Oxygen is produced as a by-product of photosynthesis when the water absorbed by plants is "split".
It is one of the most important reactions on the planet because it is the source of nearly all of the world's oxygen.
Researchers used natural sunlight to convert water into hydrogen and oxygen using a mixture of biological components and manmade technologies.
Academics at the Reisner Laboratory in Cambridge's Department of Chemistry developed the new technique of solar-driven water-splitting.
Their method also managed to absorb more solar light than natural photosynthesis, according to the paper published in Nature Energy.
"Natural photosynthesis is not efficient because it has evolved merely to survive so it makes the bare minimum amount of energy needed – around one to two per cent of what it could potentially convert and store," said Katarzyna Sokół, first author and PhD student at St John's College.
Artificial photosynthesis has been around for decades but it has not yet been successfully used to create renewable energy.
This is because it relies on the use of catalysts, which are often expensive and toxic.
Dr Erwin Reisner, Head of the Reisner Laboratory, a Fellow of St John's College, University of Cambridge, and one of the paper's authors, described the research as a 'milestone'.
"This work overcomes many difficult challenges associated with the integration of biological and organic components into inorganic materials for the assembly of semi-artificial devices and opens up a toolbox for developing future systems for solar energy conversion," he said.
Researchers not only improved on the amount of energy produced and stored, they managed to reactivate a process in the algae that has been dormant for millennia.
"Hydrogenase is an enzyme present in algae that is capable of reducing protons into hydrogen," said Ms Sokół.
"During evolution, this process has been deactivated because it wasn't necessary for survival but we successfully managed to bypass the inactivity to achieve the reaction we wanted – splitting water into hydrogen and oxygen," she said.
Ms Sokół hopes the findings will enable new innovative model systems for solar energy conversion to be developed.
"It's exciting that we can selectively choose the processes we want, and achieve the reaction we want which is inaccessible in nature.
"The approach could be used to couple other reactions together to see what can be done, learn from these reactions and then build synthetic, more robust pieces of solar energy technology."
