With the war between Russia and Ukraine, Europe forgot, with blood, sweat, and tears, about the former's gas and threw itself into the arms of the United States. The blockade of the Strait of Hormuz made it clear that seeking a distant supplier 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) underway.
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 reliably and profitably connect it to Europe.
North Africa, an energy cluster. While two giant African gas pipelines are being cooked—the Trans-Saharan led by Nigeria, Niger, and Algeria and the pharaonic Africa-Atlantic—and they are betting on green hydrogen with projects like Algeria's ALTEH2A and Morocco's $32.5 billion investment, in the northern part of the continent there are several clear and concrete plans for renewable energy:
- Morocco wants to add 16 GW of capacity and plans a $16 billion investment over five years to make it happen.
- Tunisia aims to achieve a 50% renewable energy share by 2035. It has already tendered 2.3 GW of wind and solar infrastructure. Norway's Scatec closed financing and started construction of the 120 MW Sidi Bouzid II solar plant together with Toyota Tsusho, with completion expected in 2027. The connection to Europe progresses with the Elmed submarine cable, with a capacity of 600 MW and destination Sicily.
- Algeria plans to connect 15 GW of renewables to the grid by 2035, with an initial tranche of 3.2 GW solar.
Why it matters. For North African countries, these projects bring economic development, creation of critical infrastructure, technological employment, and foreign investment. For Europe, it is a lifeline: the old continent imports huge amounts of gas, oil, and electricity, and since the war in Ukraine and Russia, the EU has been desperately seeking to diversify suppliers and has its sights set on North Africa as a priority source of hydrogen in its Hydrogen Strategy. If these projects materialize, Europe would have clean and cheaper energy close to home.
Context. The crisis in the Strait of Hormuz has highlighted something we already knew: depending on third parties for your energy is a tremendous risk. Tunisia suffers it firsthand: 95% of its electricity comes from natural gas and more than 60% of that gas is imported. It is 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 still relies on fossil fuels for over 90%. Making the leap to renewables is also a matter of energy sovereignty.
In these movements, there is a key Italian company: Snam. In 2023 it acquired a 49.9% stake in the two gas pipelines connecting Italy with Algeria and the Algeria-Tunisia gas pipeline, positioning it as the natural operator for a potential conversion to hydrogen. Despite being 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 gates.
In detail. Technically, the most important thing is how to bring that energy to Europe: via submarine electrical cable or by converting existing gas pipelines to transport hydrogen, which will have implications both in cost and management. While the latter is under study, the cable option is advancing: Italy has already contracted Prysmian to build a 600 MW interconnection with Tunisia. Meanwhile, Spain and Morocco agreed in 2019 on a third electrical interconnection, but to date it remains unimplemented.
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 installed and operational capacity. And unfortunately, the region has a history of announcements that came to nothing, as exemplified by the Desertec solar project. Not to mention that geopolitics is already signaling the complexity of the matter.
On the other hand, there is the issue of the price of green hydrogen: although it is cheaper in North Africa than elsewhere thanks to the sun, it still cannot compete with natural gas hydrogen, which costs between $1-2 per kg. According to a study by the Technical University of Munich, only a tiny fraction of African sites could approach competitive prices by 2030. Without subsidies, most projects are not profitable today.
