The potential of microalgae as feedstock for methane production is evaluated from a process technical and economic point of view. Production of mixed culture algae in raceway ponds on non-agricultural sites, such as landfills, was identified as a preferred approach. The potential of straightforward bio-methanation, which includes pre-concentration of microalgae and utilization of a high rate anaerobic reactor was examined based on the premises of achievable up-concentration from 0.2-0.6 kg m(-3) to 20-60 kg dry matter (DM) m(-3) and an effective bio-methanation of the concentrate at a loading rate of 20 kg DM m(-3) d(-1). The costs of biomass available for bio-methanation under such conditions were calculated to be in the range of (sic)86- (sic)124 ton(-1) DM. The levelized cost of energy by means of the process line "algae biomass - biogas - total energy module" would be in the order of (sic)0.170-0.087 kWh(-1), taking into account a carbon credit of about (sic)30 ton(-1) CO(2)(eq). (C) 2010 Elsevier Ltd. All rights reserved.