Algeria Energy Situation

Overview

People's Democratic Republic of Algeria
Capital	Algiers (36°42′N 3°13′E)
Official language(s)	Arabic
Government	Semi-presidential republic
President	Abdelaziz Bouteflika
Prime Minister	Ahmed Ouyahia
Total area	2,381,741 km2
Population	35,423,000 (2010 estimate)
GDP (nominal)	$158.969 billion
GDP Per capita	$4,478
Currency	Algerian dinar (DZD)
Time zone	CET (UTC+01)
Calling code	+213

Algeria is located in North Africa and is bordering 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. Being part of the Maghreb, Algeria is furthermore considered to be a part of the MENA-region. 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 being occupied by the Sahara, which thus explains the population of roughly 33 million people. This is also expressed in the arrangement of population density: 90% of the population is located in the north. The mild Mediterranean climate coming from the coast is being replaced by a dry desert climate while moving south. The official language is Arabic, although French can be considered to be a common lingua franca, whereas in some areas Berber dialects can be common as well. Having a parliament that consists of a national assembly and a senate, Algeria is a republic with Abdelaziz Bouteflika, who has been reelected with 90.2% of votes in 2009, as its president since 1999. Ethnic groups are made up of a vast majority of Arab-Berber (99%). However, most Algerians identify themselves with their Berber heritage rather than their Arab one. The state religion is Sunni Muslim, likewise represented by a vast majority, while Christians and Jews make up less than 3% of the population.
Minerals that can be found in this region are amongst others oil, gas, iron, and lead. Together with agricultural goods, they make up the majority of export goods. Furthermore, they are the reason, why Algeria is part in international economic conglomerates, such as the OPEC or the OAPIC. Algeria’s gross domestic product (GDP) has been constantly rising in the last couple of years, bringing it to the approximate amount of $160 billion in 2010. The GDP per capita is hence about $7.3.
Algeria has a number of transnational issues to deal with, including an international dispute with the Moroccan administration of Western Sahara and illegal schemes in form of smuggling, human trafficking and forced labor.

 

Energy situation

Energy Supply

In 2008, Algeria has produced a total amount of 162,044 ktoe of energy, which is about 1,884,571 GWh. Its main energy source is crude oil (54.4%), followed by gas (45.5%). In comparison, the numbers concerning the renewable energies are much smaller and close to zero. Other energy sources, such as coal, nuclear power or heat are in fact zero, thus giving an impression that Algeria has quite a unilateral energy landscape. Published by the International Energy Agency (IEA), the numbers below offer more detail to Algeria's energy production:

Total Energy Production (2008)

Energy Source	in ktoe	in %
Coal and Peat	0	0
Crude Oil	88,187	54.4
Oil Products	0	0
Gas	73,783	45.5
Nuclear	0	0
Hydro	24	0.02
Geothermal, solar, etc.	0	0
Combustible renewables and waste	49	0.03
Electricity	0	0
Heat	0	0
Total1	162,044

Table 1: Total Energy Production of Algeria (2008)
Source: International Energy Agency, ©2011, "2008 Energy Balance for Algeria", Last Updated: - , Accessed: September 19, 2011, URL: ">http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=DZ http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=DZ">http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=DZ   

Taking Table 1 above into consideration, Table 2 ("Total Primary Energy Supply") offers quite a similar picture. It might yet seem suprising, that gas is now the main energy source with more than 60%, while oil only makes up 37% of the energy supply. This curiosity can be explained by the massive amount of crude oil (-55,002 ktoe) and oil products (-19,334 ktoe) Algeria is exporting and thus decreasing the amount of available oil. Plenty of gas is being exported, as well (-51,259 ktoe).

Total Primary Energy Supply (2008)

Energy Source	in ktoe	in %
Coal and Peat	755	2.0
Oil	13,721	37.0
Gas	22,524	60.8
Nuclear	0	0.0
Hydro	24	0.01
Geothermal, solar, etc.	0	0.0
Combustible renewables and waste	49	0.1
Electricity	-4	-0.1
Heat	0	0.0
Total1	37,069

Table 2: Total Primary Energy Supply of Algeria (2008)
¹Total may not add up due to roundings.

Source: International Energy Agency, ©2011, "2008 Energy Balance for Algeria", Accessed: September 19, 2011, URL: ">http://www.iea.org/stats/balancetable.asp http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=DZ">http://www.iea.org/stats/balancetable.asp? COUNTRY_CODE=DZ

  

Electricity

In the course of the last decade, electricity production rose from 26,250 GWh in 2001 to a predicted increase to up to 46,000 GWh in 2010. It appears that this development is mainly due to the economic growth that Algeria has experienced along the way. As Table 3 shows below, main source for the production of electricity is gas with a relativ percentage to the total amount produced of over 97%. Although there are other minor sources of electricity, such as oil and hydro-power, a similar picture as seen in the tables above is being created, suggesting a rather one-sided production and supply (in this case) of electricity.

Electricity Production and Supply (2008)

Energy Source	in GWh	in %2,3
Coal	0	0.0
Oil	792	2.0
Gas	39,161	97.3
Biomass	0	0.0
Waste	0	0.0
Nuclear	0	0.0
Hydro	283	0.7
Geothermal	0	0.0
Solar PV	0	0.0
Solar thermal	0	0.0
Wind	0	0.0
Tide	0	0.0
Other sources	0	0.0
Total Production	40,236	100.0
Imports	274	0.7
Exports	-323	-0.8
Domestic Supply	40,187	99.9

^{Table 3: Electricity Production and Supply of Algeria (2008)}

²In relation to the amount given by "Total Production"

³Total may not add up due to roundings and overlapping percentages.

Source: International Energy Agency, ©2011, "Electricity/Heat in Algeria 2008", Last updated: - , Accessed: September 20, 2011, URL: http://www.iea.org/stats/electricitydata.asp?COUNTRY_CODE=DZ

 

Energy Consumption

Compared to 2008, Algeria has increased its energy consumption in 2009 by almost 5%. In 2008, Algeria's total final consumption (TFC) added up to 23,447 ktoe units, equal to 272,688.6 GWh.

 

TFC of Energy (2008)

Sector	Consumption in GWh	in %
Industry	51,381.3	18,8
Transport	79,770.2	29.3
Residential	117,323.4	43.0
Non-energy use	24,213.7	8.9
TFC	272,688.6	100

Table 4: Algeria's TFC of Energy (2008)

Source: International Energy Agency, ©2011, "Electricity/Heat in Algeria 2008", Last updated: - , Accessed: September 20, 2011, URL: http://www.iea.org/stats/balancetable.asp?COUNTRY_CODE=DZ

Energy demand  

Between 1963 and 2007 – not even half a century of development – Algeria chronicles an enormous rise in the demand of electricity. Whereas electricity consumption in the early 1960’s was less than a single TWh, it has risen to 30 TWh in 2007. However, the boom in consumption has been quite stable recently, slowly rising by about 5.6% per annum. The German Chamber of Foreign Commerce (AHK) predicts an annual rise in energy consumption between 5.5% and 7%, causing a doubling in the increase of production of the energy sector.  In view of these facts, the Algerian Ministry of Energy and Mining (MEM) has proposed two possible future scenarios. One prevision is a rather moderate one, projecting a steady but fair continuation of the current trend in the rise of energy demand, assuming that the economy is developing in a similar slow and controllable way. The second and rather drastic forecast reckons with a strong and lasting reanimation of the economy, thus challenging the task to meet future energy demands. Depending on the scenario, energy needs could bounce up between 7.8% and 9.1% until 2017.

Electricity grid

According to the Wuppertal Institute for Climate, Environment and Energy, Algeria has an extensive AC network that spreads throughout the country with a total length of transmission network of about 18,000 km. Run by Sonelgaz, Algeria's main energy operator, electricity makes up 71% of its business, which is not only focused on the densely populated north but also makes efforts to reach down south. In the course of the planned and already partially implemented porject of the Mediterranean Ring (MED-RING), an international effort to interlink the countries bordering the Mediterranean Sea with an electronic circuit, Algeria is one out of 22 countries that is being connected with neighbouring grids from Tunisia, Morocco and Spain.

Access rate

The International Energy Association (IEA) states that the average energy supply per individual (TPES/pop. = toe/capita) in 2008 was 1.08 toe, which was much less than the worlds average (1.83 toe). Another statistic that seems to reveal a similar deviance is the consumption of electricity per individual (kWh/capita), which is about 957 kWh (compared to the worlds average of 2,782 kWh). The persumption is that these low numbers are not due to the reasonable energy use of Algeria's population, but due to the insufficient accessibility of electricity. An indiciation to support this hypothetical statement is the number of households considered to be clients of Sonelgaz: 6,525,999. Considering the average african household size of 4.7 members, this number mounts up to 30,672195.3 mio people - as opposed to the total population of about 34.5 million people. Following this logic, the concrete, explicit access rate would be around 89%. Obviously, this is nothing but a rough and approximate estimation due a lack of official numbers. Nevertheless, it offers a first impression on how to evaluate Algeria's access rate. However, it shall not lead to hasty conclusions, for this phenomenon can be explained by a number of potential factors, such as the fact that in 2009 34% of Algeria's population was considered to be part of the rural population, implying much more rudimentary living standards as compared to the urban population.  Having said that, the Algerian state and Sonelgaz are showing quite some effort to promote urbanisation. One statistic supporting this perception is the amount of almost 378,5 billion Algerian Dinars that was spent in 2009 in form of eight different projects that have dealt with rural electrification. Newer statistics indicate and display remarkable progress since then. According to Renewable Energy & Energy Efficiency Partnership (REEEP) over 98% of the population have used the service provided by the extensive network. Although the network has already undergone several exentensions recently, an extension of yet another 5% is planned for the upcoming years.

Network access is generally controlled by CREG. The German Chamber of Foreign Commerce yet claims that this does not represent any sort of obstacle in terms of the connection of renewable energy power utilities to the grid.

Market situation for different energy technologies and services

Although state-run gas and electricity company Sonelgaz considers energy prices to be far too cheap, prices are set by the  likewise state-run regulatory commission CREG and thus add up 0.04583 €/kWh (4,1789 DZD/kWh). Although the energy market has officially been liberalised, energy supply is still entirely regulated and controlled by the state (mainly in form of the just mentioned companies CREG and Sonelgaz), with the exception of a few private enterprises in which Sonelgaz is a major stakeholder. 

Despite the insufficient but highly expendable use of renewable energy, the Ministry of Energy and Mining of Algeria has declared renewable energy as a main priority for Algeria its up-to-date informative literature dating March, 2011. The Renewable Energy and Energy Efficiency Program includes the idea of installing up to 22,000 MW of power generating capacity from renewable resources until 2030.

Solar Energy

Algeria comes with 20 solar villages, of which the majority is in action and is contributing to the overall production of energy. Solar energy is considered to be the most potential source of renewable energy, the most of which is being naturally collected in the Sahara region with 2,650 kWh/m²/year.  Nevertheless, solar energy makes up only a minimal amount of the total energy that is being produced in Algeria. The 35 TWh that energy production has reached by now is mainly based on the exploitation of natural gas. According to Renewable Energy & Energy Efficiency Partnership (REEEP), the amount of produced solar energy is about 6.57 kWh/m²/day.

Future investments and promotion of solar energy accentuate two sub-technologies working with solar energy. On one hand the industrial integration of photovoltaic solar energy is supposed to be promoted to reach about 60% by 2013. On the other hand, solar thermal energy is allegedly to experience an industrial integration of 50% by year 2020, starting with a series of studies concerning the manufacturing of the respective equipment between 2011 and 2013.

Wind Energy

Past reports concerning the potential of energy gained by the exploitation of wind have been rated as very low. The 2011 report however promotes a rather different attitude by the Ministry of Energy and Mines.

Biomass

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Biogas

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Hydro Power

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Other renewable Sources

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Key problems of the energy sector

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Policy framework, laws and regulations

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General Energy policy, Energy strategy

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Important Laws and regulations

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Specific strategies (Biomass, renewable energies, rural electrification, energy access strategy etc.)

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Institutional set up in the energy sector

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Governmental institutions Private sector (enterprises, NGOs)

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Activities of other donors, activities of NGOs

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Existing projects

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Further Reading

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External links

• Official website
  
• Algeria entry at The World Factbook