Algeria Energy Situation

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Algeria
Flag of Algeria.png
Location _______.png

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.

44,903,225 (2022)

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 (2022)

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.

194,998,449,769 (2022)

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

4,342.64 (2022)

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

99.79 (2021)

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


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.[1] 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%).[2] 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[3], 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)[4]

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.[5]

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).[6]

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).[7] 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.[8]
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.[9]
Between 2001 and 2013, electricity production rose from 26,250 GWh to 57,397 GWh[10] . 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)[11]:

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[12]:

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.[13]

Electricity Prices

In 2013, electricity prices were fixed at 0.03 USD/kwh for all segments[14]. According to the US Energy Information Administration, this price has been in place since 2005.[15]

Transmission & Distribution

In terms of the distribution grid, there are several operators providing Algeria with electricity. To offer some overview, the involved players and their functions in the process of transmitting and distributing energy are listed below.
Energy distribution by company and the respective activity[16]:

Company Activity

Sonelgaz

National electricity production, commercialisation and distribution of natural gas

Algerian Energy Company (AEC)

Electricity production, commercialisation, energy transport and distribution, desalination of sea water and telecommunications

KAHRAKIB

Studies on and realisation of high tension electricity infrastructure

KAHRIF

Works on electrification

KANAGHAZ

Studies on and realisation of canalisation and gas transportation


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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Policy Framework, Laws and Regulations

General Energy Policy, Energy Strategy

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.[17] 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.[18] In Article 5 it furthermore commits to the necessary studies and research and the promotion of sources of renewable energy.[19] ►Go to Top

Important Laws and Regulations

Due to the increasing importance of renewable energies, Algeria has created a legal framework concerning the promotion and exploitation of renewable energy. The foundation of this legal framework is given by the following legal documents:[20]

  • Law no. 99-09 concerning energy cuts (July 28th, 1999)
  • Law no. 02-01 concerning electricity and distribution of gas (February 5th, 2002)
  • Law no. 04-09 concerning the promotion and exploitation of renewable energies in the context of sustainable development (August 14th, 2004)
  • Executive decree no. 04-92 concerning the application of a subsidisation of renewable energy based electricity production
  • Special purposes account no. 302-131, titled Fonds National pour les Energies Renouvelables, comprised in article 63 of the budgetary law of 2010
  • Executive decree no. 13-218 (June 18th, 2013) fixing the conditions for the access to premiums for renewable energy production.

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Institutional Setup in the Energy Sector

Governmental Institutions

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.[21] MEM is assured control of the energy sector. Public institutions and organisations are subordinated to it.[22] 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).[23] On the basis of article 63 of the budgetary law, the FNER was found in 2010 and is financed by 0,5% of revenues gained from the export of fossil energy resources.[24] It is institutionalised by the special purposes account no. 302-131. In a more global context, the funds main task is the reinforced development of renewable energies in Algeria. A very particular notice should be given to the fewer institutions that deal with renewable energy and energy efficiency. Although the trend and global awareness of these issues has mainly 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 found in 1985.[25] According to decree no. 99-09, dating July 28th 1999, APRUE's main tasks include amonst others the implementation of the Programme National de Maîtrisse de l'Energie (PNME) and sectorial projects involving partnerships with other sectors (e.g. industry, transportation).[26] Having said that, the descirption of competencies and missions are formulated quite vaguely. Another organisation that should be mentioned explicitly is the New Energy Algeria (NEAL) that was found in 2002.[27] 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.[28] ►Go to Top

State-owned Enterprises

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 found by the government in 1963 (presidential decree no. 63 - 491 December 31st, 1963).[29] 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.[30] Overall, the SONATRACH group is made up of 29 subordinated companies and organisations.[31] 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 found the Algerian Energy Company (AEC)[32], 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,[33] whereas the electricity transportation is mainly carried out by the Société Algérienne de Gestion du Réseau de Transport de l'Electricité (SGTE).[34] In total, the SONELGAZ group consists of 38 subordinated companies and organisations.[35] ►Go to Top

Activities of Other Donors, Activities of NGOs

Algeria's range of foreign donors and their acitivities and forms of support are quite big. Amongst other external donors, such as the World Bank, the United Nations Development Programm (UNDP), the African Development Bank (ADB), the USA, Canada, and Japan, the European Union is among the most active donors.[36] Apart from the individual effort of several EU-member states (e.g. Italy, Spain, and Belgium), the European Investement Bank (EIB) and the European Commission (EC) have contributed decisive support in the recent decades.[37] The work of GIZ focus on sustainable economic development including consultancy of small and medium enterprises and industry zones. Moreover ressource managemant, climate change, water and mirco finances are prioritized.
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Further Information

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References

  1. ↑ Deutsche Außenhandelskammer (German Chamber of Foreign Trade - AHK), Last Updated: 2011, Access: September 16, 2011, URL: http://algerien.ahk.de/algerien/
  2. ↑ http://www.iea.org/statistics/statisticssearch/report/?year=2012&country=ALGERIA&product=Balances
  3. ↑ http://www.iea.org/statistics/statisticssearch/report/?year=2012&country=ALGERIA&product=Balances
  4. ↑ http://www.mem-algeria.org/fr/statistiques/Bilan_Energetique_National_2013_edition_2014.pdf
  5. ↑ http://www.iea.org/statistics/statisticssearch/report/?country=ALGERIA&product=Balances&year=2012
  6. ↑ http://www.imf.org/external/pubs/ft/scr/2014/cr14342.pdf
  7. ↑ http://www.ren21.net/Portals/0/documents/activities/Regional%20Reports/MENA_2013_lowres.pdf
  8. ↑ http://www.rcreee.org/sites/default/files/algeria_fact_sheet_print.pdf
  9. ↑ http://www.mem-algeria.org/fr/statistiques/Bilan_Energetique_National_2013_edition_2014.pdf
  10. ↑ http://www.iea.org/statistics/statisticssearch/report/?country=ALGERIA&product=electricityandheat
  11. ↑ http://www.iea.org/statistics/statisticssearch/report/?country=ALGERIA&product=electricityandheat
  12. ↑ http://www.aprue.org.dz/PUBLICATION%20CONSOMMATION%20ENERGÉTIQUE%20FINALE%202012.pdf
  13. ↑ http://www.mem-algeria.org/fr/statistiques/Bilan_Energetique_National_2013_edition_2014.pdf
  14. ↑ http://www.rcreee.org/sites/default/files/rs_latest_-electricity_-prices_schemes_in_rcreee_-ms_6-2013_en.pdf
  15. ↑ http://www.eia.gov/countries/cab.cfm?fips=ag
  16. ↑ Ministère des l'Energies et des Mines (MEM), 2012, "Distribution de l'Energie", Accessed: 17th of June, 2012, URL: http://www.mem-algeria.org/francais/index.php?page=distribution-de-l-energie
  17. ↑ Ministère de l'Energie et des Mines (2007), "Décret exécutif n° 07-266 du 27 Chaâbane 1428 correspondant au 9 Septembre 2007 fixant "Les attributions du Ministre de l'Energie et des Mines"", Last Updated: - , Accessed: September 30, 2011, URL: http://www.mem-algeria.org/english/index.php?page=missions-et-domaines-d-activites
  18. ↑ Ministère de l'Energie et des Mines (2007), "Décret exécutif n° 07-266 du 27 Chaâbane 1428 correspondant au 9 Septembre 2007 fixant "Les attributions du Ministre de l'Energie et des Mines"", Last Updated: - , Accessed: September 30, 2011, URL: http://www.mem-algeria.org/english/index.php?page=missions-et-domaines-d-activites
  19. ↑ Ministère de l'Energie et des Mines (2007), "Décret exécutif n° 07-266 du 27 Chaâbane 1428 correspondant au 9 Septembre 2007 fixant "Les attributions du Ministre de l'Energie et des Mines"", Last Updated: - , Accessed: September 30, 2011, URL: http://www.mem-algeria.org/english/index.php?page=missions-et-domaines-d-activites
  20. ↑ Minstère de l'Energie et des Mines (2011), "Programm for Renewable Energy and Energy Efficiency", pg. 28
  21. ↑ Richter, A., Buss, I., Dedorath, G., (2012), Capacity Assessment (Evaluation des Capacités du Secteur des Energies Renouvelables en Algérie, Berlin et al.: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, pg. 25
  22. ↑ Ministère de l'Energie et des Mines, "Décret exécutif n° 07-266 du 27 Chaâbane 1428 correspondant au 9 Septembre 2007 fixant "Les attributions du Ministre de l'Energie et des Mines"", Last Updated: -, Accessed: September 30, 2007, URL: http://www.mem-algeria.org/english/index.php?page=missions-et-domaines-d-activites
  23. ↑ Richter, A., Buss, I., Dedorath, G., (2012), Capacity Assessment (Evaluation des Capacités du Secteur des Energies Renouvelables en Algérie, Berlin et al.: Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, pg. 25
  24. ↑ (ibid.)
  25. ↑ L’Agence Nationale pour la Promotion et la Rationalisation de l’Utilisation de l’Energie (APRUE), 2010, "Qui sommes nous?", Last Updated: - , Accessed: October 4, 2011, URL: http://www.aprue.org.dz/maitrise-energetique.html
  26. ↑ L’Agence Nationale pour la Promotion et la Rationalisation de l’Utilisation de l’Energie (APRUE), 2010, "Qui sommes nous?", Last Updated: - , Accessed: October 4, 2011, URL: http://www.aprue.org.dz/maitrise-energetique.html
  27. ↑ New Energy Algeria Spa (NEAL) (2010), "Qui sommes-nous?", Last Updated: - , Accessed: October 4, 2011, URL: http://www.neal-dz.net/index.php?option=com_content&view=article&id=275&Itemid=124&lang=fr
  28. ↑ New Energy Algeria Spa (NEAL) (2010), "Qui sommes-nous?", Last Updated: - , Accessed: October 4, 2011, URL: http://www.neal-dz.net/index.php?option=com_content&view=article&id=271&Itemid=123&lang=fr
  29. ↑ SONATRACH (2010), "Elements d'histoire des Hydrocarbures en Algerie", Last Updated: - , Accessed: October 4, 2011, URL: http://www.sonatrach-dz.com/NEW/histoire.html
  30. ↑ El-Katiri, Dr. Mohammed (2010, 5), "Special Series - Sonatrach: An International Giant in the Making", Shrivenham (England): Defence Academy of the United Kingdom, pg. 3
  31. ↑ Ministère de l'Energie et des Mines, "Les Entreprises du Secteur", Last Updated: - , Accessed: October 4, 2011, URL: http://www.mem-algeria.org/francais/index.php?page=les-entreprises-du-secteur
  32. ↑ Algerian Energy Company (AEC) (2011), "Présentation de l'Activite", Last Updated: - , Accessed: October 4, 2011, URL: http://www.aec.dz/site/home.php
  33. ↑ Groupe SONELGAZ Spa, "Scoiété Algérienne de Production de l'Electricité", Last Updated: - , Accessed: October 4, 2011, URL: http://www.sonelgaz.dz/article.php3?id_article=67
  34. ↑ Groupe SONELGAZ Sap, "Société Algérienne de Gestion du Réseau de Transport de l'Electricité", Last Updated: - , Accessed: October 4, 2011, URL: http://www.sonelgaz.dz/article.php3?id_article=68
  35. ↑ Ministère de l'Energie et des Mines, "Les Entreprises du Secteur", Last Updated: - , Accessed: October 4, 2011, URL: http://www.mem-algeria.org/francais/index.php?page=les-entreprises-du-secteur
  36. ↑ European Union (2007), "European Neighbourhood and Partnership Instrument - Algeria", pg. 17
  37. ↑ European Union (2007), "European Neighbourhood and Partnership Instrument - Algeria", pg. 13-17

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