Algeria Will Commence 1GW Solar Tender Between June and July 2021

published: 2021-05-31 9:30 | editor: | category: Analysis

Algeria’s Ministry of Energy Transition and Renewable Energies has announced that the country’s long-awaited 1GW solar tender will be launched between June and July this year. Earlier in late April, Chems-Eddine Chitour, who heads the ministry, received the authorization from the Algerian government to manage and supervise the auction and procurement process.

According to the coverage of this event by news agencies and media outlets, the 1GW of allocated generation capacity will be further divided into 10 portions that are each 100MW. The tendered projects will be developed under the IPP model, and foreign investors are invited to participate in the development process. Mouloud Bakli, president of Club Energia, told an energy news outlet that the government is drafting PPAs for specific tendered projects, and these contracts may be “dollar-linked”. Club Energia is a local energy industry association. The government is also implementing domestic content requirements for the tender so as to increase local economic benefits.

Last May, the Algerian government launched a program called Tafouk 1 to increase the domestic PV generation by 4GW by 2024. The amount of money that will be invested into the program is projected to reach US$3.2-3.6 billion. The government has also projected that the program will create around 56,000 jobs related to the construction of solar projects and 2,000 jobs related to the O&M of solar projects. Hence, there is a high probability that the Algerian government will hold three more solar tenders that are similar in scale over the next three years.

In 2015, the Algerian government implemented its National Renewable Energy and Efficiency Development Plan to diversify its energy mix. The ultimate aim of the plan is to increase the domestic renewable generation capacity to 22GW, or 27% of the total domestic generation capacity, by 2030. Of that amount, solar PV is projected to comprise more than 13.5GW. In 2019, the Algerian government held two tenders for off-grid solar projects and hybrid solar-diesel projects.

Data from IRENA show that Algeria’s installed PV capacity came to just 423MW at the end of 2019. Since the country is a major oil and gas producer, most of its existing power plants are thermal power plants that burn fossil fuels.

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