Thermal power to dominate Algeria’s generation mix through 2035 despite renewable push

Core Insights - Algeria is accelerating its energy transition, supported by government policy, strong renewable energy potential, and sustainability targets [2] - Despite ambitious renewable targets, thermal power capacity, particularly gas-fired power, is projected to dominate the power generation mix, accounting for 85.2% by 2035 [2] - The reliance on natural gas for power generation is significant, with thermal power expected to represent 72.4% of total power capacity by 2035, down from 97.5% in 2025 [3] Market Dynamics - Algeria's electricity supply security is a concern due to increasing demand amid economic diversification and energy transition, although ample gas reserves mitigate immediate supply risks [6] - Long-term reliance on natural gas exposes the system to vulnerabilities, including export pressures and internal disruptions, which could affect supply security [6] - Public funding for new energy projects is often contingent on oil and gas revenues, leading to potential delays or reductions in project scale during periods of low global energy prices [7] Investment Landscape - Natural gas is the primary energy source for Algeria's power generation, with the Hassi R'Mel gas field being a key asset [8] - The lack of a competitive market and transparent regulatory framework hinders independent power producers (IPPs) from investing in renewable energy projects [9] - Issues such as undefined power purchase agreements (PPAs) and local content mandates add complexity and risk for potential investors in the renewable sector [9]