The energy sector represents a major industrial activity and economic contributor in Algeria. The country is the
in Africa, with an annual generation of close to seven quadrillion British thermal units. The large energy production is due to the abundance of natural resources such as oil and natural gas, which are the main energy sources used in the country. In fact, despite Algeria’s ambitious renewable energy plans, clean energy sources remain largely untapped as of 2022.
Hydrocarbons dominate the energy landscape
Algeria’s energy mix is dominated by fossil fuels. Natural gas and oil together account for
over 90 percent of the energy generated in the country. Only a remaining 0.1 percent includes clean energy sources. In absolute terms, in 2021,
primary energy production from natural gas accounted for 3.8 quadrillion British thermal units, while approximately 2.8 quadrillion British thermal units of power were generated from
petroleum and liquid fuels.
Toward the energy transition
Aiming at reducing the dependence on hydrocarbons, Algeria has recently increased its
renewable energy capacity to reach 599 megawatts in 2022. However, the
renewable energy target is still far. According to Algeria’s Ministry of Energy, the renewable installed capacity should reach 22,000 megawatts by 2030. Although the country has significant renewable potential, especially in terms of solar power and hydropower, meeting this target needs substantial investment in energy infrastructure. In 2020,
most valuable power projects in the country were in the field of renewables. The energy transition is crucial to reduce the dependence on fossil resources, as well as to meet the increasing domestic demand for energy.
Meeting domestic needs
Algeria’s
primary energy consumption has generally increased since 2010 and reached close to 2.5 exajoules in 2022, with fossil fuels being the main energy source. As a large oil and gas producer, Algeria can satisfy its domestic energy needs, which are primarily linked to
household and industrial electricity consumption. The
price of electricity among Algerian households is around 0.04 U.S. dollars per kilowatt hour, a low price compared to other African countries. Being Algeria’s economy reliant on fossil fuels, the government subsidizes oil, gas, and electricity, resulting in lower prices for consumers – a typical feature of countries rich in fossil fuels.
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