The overall aim of the research was to investigate the hydraulic mixing characteristics and energy efficiency of raceway systems for the large-scale cultivation of micro-algae. For this purpose, two pilot-scale raceway reactors (100 m length x 1 m wide channel), each with a paddlewheel for liquid circulation and a sump for gas exchange, were built and tested under different conditions. The optimal depth to run the raceway was 0.20 m. At this depth, a typical velocity for liquid circulation in raceways of 0.20 m s-1 was obtained with a power consumption of 2.10 W m-3, which was reduced to 1.6 W m-3 by using one baffle in the bend. At this velocity, addition of two and three baffles did not influence the power consumption significantly. The study of mixing as indicated by the Bodenstein number showed that mixing took place mainly in the paddlewheel, sump and bends although the overall behaviour of the system was plug flow since most of the liquid was contained in the channels. A study with and without a sump baffle showed that the maximum velocity achieved when it was in place was 37 % lower than without the baffle, while at the same time the power consumption increased by 79 %. In addition, its presence reduced mixing, while the improvement in mass transfer was very low. For all these reasons, a sump baffle with the studied configuration was not recommended unless its hydrodynamic performance can be significantly improved. The selection of a membrane plate diffuser giving a small bubble size and low pressure drop enhanced mass transfer efficiency. Oxygen was desorbed mainly in the sump and paddlewheel due to high turbulence which increased the mass transfer coefficient. Peaks in dissolved oxygen at midday, however, were identified as a major problem causing growth inhibition. Accumulation of oxygen in the culture can be reduced by gas bubbling in the sump, although in cultures with a high concentration of bicarbonates CO2 stripping may occur. CO2 mass transfers above 96 % were achieved in the raceway, highlighting the efficiency of the sump as a device for gas exchange. The use of flue gas was effective to control pH, provide carbon to the culture and reduce dissolved oxygen peaks. A carbon balance showed that outgassing in the raceway was almost negligible and main carbon loss was through the liquid phase in the harvesting process. Use of a hydrostatic pressure wheel for lifting water increased the hydraulic efficiency of the raceway between 15-20 %. The paddlewheel equipped with shoe used around 40-50 % of the energy required by flat configuration. This corresponds to an improvement of 2-5 times existing efficiencies, with higher values occurring at longer simulated channel lengths where the hydrostatic head losses are greater. This efficiency, however, is still well below theoretical values, and there is scope for further optimization the improved paddlewheel design for specific raceways.