With the war in Russia and Ukraine, Europe forgot with blood, sweat and tears about the gas of the first to throw themselves into the arms of the United States. The blockade of the Strait of Hormuz has made it clear that looking for a supplier far away and through inhospitable territories is not the best idea, so the old continent has set its sights on its neighbor: North Africa, an area with enormous potential and several essential projects (for Europe) under way.
After all, it has everything: abundant sun and wind, available land and it is just a stone’s throw away. That they can produce energy is a fact, the question is whether they can connect it to Europe reliably and profitably.
North Africa, energy cluster. While they cook two giant African gas pipelinesthe Trans-Saharan led by Nigeria, Niger and Algeria and the pharaonic Africa-Atlantic and are committed to green hydrogen with projects such as the Algerian ALTEH2A and the Moroccan investment worth 32.5 billion dollars, in the north of the continent there are several clear and concrete plans in renewable energies:
- Morocco wants add 16GW of capacity and plans an investment of 16,000 million dollars in five years to materialize it.
- Tunisia wants to reach a 50% renewable share by 2035. It has already put out to tender 2.3 GW of wind and solar infrastructure. Norwegian Scatec closed financing and began construction of the 120 MW Sidi Bouzid II solar plant together with Toyota Tsusho, with completion scheduled for 2027. The connection to Europe is advancing with the 600 MW Elmed submarine cable bound for Sicily.
- Algeria plans to connect 15 GW of renewables to the grid by 2035, with a first tranche of 3.2 GW solar.
Why is it important. For North African countries, these projects entail economic development, creation of critical infrastructure and technological employment and foreign investment. For Europe it is a real lifesaver: the old continent imports enormous quantities of gas, oil and electricity and since the war in Ukraine and Russia, The EU desperately seeks to diversify suppliers and has its sights set on northern Europe as a priority source of hydrogen in its Hydrogen Strategy. If these projects materialize, Europe would have cleaner, cheaper energy close to home.
Context. The Strait of Hormuz crisis has revealed something that we already knew: depending on third parties for your energy is a tremendous risk. Tunisia suffers it first hand: 95% of its electricity comes from natural gas and more than 60% of that gas is imported. It’s not new: according to the International Energy Agency (IEA), in 2024 the Middle East and North Africa region supplied more than 30% of the world’s oil and almost 20% of natural gas, but its electricity generation continues to depend on fossil fuels for more than 90%. Making the move to renewables is also a question of energy sovereignty.
In these movements there is a key Italian company: Snam. In 2023 acquired a 49.9% stake in the two gas pipelines that connect Italy with Algeria and the Algeria-Tunisia gas pipeline, this places it as a natural operator facing a possible conversion to hydrogen. Despite be an “energy island” On the continent, Spain starts from a privileged position if North Africa becomes the European tap: it will be one of the entry doors.
In detail. At a technical level, the most important thing is how to bring that energy to Europe: by submarine electric cable or by converting existing gas pipelines to transport hydrogen, which will have implications in both cost and management. While the second is in the study phase, the cable option is advancing: Italy has already hired Prysmian the construction of a 600 MW interconnection with Tunisia. Meanwhile, Spain and Morocco agreed in 2019 a third electrical interconnection, but to this day it still has not materialized.
Yes, but. The conversion of North Africa into an energy hub is a promise full of official commitments, GW targets and billions of dollars on the table, but it is not an installed and operational capacity. And unfortunately, the region has a history of advertisements that fell flat, serve as an example the Desertec solar project. Without going any further, geopolitics is already leaving warnings of the complexity of the matter.
On the other hand, there is the question of the price of green hydrogen: although in North Africa it is cheaper than in the rest of the world thanks to the sun, it still cannot compete with hydrogen from natural gas, which costs between 1 – 2 dollars per kg. According to a study by the Technical University of Munichonly a tiny fraction of African sites could approach competitive prices in 2030. Without subsidies, most projects are not profitable today.
Cover | Matthew Henry and Anirudh
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