Algerian government expects reference price of $0.04/kWh for 4 GW solar tender


The Algerian Minister of Energy Noureddine Boutarfa has revealed that he expects that the reference price for the upcoming tender for 4 GW of solar capacity will not exceed 4 DZD/kWh (approximately $0.04/kWh).

Local newspaper Le Chiffres d’Affaires reports that Boutarfa stressed that the price for projects selected in the tender will be considerably lower than 20 DZD/kWh, the price at which a newly commissioned 3 MW PV plant in Djanet is selling power to the local grid.

Furthermore, Boutarfa said the tender is not being delayed, but added that the government does not want to act under pressure. According to the government’s previous announcements, the Request for Proposal (RfP) for the tender was expected to be issued between the end of March and the beginning of April.

Commenting the possibility of such a reference price, Adel Baba-Aissa, director of U.K. company Renewable Energy Partner that is active in the Algerian market, told pv magazine: “4DAs/KWh, which is equal to approximately US$ 4 cents is a number we have seen reached in other markets for similar tenders. So in essence this is not an unrealistic benchmark. However, the apparent requirements of the tender in Algeria regarding local content and local manufacturing allied to the fact that this is Algeria's first foray in the solar IPP market suggests that the prices for this first round are likely to be higher.”

A tender of similar magnitude (1 GW) recently held in Turkey, which also included the construction of PV component factories in the country, was won by a Hanwha Q Cells-Kalyon Enerji joint venture at a price of $0.0699/kWh.

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The Algerian tender will be conducted by CEEG SpA, a subsidiary of Algerian state-owned electric and gas utility Sonelgaz (National Society for Electricity and Gas), in three, 1,350 MW phases.

The tender will enable the construction of several large-scale PV plants in the region of Hautes Plaines (High Plains), which is located in the northern part of the country, and also in southern Algeria.

Algeria aims to cover 27% of its electricity demand with renewable energy by 2030. The country expects to reach this goal by installing 22 GW of renewable energy power stations, of which 13.5 GW will come from a PV source.

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