond method:

What sets Algae.Tec’s technology apart is that it exploits a patented system of algae growth not within ponds but within converted shipping containers. Scalability thus becomes modular, and land requirement is reduced by the ability to stack those modules. The closed modules are not exposed to the same problems as open ponds. And, most importantly, the modules are readily transportable.

Think that’s the extent of the positive momentum for algae? Think again. There’s plenty of more positive algae news developing, one of the most significant coming from the Arizona Republic. The paper is reporting that “Arizona researchers are developing algae as a promising 21st-century alternative fuel to power cars, trucks and planes and propel the state’s economy into the future” and that “Arizona is poised to become a major center of a multibillion-dollar, algae-based, biofuel industry.”

Some bold claims, for sure. But here’s how they are backing those claims:

Scientists at Arizona State University’s Polytechnic campus say major innovations in research in recent years have put them on the brink of boosting production capabilities from thousands of gallons to millions – the difference between powering a few vehicles and fueling millions of cars and fleets of airliners. ASU researchers say they are three to five years from large-scale production, a breakthrough that could eventually reduce U.S. dependence on foreign oil.

So what do you think? Is algae poised for alternative energy superstardom? Or is this simply a quick cash grab for savvy investors?

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