simple explanation… brainy dudes have worked out how to harvest the algae off ponds etc, and from this get plant oils.
These oils are the same as the oil used to cook your chips, and therefore can be made into biofuels such as biodiesel, which can be used in both vehicles and electric generator sets.
at the moment the issue is keeping the yields up and the costs down; also producing algae requires abundant sunlight so some countries can obviously do this better than others.
You can even try the same experiment yourself
An Algae Bioreactor from Recycled Water Bottles
