SolarPACES START Mission to Algeria, 2003

Report on the
SolarPACES START Mission
to Algeria
September 14-18, 2003

edited by
Michael Geyer
IEA SolarPACES
Executive Secretary

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START Mission to Algeria, 2003 SolarPACES

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SolarPACES START Mission to Algeria, 2003

1 Introduction

During the week of September 14 to 18, 2003 a START

(Solar Thermal Analysis, Review and Training) team com-
posed of IEA/SolarPACES representatives and observers
from Germany and the US visited Algeria. The Mission host
was the New Energy Algeria (NEAL) located in Algiers. The
purpose of the START mission was to brief NEAL and the
invited experts from the Ministry for Energy and Mines, the
Algerian power sector and the interested industry on the
current techno-economic status of solar thermal tech-
nologies and discuss the next steps in building Algerias’s
first large solar thermal power plant.

Scope of Solar Thermal Analysis Review and Training

(START) Mission to Algeria

• Information exchange with Algerian energy ex-

perts on solar thermal technologies applicable in
Algeria

• Visit of sites in the El Oued region, previously in-

vestigated by NEAL experts

• Identification of solar thermal power project op-

portunities and first review of financial and eco-
nomic conditions by START experts

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NEAL, together with the Algerian Ministry of Energy and

Mines, organized a Solar Thermal Power Workshop, which
included START Team presentations on technology, eco-
nomics, project options, and possible sites. NEAL and MEM
officials presented information on the Algerian power
market, including development of electricity demand and
generation and capacity planning. Special emphasis was
given to the ongoing privatization activities and the future
role of IPPs in the Algerian power sector.

START Mission Starting Point

• Starting with the adhesion to SolarPACES in 2003,

the Democratic Republic of Algeria NEAL is working
intensively with SolarPACES for the implementation
of solar thermal power in the country, with highest
level support from the Ministry of Energy and Mines.

• Requested project structure is a privately financed

and operated independent power plant (IPP) with
a parabolic trough field integrated into a gas fired
combined cycle.

• The sites reviewed by the START team in the El Oued

region were preselected by NEAL

With 2.381.741km² of land area, Algeria is by far the

largest country of the Mediterranean. Over 70% of its area
are South of 20° latitude. According to a study of the
German Aerospace Agency, Algeria has with
1’787’000km² the largest long term land potential for con-
centrating solar thermal power plants. The Centre de Dé-
veloppement des Energies Renouvelables (CDER) summa-
rized the available insolation measurements in Algeria.
According to the irradiation maps presented, total annual
direct normal irradiation ranges from 2100 kWh/m²yr to
over 2700 kWh/m²yr and is counted among the best inso-
lated areas in the world.

Algeria has 160 trillion cubic feet of proven natural gas

reserves, ranking it in the top 10 worldwide. Since 1964 Al-
geria became the world's first LNG Liquefied Natural Gas
producer in the world. Algeria was the second largest ex-
porter of LNG in 1998, with 22% of the world's total. After a
complete renovation of its LNG facilities, however, Alge-
ria's LNG production capacity will become even higher.

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SolarPACES START Mission to Algeria, 2003

Algeria’s solar potential and land resources are opti-

mal for the implementation of solar thermal power
technologies

• Most desert areas in Algeria’s offer direct normal in-

solation above 2100 kWh/m²yr

• The best sites, in the southern part of the country,

exceed 2500 kWh/m²yr

• It is estimated that within 50 km from required infra-

structure (roads, grid) accessible sites have huge
potential far in excess of present consumption.

• The START team recommends that direct normal

radiation stations be setup at the sites of interest

Within its policy of climate and environment protection,

the Algerian Ministry for Energy and Mines fully supports
the objective of the CSP Global Market Initiative (GMI) to
facilitate and expedite the building of 5,000 MWe of CSP
worldwide over the next ten years. The Government of
Algeria has committed itself to develop solar energy as its
largest renewable energy source, to cover 5% of the na-
tional electricity needs by 2010 with renewables. The Gov-
ernment of Algeria sees ideal opportunities of combining
Algeria’s richest fossil energy source – the natural gas –
with Algeria’s most abundant renewable energy source –
the sun – by integrating concentrating solar power into
natural gas combined cycles. Incentive premiums for CSP
projects are granted within the framework of Algeria’s
new Decree 04-92 of March 25th, 2004 relating to the
costs of diversification of the electricity production. The
incentive premiums of this decree shall attract private in-
vestors to implement integrated solar combined cycle
plants in Algeria. According to the current power expan-
sion planning of the Ministry for Energy and Mines, the ca-
pacity targets for CSP power implementation in Algeria
are 500 MW of new ISCCS plants until 2010. With these CSP
targets and the new Decree 04-92, Algeria has established
the necessary GMI commitment on national solar thermal
power market implementation. As the next GMI step to be

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agreed at the Renewables 2004 Conference in Bonn, the

Government of Algeria pledges to develop a framework
for solar thermal electricity export from North-Africa to the
European Union

For a first solar thermal IPP, the START team recom-

mends the implementation of an Integrated Solar
Combined Cycle

• Algeria has 160 trillion cubic feet of proven natural

gas reserves, ranking it in the top 10 worldwide

• 6 GW of capacity of power plants are currently in-

stalled. From 2004 on, additional capacity of 200-
300 MW will be required every year.

• High Voltage connections with Spain and Italy are

envisaged for export of clean solar and gas elec-
tricity to Europe.

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2 General Information about

the Republic of Algeria

Algeria is located in North Africa and is bordered by

Morocco, Mauritania, Mali, Niger, Libya and Tunisia. It is
situated between latitudes 18° and 36’ North. The country
is organized in 48 provinces (wilayas).

Figure 1: General Map of the Republic of Algeria

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With its 2.381.741km2 of total Land area, Algeria is by far

the largest country of the Mediterranen. Over 70% of its
area are South of 200 latitude. According to a study of the
German Aerospace Agency on “Solar Thermal Power
Plants for the Mediterranean”, Algeria has with
1’787’000km2 the largest long term land potential for con-
centrating solar thermal power plants.
Algeria established a strong record of implementation
under the stabilization and structural adjustment programs
started in 1994 with the support from the IMF and the
World Bank. Successful stabilization in the face of volatile
oil prices, and some progress in structural reforms, have
laid the basis for a growth recovery.
From 1999 to 2003, real GDP grew by 3.8 per cent a
year, on average, essentially led by the oil sector per-
formance, which grew by 4.3 percent during the same
period. The non-hydrocarbon-non-agricultural sector grew
by 3.3 per cent, led by a strong 5 percent real growth in
value added from private manufacturing industries. In
2003 alone, GDP growth reached 6.8 per cent, the highest
rate in the last five years, on the account of higher oil pro-
duction and an extraordinarily good agricultural output
performance related to good weather.
Fiscal and current account deficits turned into sizable
surpluses since 2001, owing to higher oil prices, and infla-
tion fell from over 20 percent in 1994 to 2.6 percent in
2003, owing to tighter demand management. Annual
budgets are currently prepared on the basis of a modest
oil price assumption, and a Revenue Stabilization Fund,
established since mid-2000 to accumulate oil windfalls,
has helped the authorities build a resource cushion.

In April 2001, the government launched an Economic

Recovery Program (ERP) for 2001 - 04 to boost aggregate
demand and generate jobs through public investment in
infrastructure and support to agricultural production and
to small-and-medium enterprises. The ERP aimed at
spending DA525 billion (about 13 percent of the 2000
GDP) over 2001 - 04, in addition to the regularly budgeted
capital outlays. A more recent hike in public expenditures
was associated to reconstruction needs following the May
2003 earthquake. The increase in public spending turned
the 9.9 percent of GDP fiscal surplus in 2000 into a 1.3 per-
cent of GDP deficit in 2002, but by 2003 a fiscal surplus of 3
percent was recorded on the account of higher oil reve-
nues.

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Algeria has made progress in improving its social indi-

cators during the past decade. While 14% of the popula-
tion (or around 4 million people) were poor in 1995, by
2000 the rate may have dropped somewhat as a result of
increased public expenditure, increased social transfers,
and some recovery of the private non-oil industrial sector
which led to an increase of income. Poverty incidence in
rural areas is more pronounced than in urban areas. Life
expectancy increased from 56 to 71 years from the early
1970s to 2002, while the number of children dying before
age one decreased from 120 to 39 (per 1,000 live births).
Educational improvements resulted in a decrease in illiter-
acy from 36 percent to 22 percent for men from 1990 to
2002, and from 59 percent to 40 percent for women.

Following a territory development law passed in De-

cember 2001, an integrated development scheme for
2020 has been laid out, encompassing the construction of
marine, air, and road infrastructures. The scheme, being
executed under the auspices of the Ministry of Public
Works, is the largest infrastructure development plan yet
undertaken in Algeria. The scheme makes infrastructure
spending the largest slice of the government’s 2001-2005
$7 billion economic stimulation package. Master plans
have been drawn up for roads and highways, harbors and
airports.

The biggest of these will be the roads and highways

development program. Currently 85% of Algeria’s trade
goes through the country’s 100,000-plus km road network,
but the road system remains disjointed and suffers form
major bottlenecks around the key commercial centers. In
order to cope with the increasing traffic and enable bet-
ter access to the more remote areas of the country, the
Ministry has undertaken the construction of the East-West
highway, which is the most ambitious and strategic under-
taking under the master plan and set for completion by
2008/2009. At 1,216 km, the highway will stretch from the
Moroccan border in the West to the Tunisian border in the
East with a total development cost of $7 billion. The East-
West highway is also designed for integration into the
Maghreb Highway encompassing Morocco, Algeria, Tuni-
sia, Libya, and potentially Egypt. The construction of the
highway will generate approximately 100,000 jobs.

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3 The Algerian Energy Sector

Algeria is one of the most important oil and gas pro-
ducers and exporters in the world. Algeria also is a mem-
ber of OPEC and with a 25 % share of the European gas
market a very important energy source for Europe. In the
year 2000 the petrochemical industry contributed a 40.8 %
gdp share. 97.1 % of the Algerian export goods consisted
of petrochemical products in 2000.

1.1 Oil and Oil Production

Despite the fact that Algeria first discovered oil back in
1956, the National Council of Energy believes that the
country still contains vast hydrocarbon potential. Algeria is
considered to be under-explored. Over the last few years,
significant oil and gas discoveries have been made by
Sonatrach in cooperation with foreign companies, who
now hope to increase Algeria's crude oil production ca-
pacity significantly over the next few years. In order to ac-
complish this, Algeria will require significant amounts of
foreign capital and expertise. Energy minister Chakib Khelil
has stated that his goal is "to double the number of com-
panies operating in Algeria over the next five years." Minis-
ter Khelil has also expressed his view that the industry
needs to be restructured.
Algeria's proven oil reserves remain at 9.2 billion barrels,
but are expected to be revised upward in coming years.
Algeria should also see a sharp increase in crude oil ex-
ports over the next few years due to a rapid shift towards
domestic natural gas consumption and planned increases
in oil production. Algeria's Saharan Blend oil is among the
best in the world.
Huge projects are on the way, investments of several
billion US$ per year are being made by around 25 foreign
firms from 20 countries in close cooperation with their Al-
gerian partners.

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1.2 Natural Gas

Algeria has 160 trillion cubic feet of proven natural gas
reserves, ranking it in the top 10 worldwide. Several con-
tracts with hundreds of millions of dollars are going to be
concluded for investments in the gas industry. Feasibility
studies are on the way to build a new gas pipeline linking
Algeria directly to Europe via Spain.
Billion dollar contracts have been signed to develop 7
of 12 existing gas fields in the In Salah area. Other highly
valuable investments are under way.
Since 1964 Algeria became the world's first LNG Lique-
fied Natural Gas producer in the world. Algeria was the
second largest exporter of LNG in 1998, with 22% of the
world's total. After a complete renovation of its LNG facili-
ties, however, Algeria's LNG production capacity will be-
come even higher.

1.3 Mining
Algerias mining industry makes raw materials available
to industry. The increasing need for energy and raw mate-
rials calls for reliably and precise prospecting and explora-
tion procedures as well as the necessary equipment. With
more than 30 different raw materials, mining activities in
Algeria are very diversified.
Besides ancient deposits of iron, selenium, zinc, lead,
barium and marble, vast deposits of gold, tungsten, tin,
silver, diamonds, mercury, raw earths, raw metals, precious
stones and semi-precious stones have been discovered in
recently conducted research efforts. (source: Website of
Algerian Ministry of Energy and Mines)

1.4 Electricity
Algeria's electricity demand is growing at a rapid, 5%-
7% annual rate, and will, according to Sonelgaz, require
significant additional capacity -- possibly 8,000 MW by
2010 -- in coming years. Currently, Algeria has around
6,000 MW of installed power generating capacity, but this
has not been sufficient to reach demand during peak
cooling periods in the summer. In July 2003, power and
water shortages led to rioting and demonstrations in the
country. Currently, the Algerian government is pushing
power conservation measures. In the longer-term, how-
ever, Algeria's power sector will need to grow. This will re-
quire billions of dollars worth of investments in new gener-

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ating capacity, plus transmission and distribution infra-

structure (i.e., lines and sub-stations).
Unit= 10 9 KWh 1998 1999 2000 2001 2002
Thermal steam 13,65 14,73 15,756 15,96 16,2
Thermal gas 8,63 9,15 8,829 9,82 10,79
Hydraulic 0,18 0,2 0,054 0,07 0,06
Diesel 0,31 0,34 0,368 0,41 0,35
TOTAL 22,77 24,42 25,007 26,26 27,4
installed Capacity (MW) 5557 5801 5922 5927 6345

PMA (MW) 4313 1183 4617 4791 4965

Operating Duration (H) 5281 5314 5337 5396 5416

Table 1: Production Shares by Origin (source www.sonelgaz.dz)

Figure 2: Production Shares by Origin (source www.sonelgaz.dz)

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Figure 3: Electricity Production and Sales (source www.sonelgaz.dz)

Sonelgaz is the sole, state owned generation, transmis-
sion and distribution utility. Sonelgaz also distributes gas
throughout the country. Recent legislation has, however,
opened the door for independent power producers to
enter the market. The majority of installed capacity is
thermally fired (95.3%) with the remainder hydro powered.
As of December 31st, 2003, Sonelgaz operated 6345 MW
of which :
• 6039 MW for the network inter-connected é
• 306 MW for the networks isolated from the South..
This capacity was distributed amongst the following
categories :
• Steam Turbines (43,29% ): 2740. 20 units with indi-
vidual rating varying between 50 MW and 196
MW.
• Gas Turbine (49,55%): 3152 MW. 84 units with indi-
vidual rating varying between 20 MW and 210
MW
• Hydraulic (3,39%): 280 MW. 34 units with individ-
ual rating varying between 1 MW and 50 MW for
low falls and between 12 MW and 50 MW for
high falls. (High falls: 209 MW and Low falls: 69
MW)
Diesel (2,77%): 175 MW. 183 units with individual rating
varying between 0.35 MW and 8 MW. The units of this
category are installed in the South and feed separated
networks.
The transmission network operates at 50, 345, 220, 90
and 60 kV. The transmission system consists of around 11
000 km of line and 115 transmission substations. There are
international transmission links with Morocco and Tunisia.
In February 2002, legislation passed by Algeria's parlia-
ment ended Sonelgaz's monopoly over electric power
generation, transmission, and distribution, converted the
company into a joint-stock company, and cleared the
way for Algeria's first independent power projects (IPPs).
However, further legislation which would allow Sonatrach
to operate along commercial lines is stalled at the mo-
ment.
In May 2001, Sonatrach and Sonelgaz established a
joint venture -- the Algerian Energy Company (AEC) -- to
export electricity. Among other projects, AEC is examining
the feasibility of establishing a trans-Mediterranean power
link to Italy. In December 2001, Sonelgaz signed a joint
venture agreement with Italian power grid manager GRTN

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on the possibility of constructing an undersea power ca-

ble to export electricity to Europe via Sardinia or Sicily. In
November 2001, Sonelgaz signed a similar deal with
Spain's power group Red Electrica de Espana to build an
underwater power line between Algeria and Spain. Cur-
rently, Algeria has two links to the Moroccan electricity
grid and supplies over 550 gigawatthours (GWh) of elec-
tricity to Morocco. In December 2003, a draft agreement
on integrating the Maghreb and European power grids
was signed in Rome.

Figure 4: Electricity Transmission Networks in Algeria (Source. Sonelgaz)

Sonatrach has a $107 million contract with Anadarko
and Italy's GE Nuovo Pignone to build the country's first
privately financed natural-gas-fired power plant at Hassi
Berkine. GE Nuovo Pignone, a subsidiary of General Elec-
tric, will also provide a gas treatment system, liquid fuel
gas turbine storage and services. In July 2003, Canada's
SNC Lavalin was awarded contracts to design and build
an 825-MW combined cycle power plant in Skikda. The
U.S. Export-Import Bank has agred to provide export guar-
antees, since a U.S. subsidiary of Lavalin is exporting GE
gas-fired turbines and providing engineering services for
the project, which is expected to come online in the third
quarter of 2005. In August 2003, France's Alstom won a

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contract to construct a 300-MW power plant at F'Kirina,

around 300 miles east of Algiers.

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4 Prospects for CSP in Algeria

With 2.381.741km² of land area, Algeria is by far the
largest country of the Mediterranean. Over 70% of its area
are South of 20° latitude. According to a study of the
German Aerospace Agency, Algeria has with
1’787’000km² the largest long term land potential for con-
centrating solar thermal power plants.
Meanwhile both the Algerian government and the pri-
vate sector are aware of Europe's commitment to renew-
able energy sources, in particular the European Union's
aim to have 17% of renewable energy in 2010's energy
mix. Internally, Algeria has also taken on its own commit-
ment, with an aim of increasing the solar percentage of its
energy mix to 5% by 2010. But beyond this Algeria is look-
ing for a close partnership with the European Union so that
Algerian plants may help deliver the green energy
needed for Europe to meet its targets. To bring these plans
to reality, and to enhance the participation of the private
sector - both local and international - a new company
has been created. In July 2002, Sonatrach and Sonelgaz
formed a new, renewable energy joint venture company,
called New Energy Algeria (NEAL). NEAL will look at devel-
opment of solar, wind, biomass, and photovoltaic (PV)
energy production. One project reportedly under consid-
eration is a 120-MW hybrid natural gas/solar power plant
and a wind/diesel/PV facility at Timimoun. In January 2003,
Algeria and the International Energy Agency agreed on
technological cooperation in developing solar power.
Overall, Algeria is aiming at a 5% share for solar in the
country's electricity mix by 2010.

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Figure 5: Annual direct normal insolation (DNI) as computed from METEOSAT

NEAL is to promote renewables in Algeria and help in:

• cost effective power plant development to

promote access to energy to the whole popula-
tion

• technical, economic and financial support for

plant development

• more efficient use of the country's gas reserve

NEAL's interest in CSP is the result of an analysis of
national strengths, as Algeria benefits not only
from abundant solar radiation but also from an
available gas supply.

Consequently the concept chosen by the company's

shareholders is the Integrated Solar Combined Cycle Sys-
tem (ISCCCS). NEAL's first initiative is to build a new 140
MW ISCCS power plant with 30 MW of solar output. Due to
political will, the aim is to have it ready by 2006.

While preparing for near-term supply of solar thermal

power, NEAL is also working to develop the demand infra-
structure within Algeria. The company is working closely
with the legal department of the Ministry of Energy to
have a law adopted that will provide proper incentives for
renewable energy sources. This will underpin the eco-
nomic viability of projects involving renewable energy
sources. Going further to help promote renewable energy,
Algeria has already decided on and is in the process of
establishing a green certificate market.

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Figure 6: Gaspipeline links from Algeria to Europe

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Figure 7: Envisaged Networking of the High Voltage Elec-

tricity Transmission Lines Between the Maghreb Countries
and Europe

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5 Legal Framework for CSP

NEAL explained the following articles of the Law 02-01 of
February 5th, 2002, on Electricity and Gas that need to be
observed for the implementation of the first Hybrid Solar
Gas Project (HSGP).

Article 26. — In pursuance of the energy policy, the regu-

lation commission may undertake measures aimed at or-
ganising the market with a view to insuring a normal sale
in the market, a minimum price of a minimum volume of
electricity produced from renewable energy sources or
cogeneration systems. Overcosts resulting from such
measures may be the object of funding by the Govern-
ment or borne by an electricity and gas fund and in-
cluded in the prices

Article 26. — Energy quantities which will be sold on the

market and aimed at encouraging renewable energies or
cogeneration must be the object of a tender set out by
legal ways

Article 95. — Producers using renewable energies and/ or

co-ogeneration can benefit from premiums. These premi-
ums shall be considered as diversification costs in confor-
mity with article 98 hereunder.

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SolarPACES START Mission to Algeria, 2003

Article 98. — Prices referred to in article 97 above include

the following parameters:

• The production cost of electricity set according to

the kilowatt/ hour average price on the electricity
market during a reference period set by legal ways;

• Costs relative to electricity distribution and transmis-

sion;

• Marketing costs;

• The electric system marketing costs;

• Diversification costs;

• Prices may take into account incentives aimed at

energy saving.

Article 103. — For electricity and gas, eligible clients shall

pay the costs of necessary activities for energy supply and
participate in the coverage of the permanent costs of the
systems and diversification costs

NEAL also reported about a project of a new decree that

will specify the terms and conditions of special incentives
for the production of solar electricity with integrated solar
combined cycles. This decree was later published on
March 28, 2004, in the Official Journal of Algeria Number
19 as “Decret Executif 04-92” corresponding to the diversi-
fication cost of electricity production.

This decree establishes a premium for the total electricity

production by an HSGP project, depending on the
achieved solar share as documented in the following fac-
simile copy of Article 12 of this decree, ranging from a
100% premium for a 5-10% solar share up to a 200% pre-
mium for a solar share beyond 200%.

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Figure 8: Facsimile Copy of Article 12 on CSP Premiums in

Decree 04-92, published on March 28, 2004, in the Official
Journal of Algeria Number 19

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6 The Hybrid Solar Gas Project

proposed by NEAL

With the implementation of the first Hybrid Solar Gas Pro-

ject (HSGP), NEAL intends to achieve the following objec-
tives:
• Promote renewable energies with the maximum
probability of success
• Establish the credibility for the ability to export solar
electricity
• Create a real market that will eliminate the incre-
mental costs over the next ten years
• Enable local market players on the path of market
deregulation within the framework of the new law
about electricity and gas
• Translate the political will into a specific project
• Contribute to the long term coverage of the na-
tional energy demands with renewable resources
and conserve the gas resources

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 START Mission to Algeria, 2003 SolarPACES

• Increase the gas export potential to the gas con-

suming economies

Figure 9: Scheme of 400MW Hybrid Solar Gas Project proposed by NEAL

The HSGP shall be realized in the Framework of the « De-

cret Executif 04-92 ». It shall contribute to achieve the ob-
jective of 5% electricity production in 2010.
The parabolic trough technology has been selected,
since it has proved its maturity in the over 300MW of
commercial parabolic trough plants in California since the
1980’s and it also will be the chosen technology for most
of the upcoming CSP plants in Spain.
The hybrid operation has been chosen in order to elimi-
nate the need for storage and reduce cost of the first
plant. It also will provide the plant with a power capacity
that will give credibility to the project and to reduce the
transaction cost. It further will activate synergies between
the gas and solar operation that will open opportunities
for revalorization of marginal or depleted gas fields. It fi-
nally may give an opportunity to replicate the techno-
logical experience gained in the Skikda combined cycle.
The Skikda combined cycle has 363.4MW capacity and
utilizes a Frame 9 gas turbine from General Electric. The
minimum solar share (>5%) required by decree 04-92
would result in a 359.000m² solar field of equivalent size of
71MW electric. For cycle cooling, a minimum of 3.2m³/s
would be required, that would need to be secured by the
ministry for water resources.

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SolarPACES START Mission to Algeria, 2003

The following annual electricity production is estimated

for such an 363.4MW HGSP project:
• 2,834,520 MWh/a for the combined cycle part
based on 7800h/a operation
• 163,300 MWh/a for the solar part based on
2300h/a operation. This solar output would cor-
respond to a solar share of 5.44% of the total
production.
The 163,300 MWh/a would save annually 42.5 million m³
of natural gas. The 500MW of renewable energy envis-
aged for 2010 would save 300millions de m³ of gas per
year an avoid 575,000 tons of CO2 per year.
Combined with a desalination plant, the project could
provide 250,000m³ of desalinated water per day.
The total investment cost were estimated to be 286 mil-
lion USD as broken down in the following table, of which
69 million USD would be in local currency and 160 million in
foreign currency.
The project would be tendered as a BOO project, in
which the final offer would be the price of the Kilowatt
Hour of electricity for the total project as required in the
decree 04-92.

Investment Cost Thousand USD

Site 0
Engineering 11.753
Equipment 160.178
Construction 63.114
Interests 19.911
Reserve Fonds 15.500
Freight 500
Miscellaneous 7.051
Taxes and Customs 8.009
TOTAL 286.017

Table 2: Breakdown of investment cost of the 400MW

HGSP as estimated by NEAL

400MW Power Block Thousand USD

Combustion Turbine 47.100
HRSG 13.100
Steam Turbine 16.281
Mechanical Equipment 28.575
Civil and structural 8.775
Construction 16.600

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TOTAL 130.431

Table 3: Breakdown of Power Block cost of the 400MW

HGSP as estimated by NEAL
Power Block's Incremental Cost
Steam Turbine 1.840
Steam Turbine Works 15
HP, LP and IP piping 751
Condenser 237
Condensate Pumps 34
Circulating water pumps 151
Mechanical draft loading water 242
Loading water concrete, form work 79
Circulating water pipes 65
Main power transformers 340
Additional construction cost 313
Additional freight 48
Total Direct Cost 4.115
Indirect Cost 378
Contingency 181
TOTAL 4.674

Table 4: Breakdown of Power Block Incremental cost of

the 400MW HGSP as estimated by NEAL

Solar Field
Solar Field Size 359'000m²
Site work / Infrastructure 880
Collectors
Heat collection element 15.389
Line concentrating device 16.581
Metal support structure 21.823
Drives 4.364
Interconnection Piping 1.923
Electronic&Control 1.798
Header Piping 2.138
Pylon Foundation 3.877
Other Civil Works 2.491
Spares 1.824
Freight/Transport 1.028
HTF System
HTF Fluid 3.139
HTF Expansion Vessels 2.422
HTF Pumps 2.841
HTF Equipment freight 180
Total Direct Cost 82.698
Indirect Cost 7.410
Contigency 3.562
Total Solar Field Cost 93.670

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SolarPACES START Mission to Algeria, 2003

Table 5: Breakdown of Solar Field Incremental cost of the

400MW HGSP as estimated by NEAL

Investment Cost
Power Block / CCGT Turbine
134MW 130.431
Power Block Incremental Cost 4.674
Solar field investment cost 93.670
Balance of Plant including land 6.266
Total Project Investment Cost 235.041

Table 6: Breakdown of total investment cost of the

400MW HGSP as estimated by NEAL

The HSGP project will be of Independent Power Project

(IPP) type with project finance. The equity will represent
nearly 25% of the global investment. NEAL reported on the
following project securities:
- a gas sales contract in accordance with the local
supply conditions to other similar projects
- a purchase electricity contract of 15 years term in
accordance with Law 02-01 and Decree 04-92.
- a water purchase contract
From the first step up to the start up, NEAL envisaged
the following equity distribution:
- NEAL 20 to 30%
- EPC constructor 10 to 20%
- SONATRACH 20 to 30%
- SONELGAZ 30 to 40%
After startup, NEAL envisaged the the following equity
distribution:
- NEAL : 20 to 30% of the equity
- EPC constructor : 10 to 20 %
- Foreign Developer 10 to 20%
- Funds + BANKS 20 to 30%
- SONATRACH : 7%
- SONELGAZ : 10 to 33%
It was envisaged that BEA would syndicate the project
finance with participation of BEI ,USEXIM, WORLDBANK,
OPIC and KFW.
With respect to project economics, the following as-
sumptions have been made for the feasibility study:
• 3%/a inflation
• 30% equity

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START Mission to Algeria, 2003 SolarPACES

• 7.3%/a interest rate for financing over a10 year term

• 15%/a minimum IRR
• For the annual gas suplly of 740 millions de m³/a the
current local supply price of 610 DA/100m³ was assumed
With these assumptions, the electricity sales price would
amount to 2.86 cts$/kWh, of which 1.9 cts$/kWh corre-
spond to the production cost and 0.7 cts$/kWh for the
repayment of the debt. The project will benefit from the
advantages ANDI as any project that contributes to the
protection of the environment. The operating staff was
estimated by NEAL to be 20 persons.

Figure 10: Envisaged Sites during the START mission

During the START mission, various sites in the vicinity of

Biskra, Djemaa, Meghaier and El Oued have been visited.
For the purpose of the first feasibility study, the site of Sidi
Khelil (El Oued) has been selected. It has the following
characteristics:
• estimated annual Direct Normal Irradiation (DNI)
between 2100 and 2300 kWh/m²a
• 5km distance to 220kV line
• 100-150km distance to gas pipeline
• Availability of cooling water

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SolarPACES START Mission to Algeria, 2003

• Salty water for desalination

• Available infrastructure : highway, railway and
airport
The connection to the 220kV would be the responsibility
of the grid operator and be part of the diversification cost.
The connection to the gas pipeline will be the responsibil-
ity of the gas supplier in a similar way as for the Tébessa
plant.

Figure 11: Desert view in the region of envisaged site areas

Figure 12: View of water channel for cooling water

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START Mission to Algeria, 2003 SolarPACES

The following radiation maps have been kindly provided

by the Algerian “Centre de Développement des Energies
Renouvelables”:

Figure 13: Average daily sum of DNI in May

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SolarPACES START Mission to Algeria, 2003

Figure 14: Average daily sum of DNI in June

Figure 15: Average daily sum of GHI in May

Figure 16: Average daily sum of GHI in June

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START Mission to Algeria, 2003 SolarPACES

Figure 17: Average daily sum of Diffuse Horizontal Irradia-

tion in May

Figure 18: Average daily sum of Diffuse Horizontal Irradia-

tion in June

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SolarPACES START Mission to Algeria, 2003

The following global horizontal irradiation data of Taman-

rasset have been kindly provided by the Algerian “Centre
de Développement des Energies Renouvelables”:

Average Monthly Global Horizontal Irradiation (GHI) in Wh/m² in Ta

Hour Jan Feb Mar Apr May Jun Jul Aug Sep Oct
05-6 h 0 0 1 10 43 68 69 40 22 0
06-7 h 5 15 64 135 208 237 220 200 116 21
7-8 h 98 165 259 351 427 467 429 310 299 164
8-9 h 287 374 467 557 616 658 620 600 512 364
9-10 h 465 550 681 732 781 814 772 750 701 529
10-11 h 580 688 807 838 911 920 897 850 795 659
11-12 h 640 740 885 909 959 986 950 900 842 725
12-13 h 635 742 879 899 943 970 937 860 836 728
13-14 h 552 669 818 830 866 905 871 850 774 676
14-15 h 437 545 670 711 766 801 739 730 677 553
15-16 h 269 352 472 553 591 650 625 550 497 387
16-17 h 89 152 247 324 411 464 421 400 273 177
17-18 h 4 13 57 121 218 268 235 210 134 24
18-19 h 0 0 0 8 48 97 90 50 23 0
4062 5006 6307 6978 7790 8305 7873 7300 6500 5006

Table 7: Daily distribution of average monthly GHI in Ta-

manrasset

Average monthly Global Horizontal Irradiation in Tamanrasset

Dec
Nov
Oct
Sep
Aug
Jul
Jun
May
Apr
Mar
Feb
Jan
5 6 7 8 9 10 11 12 13 14 15 16 17 18
Hour of Day

Figure 19: Daily distribution of average monthly GHI in

Tamanrasset

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START Mission to Algeria, 2003 SolarPACES

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