This report presents an integrated energy system that combines the production of substitute natural gas through coal hydrogasification with an algae process for beneficial carbon dioxide (CO2) use and biofuel production (funded under Department of Energy (DOE) contract DE-FE0001099). The project planned to develop, test, operate and evaluate a 2 ton-per-day coal hydrogasification plant and 25-acre algae farm at the Arizona Public Service (APS) 1000 Megawatt (MW) Cholla coal-fired power plant in Joseph City, Arizona. Conceptual design of the integrated system was undertaken with APS partners Air Liquide (AL) and Parsons. The process engineering was separated into five major areas: flue gas preparation and CO2 delivery, algae farming, water management, hydrogasification, and biofuel production. The process flow diagrams, energy and material balances, and preliminary major equipment needs for each major area were prepared to reflect integrated process considerations and site infrastructure design basis. The total project also included research and development on a bench-scale hydrogasifier, one-dimensional (1-D) kinetic-model simulation, extensive algae stressing, oil extraction, lipid analysis and a half-acre algae farm demonstration at APS?s Redhawk testing facility. During the project, a two-acre algae testing facility with a half-acre algae cultivation area was built at the APS Redhawk 1000 MW natural gas combined cycle power plant located 55 miles west of Phoenix. The test site integrated flue gas delivery, CO2 capture and distribution, algae cultivation, algae nursery, algae harvesting, dewatering and onsite storage as well as water treatment. The site environmental, engineering, and biological parameters for the cultivators were monitored remotely. Direct biodiesel production from biomass through an acid-catalyzed transesterification reaction and a supercritical methanol transesterification reaction were evaluated. The highest oil-to-biodiesel conversion of 79.9% was achieved with a stressed algae sample containing 40% algae oil. The effort concluded that producing biodiesel directly from the algae biomass could be an efficient, cost-effective and readily scalable way to produce biodiesel by eliminating the oil extraction process.