A refugium must be large enough to function properly. That is, not just keep a bed of macroalgae alive, but also provide enough space to allow for continuous growth. Without continuous growth, nitrate and phosphate removal ceases. Worse, if an overgrown mass starts to die back, you could actually experience a decline in water quality.
So, how large should a refugium be? As much as you might love a simple answer to that question, there really isn’t one (not one that is correct, anyway!). The answer to this depends upon many factors, and every aquarium system is unique. How much nitrate/phosphate is produced per gallon per day in this system? Is the refugium lighting supporting maximal photosynthetic rates? What is the rate of water flow through the refugium? What type(s) of the macro are you using? How much/often do you harvest from the standing crop?
If you want to operate a refugium primarily for efficient nutrient removal, you’ll need to use chlorophytes (green algae), as they exhibit the fastest growth rates. Some aquarists might opt for Ulva instead of Chaetomorpha, as the former is far more useful as a live veggie food than the latter. But you’ll additionally have to consider flow rates; to get maximum nutrient removal, you’ll need to turn over the total refugium water volume per some amount of time, right? Chaetomorpha can physically withstand significantly higher flow rates than Ulva, for example; this means that you’ll need a bigger grow space for Ulva (that is, to get proper turnover rates through the refugium without super high flow rates).
A small amount of macro is unable to fully process a high concentration of dissolved nutrients regardless of the turnover rate. This means the bed will have to be of a minimal size--and actively growing. A good target for a refugium size can be around one third of the display volume. That would certainly be ideal, but it's okay to have a smaller refugium. Most aquariums have sumps that are barely one third of the display volume let alone refugiums. Generally, a 50 gallon aquarium might have a refugium that is about 5 gallons and a 100 gallon aquarium might have a 10 gallon refugium. You could add a refugium to your filtration with a whole separate aquarium, which is what some would refer to as a "real" refugium. However, you can make a portion in your sump a refugium too. Some would argue that isn't a real refugium, but who cares? Some hobbyists also argue that refugiums aren't needed at all. It all depends what you want to do with your aquarium. If you just want to grow macroalgae to keep nutrients down, then you can certainly do that in an average sized sump chamber. If you can get a large refugium, certainly go for it. The bigger the better, but small five gallon refugiums are good too, depending on the tank size.
Honestly, there is no refugium that is too big. And that’s the only thing we can say for certain. That’s why when we hear “how big” for refugia, we say “way big.” As in, as large as possible!
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