Libya wants to diversify its energy mix

Having faced enormous obstacles in oil and gas production, Libya is now seeking to develop its renewable energy potential and diversify its energy mix to ensure greater energy security. Over the past decade, Libya has worked hard to get its oil industry back on track in the face of the crisis serious political disruptions and lack of foreign investment because of this instability. Years of political unrest meant many oil production facilities were abandoned while the oil majors waited for greater stability in Libyan politics, forcing a reduction in production levels. Libya has some of the largest oil reserves in Africa, but years of uncertainty have led to stagnation and the need for significant investment to restart operations.

Oil production in Libya has increased from 1.47 million barrels per day in 2000 to almost 1.8 million barrels per day in 2010and this trend would continue until the Arab Spring protests of 2011 and the subsequent decade of political unrest. Over the past few years, oil production has steadily risen and fallen due to oil fields opening and closing political fights continue. Libya regularly faces energy shortages amid rising 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 leaders to develop alternative energy sources to strengthen its energy independence in the future.

In 2013, the Government of Libya developed a Renewable Energy Strategic Plan for 2013-2025, which outlined targets to achieve 7% share of renewable energy to the electricity mix by 2020 and 10 percent by 2025. The development of generating capacity has focused mainly on wind and solar energy. However, due to regular changes in political leadership and ongoing unrest, Libya’s renewable energy ambitions have been delayed for several years.

In March this year, the European Union, in cooperation with the United Nations Development Program (UNDP) and the German federal government through the German Corporation for International Cooperation (GIZ), launched an initiative to expand Libya’s renewable energy potential, improve energy efficiency and mitigating climate change. The EU has allocated funds from GIZ and UNDP to implement a number of green energy projects. The initiative falls under the UNDP ‘Support for Energy Transition and Climate Change Mitigation’ program and the GIZ Sustainable Energy and Climate Change Adaptation for Resilience (SECCAR) programme. To implement projects, organizations will work closely with the government, national authorities and public institutions.

Nicola Orlando, EU Ambassador, he stated“The launch of these two projects demonstrates that it is possible to build concrete and effective partnerships by sharing views on the future and mobilizing resources towards 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.”

This is demanded by the Libyan government and the Libyan General Electricity Company (GECOL). several wind and solar energy projects. About 88 percent of Libya’s territory is desert, which could provide an ideal environment for wind and solar projects. Chinese companies PowerChina and French EDF are currently developing a 1,500 MW solar power plant in eastern Libya, while French company TotalEnergys is building a 500 MW solar power plant in Al-Sadada, which is expected to be commissioned in 2026. GECOL is also working with an Australian company AG Energy for the construction of a 200 MW solar power plant in Ghadames and together with Alpha Dubai Holding from the United Arab Emirates for the construction of two more solar power plants.

During the Libyan-Italian Round Table held in Rome in September, the two powers discussed investment opportunities. Italy is Libya’s largest trading partner, with annual trade totaling almost $10 billion. In recent years, Italy has expanded its role across Africa, aiming to support sustainable partnerships with African energy-producing countries, expand access to clean energy and increase energy security in Europe and Africa. The Italian oil company Eni has made significant investments in the Libyan 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 potential.

Gianluca Alberinni, Italian Ambassador to Libya, he stated“Italy could 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 is, the more opportunities there will be for growth, development and cooperation with the Italian system.”

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

Author: Felicity Bradstock for Oilprice.com

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