Article by Rym Loucif, Partner at Loucif + Co, Algeria
In the framework of the Algerian-German energy partnership, and with the participation of the German Federal Ministry of Economy and Energy (BMWi), and the Algerian Ministries of Energy (MEM) and Energy Transition (MTEER), an exploratory study on the potential of Power-to-X (green hydrogen) for Algeria has been published by the German development agency, Deutsche Gesellschaft für internationale Zusammenarbeit (GIZ) GmbH.
In order to diversify energy sources and reduce the dependence on hydrocarbons, and to cope with constantly increasing internal consumption, the Algerian government has announced a national plan for the development of renewable energies, with a target of 15 000 MW by 2035.
On 23 December 2021, the Ministry of Energy Transition and Renewable Energies launched a call for tenders for the realisation of a 1,000 MW solar energy production project («Solar 1,000 MW»). The objective is to reduce hydrocarbon consumption by 10% per year by 2030.
In this context, experts say that the development of the green hydrogen industry from renewable electrical energy is one of the key solutions for a successful energy transition.
At the ”3rd Algerian-German Energy Day” in December 2021, the Minister for Energy Transition stated that ”green hydrogen is emerging as the strategic alternative clean fuel of the coming decades. It has an important role to play in a clean energy transition. It is a vector that will become essential for our economy”.
In this context, the study proposes an integrated assessment of the hydrogen sector in Algeria, including the evaluation of investment needs. It highlights areas for improvement of the legal, regulatory and institutional framework in order to foster large-scale investments in decarbonisation.
A significant potential for the production of green hydrogen production exists in Algeria. The study shows that it is technically and economically possible to develop a green hydrogen industry in Algeria, thus contributing to the decarbonisation of several sectors and the reduction of dependence on hydrocarbons.
Algeria’s existing infrastructure in the oil and gas industry, its industrial gas industry, its exceptional potential in wind and solar energy and its geographical proximity to Europe, make it a potential supplier of green hydrogen or other valuable gases.
However, the production costs differ greatly depending on the location of the energy production by photovoltaic or wind systems.
The study also indicates that there is a vast infrastructure for the production, use or export of fossil fuels, which can be successfully used, at least partially, for the green hydrogen industry.
Finally, the study defines three basic stages for the development of a green hydrogen industry in the country:
• 2022 – 2030: Piloting, demonstration phase;
• 2030 – 2040: Scaling up and market creation phase;
• 2040 – 2050: Competition market.
The full study is available Here