Paving the way: Analysing energy transition pathways and green hydrogen exports in developing countries – The case of Algeria

Abstract

The measures needed to limit global warming pose a particular challenge to current fossil fuel exporters, who must not only decarbonise their local energy systems, but also compensate for the expected decline in fossil fuel revenues. One possibility is seen in the export of green hydrogen. Using Algeria as a case study, this paper analyses how different levels of ambition in hydrogen exports, energy efficiency and fuel switching affect the cost-optimal expansion of the power sector for a given overall emissions reduction path. Despite falling costs for photovoltaics and wind turbines, the results indicate that in countries with very low natural gas prices, such as Algeria, a fully renewable electricity system by 2050 is unlikely without appropriate policy measures. The expansion of renewable energy should therefore start early, given the high annual growth rates required, which will be reinforced by additional green hydrogen exports. In parallel, energy efficiency is a key factor as it directly mitigates CO2 emissions from fossil fuels and reduces domestic electricity demand, which could instead be used for hydrogen production. Integrating electrolysers into the power system could potentially help to reduce specific costs through load shifting. Overall, it seems advisable to analyse hydrogen exports together with local decarbonisation in order to better understand their interactions and to reduce emissions as efficiently as possible. These results and the methodology could be transferred to other countries that want to become green hydrogen exporters in the future and are therefore a useful addition for researchers and policy makers.