Algae grown in outdoor reactors (volume: 10 L and depth: 20 cm) were fed directly with filtered and sterilised municipal wastewater. The nutrient removal efficiencies were 86%, 90%, 89%, 70% and 76% for TOC, TN, NH4-N, TP and OP, respectively, and lipid content varied from 18% to 28.5% of dry algal biomass. Biomass productivity of similar to 122 mg/l/d (surface productivity 24.4 g/m(2)/d) and lipid productivity of similar to 32 mg/l/d were recorded. Gas chromatography and mass spectrometry (GC-MS) analyses of the fatty acid methyl esters (FAME) showed a higher content of desirable fatty acids (bearing biofuel properties) with major contributions from saturates such as palmitic acid [C16:0; similar to 40%] and stearic acid [C18:0; similar to 34%], followed by unsaturates such as oleic acid [C18:1(9); similar to 10%] and linoleic acid [C18:2(9,12); similar to 5%]. The decomposition of algal biomass and reactor residues with an exothermic heat content of 123.4 J/g provides the scope for further energy derivation. (C) 2014 Elsevier Ltd. All rights reserved.