Energy is central to Algeria’s development model. The electricity system is dominated by natural gas which accounts for more than 95% of installed capacity estimated at 25 to 26 GW. Solar and hydropower together represent less than 2% of the mix despite some of the world’s highest solar irradiation levels in the Saharan regions. The national renewable energy strategy aims for 4 000 MW of solar capacity by 2030 and 15 000 MW by 2035, marking a major shift toward cleaner energy sources. The national grid faces challenges including aging infrastructure, limited digitalization, bottlenecks in remote regions and significant transmission and distribution losses estimated at 15%. Modernizing the grid is essential to meet rising demand and integrate large volumes of renewable energy.
Economic Contribution
Electricity access reaches 99% of the population and supports industrialization, urban growth and improvements in living standards. Annual electricity consumption stands at 75 to 80 TWh and continues to increase due to population growth, industrial expansion and digitalization. Domestic natural gas consumption exceeds 55% of national production, limiting export revenues especially during periods of high international prices. Expanding renewable energy would free additional gas for export, reduce production costs and enhance reliability for key sectors such as manufacturing, agro processing, mining and digital services.
Outlook
Algeria plans to accelerate solar deployment, promote hybrid systems for remote regions, modernize transmission and distribution networks, adopt smart grid technologies, strengthen regional interconnections and encourage private investment through independent power producer mechanisms. Reducing grid losses from 15% to below 10%, upgrading substations and digitalizing grid operations will be essential to improve efficiency. A more balanced and resilient energy system will support industrial growth, enhance competitiveness and strengthen long term economic stability.
