DUBAI: The Algerian government is looking at a new strategy to cope with a declining oil reserve and the promotion of alternative energy sources. Algerian President Abdelaziz Bouteflika has referred to the new strategy as the country's goals for a “post-oil era.” The country's discussions comes on the heels of a government report that forecasted a significant rise in domestic electricity and gas demand in the near future. The Algerian Electric and Gas Regulatory Commission (CREG) said that they expect gas consumption to reach 42-55 bn cu meters by the end of the decade and see electricity needs skyrocketing. The country won't be able to meet the demands, despite massive oil reserves, the report said. Unlike neighbor Morocco – which is pushing hard on renewables – Algeria currently is on track to produce just 6-8 percent of its electricity from renewable energy sources by 2020. The government is looking for alternatives, and is launching a new government initiative and is offering incentives to companies to invest in renewable energy. “It is all part of our needs for our people,” said Ibrahim Abdelrahman, an environment ministry official. He told Bikya Masr that “it has to happen now because we can't wait until the situation grows too large.” The projects include “Horizon 2011,” a UNDP-financed program to supply 5500 homes with solar hotwater, and “Al Sol”, a program financed by the FNME (Fonds National pour la Maîtrise de l'Energie, National Fund for Energy Management) to supply 2000 individual solar water heaters, half in homes, half in industry. The Electricity Law of 2002 and the 2004 Decree on Renewable Energy have paved the way for future reforms, allowing network access to all operators and opening the electricity market to renewable energies. The current goal is to raise the share of renewables to 30 percent by 2030-40. The list of projects also includes a hybrid power station in Hassi R'mel, currently under construction by the Spanish company Abener and Algeria's Neal (New Energy Algeria). Initially expected to be completed by August 2010, the plant, powered by gas and solar energy, will produce 150 MW of electricity. While solar energy remains the main focus of efforts to boost production from renewables, Algeria is looking at other possibilities. The country's first wind farm – built in the province of Adrar by the French company Vergnet – is expected to become operational in 2012. It will generate 10 MW of electricity. While the need to attract foreign investment to meet the high costs of developing renewables is evident, the process of building partnerships is not without its problems. The former energy chief, Chakib Khelil, declared last year that the government doesn't want foreign companies “exploiting solar energy” from Algerian land, and this may yet become a politically sensitive issue. With significant growth in demand expected in coming years, along with a government open to investing in renewable energy, Algeria could well become a leader in developing non-oil energy sources. However, aware of the risks posed by volatile oil prices and the resulting need to diversify its energy mix, Algeria must tackle a number of difficult issues before it can take advantage of the long-term opportunities offered by renewable energy sources. BM
