Algeria Aims High: Becoming a Major Energy Hub

✏️ BY: Dr. Hana Saada

Algiers- Algeria, May 15, 2024 –  Algeria is furthering its journey towards energy diversification by adding nuclear energy to its mix, alongside solar, hydrogen, and natural gas, with a vision to emerge as a significant energy hub in the region.

The Ministry of Energy and Mines, led by Minister Mohamed Arkab, has unveiled plans to introduce civil nuclear energy into Algeria’s electricity production. This move aligns with Algeria’s ambitious objectives in renewable energy, leveraging its abundant natural resources.

“Algeria has the necessary means to realize its ambitious sustainable energy development program,” Minister Arkab emphasized, underlining the country’s commitment to advancing its energy sector.

A Fresh Financing Approach

To address the financing of new and renewable energy programs, particularly the remaining 12 GW of the national solar energy program, the ministry has introduced a new financing model. While the initial 3 GW were financed exclusively by the National Bank of Algeria (BNA) with $3 billion, the next phase involves private sector actors responsible for project development, financing, and operation. Minister Arkab ruled out external financing, stating, “We have both public and private financing mechanisms in place.”

The renewable energy program is progressing with the launch of nearly six solar photovoltaic plant construction contracts out of the total 19 lots under the 3 GW program. These plants are expected to be operational by 2026, a crucial step preceding the implementation of the national green hydrogen program, targeting 2 million tons by 2040 following the completion of the 15 GW solar program by 2035. Minister Arkab emphasized that hydrogen development is a priority, with pilot projects underway to master the entire hydrogen production value chain.

Deliberations on SoutH2

Algeria aims to progressively develop hydrogen for use in energy-intensive sectors such as cement, fertilizers, glass, and steel. The long-term plan is to produce and export 40 TWh (about 2 million tons) of hydrogen and its derivatives. Algeria is actively engaged in discussions with European partners on the SoutH2 corridor project. This ambitious endeavor aims to transport renewable hydrogen from Algeria to Germany via Tunisia, Italy, and Austria, utilizing existing gas pipelines and/or new interconnections.

Additionally, as part of its national strategy to diversify electricity production resources, Algeria is considering the introduction of nuclear energy. Minister Arkab disclosed the country’s intention to explore nuclear energy for electricity production in the coming years, subject to meeting the necessary technical and technological conditions.

Algeria’s strategic shift towards a diversified and sustainable energy sector is poised to position the nation as a major player, not only regionally but also on the global stage. With a comprehensive approach to energy development, Algeria aims to leverage its vast resources for economic growth and environmental sustainability.

 

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