Microalgae are small organisms that live in water and use solar energy or artificial light to grow. They are emerging to be one of the most promising long-term, sustainable sources of biomass for fuel, food, feed, and other high valuable co-products. Like any other plant, algae, when grown using sunlight consume carbon dioxide (CO2) and release oxygen (O2), but with a 5 to 10 times faster growth rate than conventional food crops. Thus, algae-based CO2 conversion is considered as a cost-effective option for CO2 capture and the mitigation of greenhouse gas emissions (GHG). Since the last decade, there have been repeated attempts to bring microalgae bioenergy and biomaterial production to an industrial level. So far, despite the enthusiastic boost towards commercialisation, the production of microalgae has been demonstrated mainly at pilot scale levels, and only a few large-scale facilities exist and produce microalgae today. There are several issues related to microalgae cultivation from either the energetic, environmental or economical point of view. Further developments are needed for algal biomass technologies to improve their cost-competitiveness and their environmental sustainability. The major bottlenecks are mainly linked to water and nutrient supply, the high energy consumption of algal processing, the high surface area requirements for cultures, and finally, the relatively low solar conversion efficiency of microalgae in highly sunny regions. Therefore, to design economically feasible algae production processes, it is necessary to close the nutrient cycle, to reach the energy balance, and to opt for a biorefinery concept where products can be valorised. This doctoral thesis aims to explore a new concept, PAWaSto, which attempts to overcome the limitations of microalgae production processes by combining different technologies to increase the energy and nutrient recoveries within the system. An urban environment was considered in the PAWaSto vision. This work focuses on four different research approaches which can be summarised as follows: (1) As low-cost water and nutrient supply source is critical to the success of microalgae production, a unique on-site sanitation system for nutrient and water recoveries (household effluents) was studied in this thesis. (2) Energy and nutrient recycling: The integration of a hydrothermal process (HT) for a fast conversion of household effluents to concentrated nutrient-rich effluents, free of pathogens, suitable for algae production was proposed. Besides, the produced energy-rich gas obtained from the HT is considered for electricity generation through a solid oxide fuel cell (SOFC). (3) The implementation of semi-transparent dye sensitised solar systems (DSCs) on the illuminated surface of an algae photobioreactor, and their effect on the algal biomass productivity was studied for the first time in this thesis. (4) Finally, for the economic viability of algal biomass production, the extraction of high-value products from wet algal biomass using green solvent was proposed, and the residual biomass generated from the extraction step was further treated through a HT process. Overall this doctoral research project studied key aspects for the integration of a biorefinery concept in urban areas contributing to the big vision of closing the materials cycles on the level of districts. A focus was put on an integrated system for efficient microalgae production, power generation, and closing the nutrient cycle.