Libya is looking to diversify its energy mix

After facing huge obstacles in oil and gas production, Libya is now striving to develop its renewable energy capacity and diversify its energy mix to establish greater energy security. Over the past decade, Libya has worked hard to restore its oil industry major political disruptions and lack of foreign investment because of this instability. Years of political turmoil meant that many oil production sites were left abandoned as oil companies waited for greater stability in Libyan politics, forcing production levels to decline. Libya has some of the largest oil reserves in Africa, but years of uncertainty have led to stagnation and the need for high levels of investment to restart operations.

Libya’s oil production has grown from 1.47 million bpd in 2000 to nearly 1.8 million bpd in 2010a trend that was expected to continue until the Arab Spring protests of 2011 and into the following decade of political turmoil. Oil production has risen and fallen in recent years due to the opening and closing of oil fields political battles continue. Libya regularly faces power shortages in the face of growing energy demand due to its heavy dependence on oil and gas and years of underinvestment in the country’s infrastructure. This has left the country with poor energy security, encouraging the leadership to develop alternative energy sources to strengthen its energy independence in the future.

In 2013, the Libyan government established its Renewable Energy Strategic Plan 2013-2025, outlining the goals to achieve 7% contribution to renewable energy of the electricity mix by 2020 and 10% by 2025. The focus of energy capacity expansion has been largely on wind and solar power. However, due to regular changes in political leadership and ongoing unrest, Libya’s renewable energy ambitions have been delayed for several years.

In March of this year, the European Union, in partnership with the United Nations Development Program (UNDP) and the German Federal Government through the German Corporation for International Cooperation (GIZ) launched an initiative aimed at increasing Libya’s renewable energy capacity, improving efficiency energy and climate change mitigation. The EU has allocated funds to GIZ and UNDP to implement a number of green energy projects. The initiative is part of the UNDP scheme “Support for Energy Transition and Climate Change Mitigation” and GIZ “Sustainable Energy and Adaptation to Climate Change for Resilience” (SECCAR). The organizations will work closely with the government, national authorities and public institutions to realize the projects.

Nicola Orlando, EU ambassador, he stated“The launch of these two projects demonstrates that concrete and effective partnerships can be built by sharing views on the future and mobilizing resources for a common goal. Climate change is a major global challenge, but it can also be seen as an opportunity to promote prosperity. The EU and Libya are working together to make this happen.”

The Libyan government and the General Electricity Company of Libya (GECOL) are watching several wind and solar energy projects. About 88% of Libya’s land is made up of deserts, which could provide the perfect environment for wind and solar projects. China’s PowerChina and France’s EDF are currently developing a 1,500 MW solar plant in eastern Libya, while France’s TotalEnergies is building a 500 MW solar plant in Al-Sadada, which is expected to become operational in 2026. GECOL also works in partnership with AG Australia. Energy to build a 200 MW solar plant in Ghadames and together with Alpha Dubai Holding of the United Arab Emirates to develop two more solar plants.

At the Libya-Italy round table held in Rome in September, the two powers discussed investment opportunities. Italy is Libya’s largest trading partner, with nearly $10 billion in annual trade. Italy has expanded its role in Africa in recent years as it seeks to foster sustainable partnerships with African energy-producing nations, expand access to clean energy and increase energy security in Europe and Africa. Italy’s oil major Eni has invested heavily in Libya’s oil and gas sector in the past and in 2023 Eni signed a memorandum of understanding with the Libyan government to identify opportunities to reduce greenhouse gas emissions and develop the country’s green energy capacity.

Gianluca Alberinni, Italian Ambassador to Libya, he stated“Italy can be an entry point for Libya into the larger European energy market.” Alberinni added: “We are interested in helping Libya become a united, peaceful and prosperous country again… The more stable and predictable the business environment, the more possibilities there will be for growth, development and cooperation with the system Italian”.

As Libya continues efforts to revitalize its oil and gas industry and restore production levels, the government is also looking to develop its renewable energy capacity with the support of several international players. Libya’s desert terrain offers significant opportunities for the development of solar and wind energy projects, and its experience in the international energy market will help it develop its new green energy sector. Expanding the renewable energy market will help Libya improve its energy security in the coming decades and could give it the potential to develop a new energy export market with Europe as the region goes green.

By Felicity Bradstock for Oilprice.com

More top reads from Oilprice.co