Late last year, Algeria’s national energy chief said, “We don’t want foreign companies exploiting solar energy from our land.”
That was the Minister of Energy and Mines, Chakib Khelil, pointing to a rejection of the German-led Desertec Industrial Initiative (DII) todraw gigawatts worth of solar power from Algeria’s Sahara Desert in thecoming years and decades.
With companies like Munich-based Siemens (NYSE: SI), German energy giant E.On, and Deutsche Bank (NYSE: DB) collaborating to make Desertec’s Mediterranean grid a reality, Algeria’s neighbor Morocco has eagerly jumped on board.
Yet this July, new Algerian Energy and Mines Minister Youcef Yousfiis reaffirming his predecessor’s pledge to move away from the 400billion euro Desertec project and instead construct a “more important”solar power array over 17,000 square kilometers of desert real estate.
The national utility, Sonelgaz, will Algeria’s status as a leading natural gas producer (#10 worldwide, according to the U.S. Department of Energy) to boost domestic solar cell production with $100 million for a facility to produce 50 MW per year.
That pales in comparison to Morocco’s Desertec-linked plan to use $9billion of joint financing to produce 2 GW of solar power for domesticuse and export by 2020, but Algeria’s independence from the Europeaninitiative could spell new opportunities for investors.
Namely, Algeria won’t be bound to do business with the consortium of mainly German Desertec companies. Even though U.S. company First Solar (NASDAQ: FSLR) joined DII this spring, Algeria is likely to look to China for supply chain integration with companies like Yingli Green Energy (NYSE: YGE).
Algeria is currently in the throes of major national companyleadership changes. 1/5 of Europe’s oil comes from Algerianstate-controlled firm Sonatrach, where an embezzlement scandal inFebruary led to the resignation of Minister Khelil.
There does seem to be continuity, however, in the desire to movetoward clean energy production separately from neighboring Morocco andDesertec.
China, which is donating a $40 million opera house outside thecapital Algiers, has already secured billions of dollars worth ofinfrastructure contracts in Algeria and will certainly look to use itsinfluence and existing connections to give the Chinese clean energy industry a leg up in North Africa.
Watch Algeria for what could be pivotal moves to dictate the pace and winners of the race to develop solar power in the southernMediterranean.
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30 JulClean Energy Sector
Late last year, Algeria’s national energy chief said, “We don’t want foreign companies exploiting solar ...