Faced with a potentially toxic mix of crippling public spending and decreasing oil and gas production, Algeria is looking for ways to expand their energy sector into new directions, including a substantial 20 year solar plan. The North African nation took a step towards supporting green efforts this past week with the deadline for construction bids linked to an unspecified number of solar and wind farms.
Algerian gas and electricity company, CEEG opened the tender late last month to local and international outfits, marking one step towards a progressive national goal of 650MW by 2015 and building towards 22,000MW by 2030, with output almost evenly split between domestic and export demand. In 2010, the government outlined a $60 billion plan to support the green energy campaign.
Late last year, Algeria’s state-backed Sonelgaz signed on to become the MENA region’s third country to join the Desertec Initiative, a German led effort meant to support renewable energy efforts across North Africa with the eventual goal of supplying substantial energy to Europe. According to a Platts report, the Memorandum of Understanding signed by Algerian officials joins similar efforts in Egypt and Morocco in hopes of producing much-needed anchor projects across the Southern Mediterranean – a move that program advocates hope will help with nailing down financing to move the expansive effort forward.
Algeria’s tender comes as a part of the country’s planned energy diversification effort, intended to both ease over-dependence on traditional resources and reverse a steady decline in oil and gas production seen over the last few years. Despite the country’s substantial proven reserves, Algeria has faced waning interest from international firms recently thanks to a working environment often described as hostile towards outside companies. Contract disputes and a culture of corruption at the state-backed firm Sonatrach, culminating in an expansive leadership shake up last year, have kept new investment and interest low. In one particularly dismal case, a oil and gas license round last year saw only two of ten bids claimed, one of which came from Sonatrach itself.
In any case, a production slowdown would be a problem, but for a country so heavily dependent on oil and gas revenue for basic government spending, it could be a disaster. Algeria currently relies on oil and gas for nearly 98 percent of their export revenue and much of their government spending.
To help cope with the country’s energy situation, the government and Sonatrach have both announced changes to production requirements and the tax code, offering up more favorable terms. The amended terms are intended to both draw back foreign partners and encourage unconventional efforts, including shale projects and renewable options. Earlier this month, Dutch Shell and Exxon Mobil joined Italy’s Eni in exploration and production agreements with Algeria and Sonatrach to exploit the country’s shale reserves.
Source: http://www.forbes.com/sites/christophercoats/2012/07/23/algeria-takes-solar-steps-with-tender-and-grand-plans/
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| Clouds over the Sahara Desert |
Algerian gas and electricity company, CEEG opened the tender late last month to local and international outfits, marking one step towards a progressive national goal of 650MW by 2015 and building towards 22,000MW by 2030, with output almost evenly split between domestic and export demand. In 2010, the government outlined a $60 billion plan to support the green energy campaign.
Late last year, Algeria’s state-backed Sonelgaz signed on to become the MENA region’s third country to join the Desertec Initiative, a German led effort meant to support renewable energy efforts across North Africa with the eventual goal of supplying substantial energy to Europe. According to a Platts report, the Memorandum of Understanding signed by Algerian officials joins similar efforts in Egypt and Morocco in hopes of producing much-needed anchor projects across the Southern Mediterranean – a move that program advocates hope will help with nailing down financing to move the expansive effort forward.
Algeria’s tender comes as a part of the country’s planned energy diversification effort, intended to both ease over-dependence on traditional resources and reverse a steady decline in oil and gas production seen over the last few years. Despite the country’s substantial proven reserves, Algeria has faced waning interest from international firms recently thanks to a working environment often described as hostile towards outside companies. Contract disputes and a culture of corruption at the state-backed firm Sonatrach, culminating in an expansive leadership shake up last year, have kept new investment and interest low. In one particularly dismal case, a oil and gas license round last year saw only two of ten bids claimed, one of which came from Sonatrach itself.
In any case, a production slowdown would be a problem, but for a country so heavily dependent on oil and gas revenue for basic government spending, it could be a disaster. Algeria currently relies on oil and gas for nearly 98 percent of their export revenue and much of their government spending.
To help cope with the country’s energy situation, the government and Sonatrach have both announced changes to production requirements and the tax code, offering up more favorable terms. The amended terms are intended to both draw back foreign partners and encourage unconventional efforts, including shale projects and renewable options. Earlier this month, Dutch Shell and Exxon Mobil joined Italy’s Eni in exploration and production agreements with Algeria and Sonatrach to exploit the country’s shale reserves.
Source: http://www.forbes.com/sites/christophercoats/2012/07/23/algeria-takes-solar-steps-with-tender-and-grand-plans/
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