At the most basic level a refugium is a ‘safe place’. This means safe from things in the main display. It usually refers to a macroalgae refugium specifically, in which case the macroalgae is safe from algivores and herbivores in the display. It can also be a safe place for fish (small, delicate fish, new fish, fish that are getting picked on, etc.) or even a safe place to keep something that would otherwise be destructive in the display (for example: mantis shrimp, damsel, large hermit, reef lobster, etc.).
Refugiums don’t have to be in a sump, but that is almost always the best option for them. They can also be hang-on-back (HOB). There are manufactured HOB refugiums, HOB refugium/skimmer combos, and some people even turn AquaClear 110s in to HOB refugiums. A sump is the best option because it usually allows for a MUCH larger refugium.
Some people refer to any sump that has a refugium as a refugium, but this is inaccurate. The sump itself isn’t a refugium, just that particular section of the sump (this gets confusing when one person uses the word refugium to mean sump and someone else is just thinking refugium).
When most people talk about a refugium they are talking about a macroalgae refugium. In this case the refugium simply houses the macroalgae with bright lights. This allows the macroalgae to grow very well. By doing so it removes many of the nutrients that would otherwise cause algae problems in the display. A very effective refugium can keep nitrate and phosphate down to undetectable levels (although so can a major algae problem). The best macroalgae is Chaetomorpha or chaeto (pronounced key-toe, not chee-toe or kay-toe). It is a fast grower but doesn’t go sexual like Caulerpa spp. (which can cause a tank to crash). Simply put in a portion and let it grow. When it fills the refugium cut in half and toss out (or better yet, sell) the extra. It is also a great size for pods to inhabit.
Lighting a refugium is pretty straight forward: you want lots of light and you want it in the color best for photosynthesis. This means the color is usually in the 3,500-6,500K range. The light itself can be a typical aquarium light that fits your refugium, not the whole sump. You don’t want to be growing algae in the sump outside the refugium. This is why I recommend black glass baffles in sumps that will have a refugium, it keeps the light from growing algae in other section of the sump. If it is an aquarium light just make sure you use the right colored bulbs. You can also use shop lights from the hardware store. Most home lighting is in the ideal range for plants. The best options will be either LED or compact fluorescents that have a built in reflector in the bulb (flood lights). These are great at directing as much light as possible in to the refugium. You can use hardware store clamp-on shop lights to mount the lights (but try not to use their reflectors as reflectors, they aren’t very good). The lights can stay on all the time with chaeto. Some people like to have them on a schedule opposite to that of the display lights to minimize pH swings caused by photosynthesis and its impact on CO2, but this really should not be an issue (I can’t think of a tank where it was) and you definitely want the refugium sucking out as many nutrients as possible.
Some people keep refugiums bare, some with a little sand (comparable to what’s in the display), and some use a deep sand bed (DSB). I prefer to have a normal sand bed, about 1″ deep. I prefer to use oolite sand in a refugium though. Refugiums usually have relatively lower flow than the display and it is directed in a way that doesn’t disturb a sand bed and kick it up. Oolite is smaller than most sands so it gets kicked up in a lot of displays and is therefore better kept to a refugium. It is small, spherical, and goes in and out of solution easily so it can help maintain KH and calcium levels better than most sands.
In general lower flow is better because it gives the macroalgae more time to suck all the nutrients out of the water. However, you don’t need to worry about this. Most tanks need more flow than the sump can handle so the sump won’t have too much. If there is more flow the water goes through the refugium more times per hour and just spends less time there each time. I have seen refugiums with too little flow (stagnant, nuisance algaes develop around and even on the macroalgae, etc.). I have not seen one with too much flow in the refugium.
Refugiums are an essential part of natural filtration in saltwater tanks. They are usually used to grow macroalgae which out competes nuisance algae for nutrients. They can also be a great place to put certain fish if they are getting picked on or would bother other inhabitants of the tank. They are even a great place to put things that aren’t reef safe.