Algeria Energy Situation

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Algeria

Capital:

Algiers

Region:

Coordinates:

28.0000° N, 2.0000° E

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

2,381,741

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

45,606,480 (2023)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

25 (2023)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

239,899,491,128 (2023)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

5,260.21 (2023)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

100.00 (2022)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

-177.12 (2014)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

99.98 (2014)

Source: World Bank

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Introduction

Algeria is located in North Africa and borders Tunisia and Libya in the east, Niger and Mali in the south, and Mauritania, Western Sahara, and Morocco in the west. In the north, Algeria’s vast coast of over 1,200 km extends to the Mediterranean Sea. With its more than two million km² of national territory, Algeria is by far the largest North African country. However, most of its national territory is occupied by the Sahara, which explains the arrangement of population density: 90% of the population is located in the north. The mild Mediterranean climate coming from the coast is replaced by a dry desert climate further south.
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Energy Situation

Energy Data

Primary Energy Supply

In 2012, Algeria produced a total amount of 143,764 ktoe of energy. The main energy sources are crude oil (49.5%) and natural gas (50.4%). In comparison, the numbers concerning the renewable energies are much smaller and close to zero. Other energy sources such as coal or nuclear power are not used. As large shares of the produces energy are exported, the primary energy supply in 2012 was 46,325 ktoe.

Consumption

Algeria's total final consumption (TFC) has been steadily increasing in recent years. While in 2010 the energy consumption added up to around 31,500 ktoe, in 2013 it had increased to 38,543 ktoe, which means that the country has seen an increase of 22% in just three years.
Taking a closer look at various sectors, the residential sector (including agriculture) is the one which consumes the most energy (43%), followed by the transport sector (36%) and the industry sector (21%). More detailed figures are outlined in the table below.

Table 1: Final energy consumption in Jordan in 2012 and 2013 by sector (ktoe)

Sector	2012	2013	Change in %
Industry	7,939	8,229	+3.7
Transport	13,371	13,889	+3.9
Residential	15,068	16,425	+9.0
Total	36,377	38,543	+6.0

Import and Export

Algeria is a net exporting country. In the region, it is an important producer of hydrocarbons and also exports large amounts of natural gas to Europe. In 2012 , Algeria imported a total of 5,031 ktoe, of which 4,639 ktoe were oil products. These amounts appear minor compared to the exports, which added up to 46,325 ktoe. The exports were mostly crude oil, oil products and natural gas.

Subsidies

Algeria does not export all of its natural gas and oil production, but also relies on it for domestic consumption. Both resources are heavily subsidized. According to the International Monetary Fund (IMF), altogether, subsidies were at 18.3 % of GDP in 2012. Of this figure, 3.4 percentage points were subsidies for natural gas, 4.0 percentage points for electricity and 4.7 percentage points for petroleum products (including diesel, gasoline and LPG).
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Renewable Energy

Although there is a high potential for the use of solar energy in Algeria, there are hardly any solar power plants so far. According to the MENA Renewables status report 2013 by REN21 the installed capacity of Photovoltaics (PV) was 7.1 MW in 2010 and 25 MW in 2012 of Concentrated Solar Power (CSP). The report also gives estimates for capacity of renewable energy projects in the pipeline. For solar power, a capacity of 175 MW in the pipeline was estimated as well as 20 MW of wind power. However, the figures issued by the Regional Centre for Renewable Energy and Energy Efficiency (RCREE) are higher: They state an estimated capacity of 370 MW of solar power in the pipeline (all CSP) and 210 MW of wind power.
Although there is some installed capacity of hydro power (228 MW), this energy source only plays a marginal role due to limited precipitation and high evaporation.
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Electricity

Installed Capacity and Generation

At the end of 2013, the installed capacity of electricity generation reached 15.1 GW. This is an increase of about 18% compared to the precedent year and due to the new power plants being installed and starting operations.
Between 2001 and 2013, electricity production rose from 26,250 GWh to 57,397 GWh . As table 2 below shows, the main source for the production of electricity is gas with a relative percentage to the total amount produced of over 92%. Although there are other sources of electricity, namely oil and hydro-power, these play only a minor role.

Table 2: Electricity production by source (2012):

Production from	in GWh	in %
- Oil	3,727	6.49
- Gas	53,048	92.42
- Hydro	622	1.08
Total Production	57,397	100

Consumption

The residential sector is the biggest consumer in Algeria, representing 38.1% of the nationally consumed energy. Other important sectors are the tertiary sector (20.93%) and the manufacturing industry (17.83%). The details are outlined in table 3.

Table 3: Electricity consumption by sector (2012) in ktoe:

Sector/ Product	in ktoe	in %
Agriculture	89,865	2.42
Public works	17,742	0.48
Hydraulics	468,786	12.63
Mines and quarries	27,365	0.74
Manufacturing industry	661,555	17.83
Gas and oil industry	273,239	7.36
Residential	1,413,960	38.10
Tertiary	776,735	20.93
Transport	11,670	0.31
Total	3,710,917	100

Grid

In 2012 the total length of the transmission network was 23,802 km which was an increase of 6.29% in comparison to 2011. While the electrification rate was 57% in 1977, as of 2010, 99.3% of the population has now access to electricity. Algeria is connected with neighboring grids of Tunisia and Morocco by a 440 kV line each.

Electricity Prices

In 2013, electricity prices were fixed at 0.03 USD/kwh for all segments. According to the US Energy Information Administration, this price has been in place since 2005.
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Energy Policy

General Information

The general approach and strategy intended by the Algerian Ministry of Energy and Mines is constituted by decree no. 07-266, dating the 9th of September 2007. It represents one of the main basic modules, describing the function and role of the Ministry with respect to the intentions of the Algerian government. In Article 1, the Ministry commits to the elaboration of political and strategic research, the production and valorisation of hydrocarbon, mineral and energetic resources and the embedding of the respective industry in this sector. In Article 5 it furthermore commits to the necessary studies and research and the promotion of sources of renewable energy.
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Renewable Energy Policy

In February 2015, the Algerian Government adopted an ambitious Renewable Energy programme. It envisions the installation of 22 GW of RE by 2030, which is almost double than what was set as a target before (12 GW) and equals a share of about 27% RE in total electricity production. Of these 22 GW, 4,5 GW are supposed to be installed by 2020. The targets per technology are the following: PV 13,575 MW; Wind 5,010 MW; CSP 2,000 MW; Biomass 1,000 MW; Cogeneration 400 MW; Geothermal 15 MW.
RE projects are entitled to sell to the distributor the power produced at a guaranteed fixed price for 20 years, according to Décret Exécutif 13-218 and an Arrêté of 2/2/14. The Feed-in-tariffs vary according to plant capacity. For wind they are: >5 MW 9.5 €ct, <5 MW 11.9 €ct; for solar PV: >5 MW 11.6 €ct, <5 MW 14.5 €ct. Tariffs will be adjusted 5 years after starting operations, up to a maximum of 15%. CSP projects are so far not included in the FIT scheme.
An RE Fund has been set up by Executive Decree 11-423; to be financed through a 0.5% levy on oil tax revenues.
Priority grid access for RE project is provided by the Executive Decrees 06-428 and 06-429 of 26/11/06 and the Order of 21/02/08.
Land ownership for foreign investors requires prior approval. Most projects take place on state owned land under a concession regime. There are no priority development zones for RE.
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Energy Efficiency Policy

Also in February 2015, the Algerian government announced a new national programme on energy efficiency (EE) for the years 2015 to 2030. The EE programme mainly targets three sectors: the building sector, transport and industry.

In the building sector, more than 30 million toe are supposed to be saved by 2030. This will be achieved through innovative technologies and thermal insulation of constructions. Also, economic lamps and solar water heaters will contribute.

In the transport sector, the target is to save more than 15 million toe. The government aims to use fuels which are widely available and least polluting, like LNG and natural gas, in order to reduce the use of gasoline.

The industry sector is supposed to contribute 34 million toe by 2030.

Key Actors in the Energy Sector

Governmental Bodies and Agencies

The Algerian energy sector is politically represented by the Ministry of Energy and Mines (MEM). MEM is the most important player in the Algerian energy sector. Its mandate is given by decree no. 07-266 of 2010, assuring the ministry’s responsibility of elaboration and implementation of policies and strategies in the context of research, exploitation, production and usage of minerals and energy sources. MEM is assured control of the energy sector. Public institutions and organisations are subordinated to it. MEM is thus engaged in the domains of production, transport, sale and distribution. MEM’s function also comprises the superintendence of the Fonds National des Energies Renouvelables (FNER) and the Fonds National de la Maitrise de l’Energie (FNME). On the basis of article 63 of the budgetary law, the FNER was founded in 2010 and is financed by 0,5% of revenues gained from the export of fossil energy resources. It is institutionalised by the special purposes account no. 302-131. In a more global context, the fund's main task is the reinforced development of renewable energies in Algeria. 

Although the trend and global awareness of climate change and the role of energy production have grown in the last decade, some efforts have been made to approach them in earlier times. L’Agence Nationale pour la Promotion et la Rationalisation de l’Utilisation de l’Energie (APRUE), e.g., was already founded in 1985. According to decree no. 99-09, dating to 1999, APRUE's main tasks include the implementation of the Programme National de Maîtrisse de l'Energie (PNME) and sectorial projects involving partnerships with other sectors (e.g. industry, transportation). Having said that, the description of competencies and missions are formulated quite vaguely. Another organisation in this spectrum is New Energy Algeria (NEAL) which was founded in 2002. Its function mainly involves the production and development of renewable energies, the establishment of win-win partenerships within the framework of technology-cooperations, and the consultation of national and international enterprises dealing with renewable energies and energy efficiency.

The Commission de Régulation de l’Electricité et du Gaz (CREG) was created under law no. 02-01 of 2002. CREG is responsible to watch over the electricity and national gas markets in order to protect both the interests of the consumers and those of the operators. There are three main missions: realise and control public service, consult the government on organisation and functioning of electricity and gas markets and guard and control compliance with the pertinent laws.
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Utilities

The Algerian energy sector is characterized by a few company networks with national enterprises numerously scattered over the respective branches of the energy sector.
The hydrocarbon and petroleum branch mainly consists of the Groupe SONATRACH, a dominating organisation dealing with the exploitation, transportation and commercialisation of oil and gas products. The subordinated company NAFTAL SPA is a national petrol station chain and is owned 100% by SONATRACH, which itself was founded by the government in 1963 (presidential decree no. 63 - 491 December 31st, 1963). SONATRACH is the main player in terms of oil and gaz production and is - despite the fact that it is officially to be a commercial entity - a state-owned company of Algeria with the state being the sole shareholder of SONATRACH. Overall, the SONATRACH group is made up of 29 subordinated companies and organisations. Just as SONATRACH, Groupe SONELGAZ, responsible for the production and commercialisation of electricity and the national distribution of natural gaz, is likewise state-owned. Together, the two companies are the most important and influential players in the Algerian energy sector. In 2001, the Algerian Energy Company (AEC) was founded, whose main task it is to produce, commercialise, transport and distribute electricity throughout Algeria. Being a part of the SONELGAZ group, the Société Algérienne de Production de l'Electricité (SPE) is in charge of electricity production, as well, whereas the electricity transportation is mainly carried out by the Société Algérienne de Gestion du Réseau de Transport de l'Electricité (SGTE). In total, the SONELGAZ group consists of 38 subordinated companies and organisations.
The electricity distribution itself is organised by four companies: La société de distribution de l'ouest (SDO), la société de distribution du centre (SDC), la société de distribution d'Alger (SDA) and la société de l'est (SDE).

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Others

In 2013, 54% of Algeria's electricity was produced by independent power producers (IPPs). The companies are Kahrama, Shariket Kahraba Berrouaghia (SKB), Shariket Kahraba Koudiet Eddraouche (SKD), Shariket Kahraba Hadjret Ennouss (SKH), Shariket Kahraba Skikda (SKS) and Shariket Kahraba Terga (SKT).

Energy Cooperation

Since Algeria has an abundance of natural resources, in particular fossil fuels, a number of countries have expressed their interest to cooperate in the energy sector. Amongst the latest are Norway, Niger, Kenya and the Netherlands. In cooperation with Russia, Algeria plans to build its first nuclear power plant in 2025.

The European Union also plans to develop a strategic partnership with Algeria in order to diversify natural gas import sources.

Bilateral Energy Cooperation with Germany

Germany predominately imports crude oil from Algeria. Other imports are mainly chemical products and other raw materials.

In March 2015, an energy partnership between Germany and Algeria was signed.
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Further Information

• Official website of the Algerian MEM: www.mem-algeria.org/english/index.php
• Algeria entry at The World Factbook
• Official website of the Algerian "Commission de Régulation de l'Electricité et du Gaz": http://www.creg.gov.dz/
  
• Official website of the Algerian "Centre de Développement des Energies Renouvelables": http://www.cder.dz/

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References

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