Algeria and Netherlands Deepen Energy Ties, Focus on Hydrogen
Takeaway
The deepening energy cooperation between Algeria and the Netherlands presents opportunities for European utilities and energy companies. Companies like Shell and other Dutch firms with expertise in hydrogen technologies could find attractive investment prospects in Algeria's burgeoning renewable energy sector. Investors should closely monitor the development of Algeria's hydrogen infrastructure and its progress towards achieving its 2040 export targets.
Algeria and the Netherlands are strengthening their bilateral cooperation in the energy sector, with a particular emphasis on renewable energy and hydrogen. Minister of Energy and Renewable Energies, Mourad Adjal, met with the Ambassador of the Kingdom of the Netherlands to Algeria, Anne Elisabeth Luwema, to discuss opportunities for collaboration in these strategic areas. The meeting, held in Algiers, served as a platform to explore avenues for enhancing partnerships in energy transition, renewable energy projects, and hydrogen development.
This collaboration aligns with Algeria's broader strategy to diversify its energy mix and become a key player in the global hydrogen market. In March 2023, Algeria introduced its National Hydrogen Strategy, with the goal of supplying 10% of Europe's hydrogen demand by 2040. This strategy includes producing 30 to 40 terawatt-hours (TWh) of hydrogen and its derivatives for export. Algeria is also targeting 10 GW of electrolysis capacity for large-scale hydrogen production. The country aims to export 1 million tonnes of hydrogen per year by 2040.
Algeria possesses significant renewable energy potential, particularly in solar, with some of the highest solar irradiance levels globally. The country's renewable energy strategy envisions installing 15,000 MW of renewable capacity by 2035. Algeria plans to generate approximately 27–30% of its electricity from renewable energy sources by 2035 and aspires to 100% green energy production by 2050. The country has already launched an ambitious plan to produce 15 GW of renewable energy and attract investment for green hydrogen ventures.
The partnership between Algeria and the Netherlands could benefit both countries by combining Algeria's renewable energy resources with Dutch expertise in hydrogen technologies. Dutch companies, including Shell, Oxycom, and Impact Hydrogen, have already expressed interest in Algeria's renewable energy and hydrogen market. The Netherlands Enterprise Agency (RVO) is also supporting the "Hydrogen Valley" project in Algeria. This collaboration may lead to increased foreign investment in Algeria's energy sector and the development of new industries.
Looking ahead, further discussions and agreements are expected to solidify the energy partnership between Algeria and the Netherlands. The development of the SoutH2 Corridor, a 3,300 km pipeline to transport up to 4 million tonnes of green hydrogen annually to Europe by 2030, is a key project to watch. The involvement of Sonatrach and Dutch companies in this project will be crucial for its success. Investors should monitor the progress of Algeria's National Hydrogen Strategy and the implementation of renewable energy projects to assess the long-term potential of this partnership.