Exactly: these algae produce energy from the sun. This process is just a very complex solar panel, of which coffee grounds are one of the costs, not the source of energy.

The process would make sense if you could produce something with high added value, like nutritious food. If you produce something that you're literally burning away by the gallon in cars, it makes no sense. Just build solar panels instead, and turn the coffee grounds into compost, or even burn them for energy directly (which can already displace a lot of fossil fuel use).