Algeria Power Market Size Inclinations & Development Status Highlighted During Forecast Period 2022-2031

The market for Algeria Power is expected to register a CAGR of greater than 8.5% in the forecast period. Factors, such as encouraging government policies, rapid acceptance of domestic solar and wind energy, and pressure to meet power demand due to the increasing population, coupled with rising urbanization expected to drive the Algeria Power Market during the forecast period. Moreover, with the commitment of the government, by 2030, the country intends to have 37% of its installed capacity and 27% of the electricity production intended for domestic consumption from renewables. Additionally, approximately 9 million customers are connected to the country’s electricity network. The length of the electricity transportation network in the country reached 100% in 2019, representing an increase of 240% compared to the length in 2000. On the other hand, with the absence of any new initiatives, the falling interest of investors in 2019, and limited land and limited power capacity by solar and wind energy, hindrance in the growth of the Algeria power market is expected.

– As world start shifting toward renewable energy and country start witnessing a decrease in oil and gas production since 2014, rising domestic consumption and increasing environmental awareness, solar energy has come to occupy a prominent role in the development of the country’s energy mix in recent years. Renewable energy is likely to dominate the Algeria power market.
– With Renewable Energy Target (RET) of 2030, Algeria was aiming to achieve a 27% renewable share in electricity generation. This, in turn, government policy is likely to provide a better opportunity to the Algeria power market in coming near future.
– Algeria has many ambitious renewable projects lined up. With enormous solar energy potential, the country is ready to take a leap in the renewable market. Strong government support to solar power industry likely to drive the Algeria power market during the forecast period.

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Key Market Trends

Non-hydropower Renewables Energy Generation to Dominate the Market

– As of 2018, oil and gas-fired power plants were dominating the power generation sector of the country. The renewables, including the hydropower electricity, accounted for merely 3.85% of the production capacity. Moreover, the PV and CSP account for only 3.2% of the total power generation capacity in the country, but during the next 10 years, solar power plants, cumulatively, are expected to account for about 15% of power generation.
– In order to reduce the dependency on oil and gas, and reduce the CO2 emissions, Algeria is focusing on the development of the renewable sector. Hence, the government is expected to be dependent on renewable energy, mainly on solar power to increase the power generation capacity.
– Moreover, according to the FiT scheme launched in 2014, the base tariffs range from DZD 12.75 per kilowatt-hour to DZD 15.94/kWH for solar PV projects, which reduces the uncertainties in power tariffs, thereby driving the investments in the Algeria solar PV market.
– In addition, Solar PV in Algeria is in the process of transitioning from the utility-scale sector to increased uptake across residential, commercial, and industrial (RCI) sectors. This, in turn, owing to government policies and foreign investment to support renewable energy-based electricity generation is likely to dominate the Algeria power market during the forecast period.

Increasing Adoption of Solar Power Plant in the Country Driving the Market

– The country has limited potential for hydropower generation and has little experience with power generation from renewable resources other than solar and hydropower.
– As of August 2019, Algeria had 5600 MW capacity of solar power plants under construction. To achieve further development of the sector, through the National Renewable Energy Development Programme (PNDER), the government aims to install 22,000 MW of renewable power plants with an investment of USD 34 billion, with solar power accounting for a dominant share.
– However, Algeria aims to increase the share of renewables, the share of the conventional power generation sector is expected to remain over 70% for next 15 years, and the country has significantly higher supply capacity than demand. Hence, the economic argument for the inclusion of wind power as a supporting renewable source for solar power is not as strong in Algeria as it is in western countries.
– Hence, the solar power market is expected to dominate and drive the power market during the forecast period.

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