Algiers, Algeria – President Abdelmadjid Tebboune has set ambitious goals for Algeria to diversify its energy sources, aiming to significantly ramp up its solar capacity. With a current photovoltaic capacity of just 436.8 MW as of late 2023, the nation, blessed with one of the world’s richest solar resources, is on the cusp of a major transformation in its energy sector.
Despite the country’s heavy reliance on natural gas for 99% of its electricity, recent developments show a shift towards renewables, particularly solar. Only a small fraction of the 11.17 MW of new solar installations in 2023 was connected to the grid, with the majority designed for off-grid solutions, highlighting the initial stages of solar’s integration into the national energy mix.
In a bold move to accelerate this shift, President Tebboune has overseen the launch of two significant solar tenders: the “1000 MW” and “2000 MW” projects. These initiatives are part of a broader strategy to reach 4 GW of solar power by early 2025, involving local and international companies in constructing solar plants across Algeria.
The decision to use the EPC (Engineering, Procurement, Construction) model for these projects marks a strategic choice for initial infrastructure development, with an eye towards possibly transitioning to IPP (Independent Power Producer) models in the future for more competitive pricing.
In March 2024, contractors were named for these projects, showcasing a blend of Algerian enterprises and foreign expertise, emphasizing local content to stimulate domestic industry:
- A requirement for 35% local content in projects offers a 25% cost incentive, encouraging the use and production of locally made components.
- Companies like Zergoun, an Algerian solar panel manufacturer, are at the forefront, producing for both domestic use and potential exports.
The government has also relaxed foreign investment rules, removing the “51/49” ownership cap for renewable energy projects, signaling a welcoming stance for international collaboration in this sector.
This push towards solar energy is not just about reducing dependence on fossil fuels but also positioning Algeria as a potential exporter of green technologies like hydrogen and solar glass. With plans to develop a robust local industrial base for renewable energy, including solar panel and glass manufacturing, Algeria is setting its sights on becoming a significant player in the global renewable energy market by 2035, targeting 15 GW of renewable energy capacity.
This strategic pivot not only aims to harness Algeria’s natural solar wealth but also to foster economic growth through sustainable energy solutions, marking a new chapter in the nation’s energy policy under President Tebboune’s leadership.
