Speech of Chahar Boulakhras, Managing Director of Sonelgaz

Ladies and gentlemen,

I would like to thank the organizers for the invitation to this conference. I am excited to be here in Cape Town and to take part in this session dedicated to “energy growth”. I am particularly pleased to address a prestigious audience of leading executives, senior government officials and leading researchers to discuss energy industries and their impacts on economic growth and social inclusion.

This is a great opportunity for me to hear different points of view regarding different energy trends as well as briefly expose my country sector growth and potential.

Ladies and gentlemen,

Our continent contains abundant potential in energy resources. These oil and gas resources will be essential to meet growing global demand, especially as fossil fuels will remain dominant in the global energy supply and will cover more than 80% of primary energy demand over the next 20 years. Africa will continue to play an important role in the global supply of fossil fuels.

For African oil and gas exporting countries, energy resources occupy a prominent place in their socio-economic development, since they constitute their main source of foreign exchange.

The strong uncertainties around the oil markets and the fall in hydrocarbon prices explain why these countries, including Algeria, are facing difficulties, accentuated by the strong growth in domestic demand. Studies show that in the long term – looking towards the start of the next century – 40% of the world’s population will live in Africa, which is also the continent most threatened by climate change.

The economic difficulties facing all African countries, including exporting countries, may lead us to believe that concerns about sustainable development will be put on the back burner.

This could not be less true, as efficient energy strategies and policies will provide countries with structural development helping to reach Sustainable Development Goals, which won’t be attained without substantial energy consumption in emerging countries. In all our countries, access to energy contributes to economic prosperity, social well-being and sustainable development. This is a big challenge if we count the 645 million Africans who currently live without electricity.

The challenge is therefore to cover this demand, to create wealth and jobs, to make investments and to ensure economic and industrial development of our countries.

Following this brief introduction, I would like to touch upon Algeria’s initiatives in the energy sector.

Domestic demand in Algeria has changed significantly in recent years. For example, commercial production of primary energy has been maintained globally during the past decade, reaching 165.2 million tonnes of oil equivalent (toe) at the end of 2018.

This development took place while total energy consumption grew steadily, reaching 65Mtoe in 2018 which represents 39,3 percent of total production. Final energy consumption has shown strong increase, reaching 48.1 Mtoe, mainly driven by natural gas, liquefied petroleum gas and electricity.

Regarding electricity, the investments we have already made in conventional power stations to meet demand and our energy policy now includes the development of renewable energies to better prepare for the energy transition out of fossil fuels.

The Algerian experience in access to energy is interesting for more than one reason. The efforts made by the State to strengthen the power generation capacity, but also the transmission and distribution infrastructure of both electricity and gas. Today, all citizens have access to electricity and gas at affordable prices.

The number of subscribers to the power network has increased significantly since the year 2000, from 4.5 to 9.5 million for electricity and 1.4 to nearly 6 million subscribers for natural gas. The State took charge of the electricity and gas connection to achieve total electrification of the Algerian territory and a penetration rate of gas through pipelines. Off grid solutions have also been developed in isolated localities. Since Algeria is a gas producer, natural gas is responsible for more than 97 percent of Algeria electricity production. In order to preserve fossil fuels for future generations, we have also favoured more efficient combined cycle power plants.

At the same time, the effort made for the use of clean products has been followed up by other initiatives, including the widespread use of unleaded gasoline in transport and the use of electricity added to the use of natural gas and LPG (Butane) as fuels.

Ladies and gentlemen,

Renewable energies have become a national priority.

In view of Algeria’s solar potential, its immense territory, our energy transition is focused on the development of renewable energy, particularly through the construction of photovoltaic solar power plants. We have launched an ambitious National Renewable Energy and Energy Management Program which was adopted in 2011 and updated in 2015. We have set ambitious and promising renewable energy targets and we are committed to make the next twenty years the era of the deployment of sustainable energies for the country. The program provides 47 to 51 TWh by 2035-2040.

This program is currently being implemented. We have already completed 22 photovoltaic plants with a total capacity of 350 megawattpeak in the South and the Hauts Plateaux regions. We have also built a 10 MW wind farm and small renewable energy plants operating with different technologies. This installed capacity has allowed us to identify constraints and challenges that could arise in the development of large scale renewable energies.

National skills and capacities in this area exist and our strategy will focus on the development of renewable energies around two components: energy and industrial. This dual strategy seems to us to be decisive since it will favour the large-scale development of renewable installations.

In addition, other investment support measures are planned to support the development of off-grid renewable energies, including applications in agriculture, water resources, individual use and isolated agglomerations.

Our strategy is also based on energy efficiency by aiming to reduce overall energy consumption by 9% by 2030 by improving the energy performance of homes and cities.

We are launching actions in favour of the house insulation systems, low consumption lamps, solar water heaters, sodium lamps public lighting as well as the promotion of clean fuels such as LPG and Compressed Natural Gas.

Another important direction is to create hybrid power plants in isolated networks in the South of the country, with the use of solar energy and wind power; this makes it possible to reduce the fuel consumption in the power plants and the fuels used for its transport and consequently to reduce various pollutant emissions.

More than 50 megawattpeak in renewables will be produced by Sonelgaz to hybridize these currently fuel-based power plants.

Ladies and gentlemen,

On the regional level, Algeria has made significant efforts to consolidate and develop regional energy exchanges, both in the direction of the Maghreb, towards Europe and towards Africa.

We are also involved in the major electricity interconnection projects with our neighbours and the other major projects, in partnership, which resulted in the vast development program.

I would like to state once again our commitment to engaging with more with our beautiful continent full of promises and opportunities. Algeria is continuing its efforts to lead high-scale projects that will boost investment and business opportunities in Africa where access to energy is a major challenge.

We strongly believe in partnerships and win-win cooperation that consists of creating wealth locally and developing the know-how and skills of the human resource. We envisage our partnership with Africa further than the Mediterranean area.

Beyond the projects of electrical interconnections, we wish to extend even further towards Sub-Saharan Africa. We have developed expertise that we can share through partnerships in training, studies but also through the construction of electricity networks, especially in the context of rural electrification.

Improving access to energy in Africa is foreseeable thanks to the small-scale mini-grids that we have already successfully developed in areas that are difficult to access in Algeria. We have also made progress in the production of small and large power turbines, control systems, alternators, transformers, insulators, etc.

However, all these opportunities can only be realized if we can create an area of shared prosperity. From this point of view, we consider renewable energies as an opportunity given to Africa to reduce unemployment, improve social inclusion, and economic injustice between countries.

These are conditions that will consolidate the security of our people and local development. Once again, long-term partnerships must be envisaged to ensure that sustainable development is no longer limited to each country individually.

The development of Africa must be planned out on a continental perspective including large-scale key projects..

Ladies and gentlemen, the development of Africa can be understood as such only if it benefits everyone.

Thank you for your attention.