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Here's a detailed and useful post on the problems and stand in the way of algae becoming the dominant biofuel feedstock.
While I'd say that the author has looked only at one aspect of algae energy (the biodiesel part), and not much from the algae ethanol or algae to hydrocarbons using the thermochemical routes, the post is still very useful because for the scope that the post has limited itself, it does a commendable job of pointing out the key issues - need for an even and effective light distribution, need to overcome the problems of agitation of medium that curtail algae growth and the need to make the cracking of the tough algae walls easier in order to extract oil.
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