Chronicle of the Middle East and North Africa

Algeria Looks to Solar Energy to Meet Growing Electricity Demand

Hybrid Power Plant in Algeria

Algeria covers an area of approximately 2.38 million km2, making it the largest country in Africa and the tenth largest globally. The desert accounts for approximately 80 per cent of this area. Moreover, the country boasts between 2,000 and 3,000 hours of sunshine per year, giving it the largest solar field in the world and the largest capacity in the Mediterranean basin. If exploited, this would enable Algeria to produce more than 169,400 terawatts per hour, equivalent to 5,000 times the annual national electricity consumption.

In recent years, the Algerian government has shown an ambition to consider solar energy as a real and powerful alternative to fossil fuels. This ambition is not new, however. It dates back to the crisis in 1980, when oil prices dropped, prompting the government to establish the High Commission for Renewable Energies in 1982. The commission was responsible for running five research centres and one pilot solar plant. However, Algeria did not have the necessary technology to leverage this type of energy, which prevented it from making progress in this field.

In a May 2016 interview with CNN, Bouqras Rokaya, an Algerian specialist in international economic relations, attributed Algeria’s delay in capitalizing on solar energy compared to its neighbours to its conventional energy resources (oil and gas) and a lack of political will.

Chakib Khelil, former energy minister and public affairs expert, speaking to the el-Hiwar daily on 12 May 2017, said that Algeria’s failure to exploit solar energy was due to the high cost of procuring and installing solar panels as well as the high cost of generating solar energy compared to natural gas.

This failure is also due to the misuse of opportunities by the Algerian authorities, a notable example being the Desertec solar energy and wind power project. Overseen by the German Desertec Foundation, the project was launched in 2009 by a consortium of German banks and institutions with the aim of producing nearly 20 per cent of the European market’s energy needs and consequently raising energy production levels to about 50 per cent by 2025 in Europe, the Middle East and North Africa, according to estimates by the German Aerospace Center.

The project was initially due to be implemented in the deserts of several countries in the region, but attention eventually settled on Algeria. However, negotiations between Algeria and Germany stalled because of the many obstacles placed in the way by the Algerian side. According to many experts and economic analysts, Algeria was riding the financial wave of high oil prices at the time, and as a result considered alternative energy generation to be a low priority. It ultimately lost the project as a result.

The situation did not stop at Desertec. Algeria tried to make up for the earlier loss by introducing the Renewable Energy and Energy Efficiency Development Plan 2011–2030. This indicated that there was a long-term and well-defined strategy to upgrade the production and exploitation of renewable energy, including solar energy. The plan aims to generate 22,000 megawatts of electricity from renewable sources, amounting to 27 per cent of the annual national electricity consumption. A total of 13,575 megawatts will be produced using solar energy, while the rest will be produced using wind power, thermal energy, bioenergy, geothermal energy and cogeneration. The cost of this ambitious plan is $120 billion, funded by external sources and local private funders. Sonatrach, an Algerian energy company, began looking for foreign partners to begin implementation of the first phase, namely to build a plant to produce 4,000 megawatts of renewable energy.

Sonatrach and Italian company Eni signed a strategic agreement in November 2016 to develop renewable energy projects, especially solar energy, in order to achieve the target of meeting 40 per cent of local demand from alternative energy. Following the announcement of projects proposed under the agreement, 34 companies, including French and Italian companies specializing in solar energy projects, expressed their intention to submit bids to complete the projects. For its part, Condor Electronics, an electronics pioneer in Algeria, announced its production of plates used in solar energy panels and designed in different sizes to fit solar power plants, homes, rural electricity, street lighting and agricultural irrigation.

In order to meet the national targets, Algeria built several solar power plants across the country. The plant in Djelfa, about 350km from the capital Algiers and a gateway to the Sahara, is the largest in terms of production capacity, with 190,000 solar panels. The cost of building the plant exceeded 11 billion Algerian dinars (US$93 million).

A meeting organized under the patronage of former Prime Minister Abdelmalek Sellal in 2016, titled Energy Shifting Between Economic Challenges and Environmental Risks, presented the reality of renewable energy in Algeria, including solar energy, which is the subject of international competition. French expert Gil Bonavi said Algeria uses only 0.003 per cent of its solar energy to produce electricity, despite the great potential of the vast Sahara. According to one estimate, 254km2 in the Sahara would be enough to meet the total electricity demand of the world, equivalent to about 37,000 billion cubic metres of natural gas per year.

According to el-Hiwar newspaper, Algeria took the lead in establishing a hybrid power plant combining solar and natural gas, located in Hassi al-Raml, with a production capacity of 150 megawatts. A report published by Sky News Arabia on 29 January 2019 stated that Algeria is moving toward using clean energy for power generation, launching a number of renewable energy projects this year, as part of efforts to meet the increasing demand for electricity, whereas gas will be exported to generate income to feed the state treasury with hard currency. According to the same report, Algeria will soon invite bids from local and foreign companies to build a 150-megawatt solar power plant.

The report also stated that the average annual growth rate of demand for power domestically is 6.91 per cent, which indicates the production challenges that Algeria will face in the future to meet this growing demand.

Algeria currently produces 98 per cent of its electricity using natural gas. Experts affirm that the solar energy available in the Sahara will shape the future development of Algeria’s energy sector. The Algerian authorities are also moving toward supporting projects to produce different types of renewable energy. This is because such projects contribute to local electricity supply as well as to generating wealth and creating job opportunities.

Algeria has recently been trying to make up for lost time by intensifying its efforts to attract investment in renewable energy. A meeting between Fatma Zohra Zerouati, Minister of Environment and Renewable Energy, and [John O’Rourke], the European Union ambassador to Algeria, on [27 January 2019] covered future projects related to renewable energy sources as well as ways to support and promote them, especially in southern regions that are far removed from the electricity network.

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