This document provides a summary of the "Mediterranean Leadership Summit" on energy networks and security of supply in Europe held in Malta in April 2016. It discusses the European Union's heavy reliance on energy imports, with a focus on natural gas imports from Russia. It also examines renewable energy potential and targets in the Maghreb region of North Africa, particularly the development of solar and wind power in Algeria. The document outlines Algeria's vast oil, natural gas, and shale gas resources as well as its plans to develop 13.5 gigawatts of solar power by 2030 in order to increase energy exports to Europe and enhance energy security.

1. The Mediterranean Leadership Summit
Energy Networks and Security of Supply in Europe
Yassine Bouhara – Chairman Tell Group
Malta - April 2016
www.tellgroup.net
Member of
In collaboration with

2. 2The Mediterranean Leadership Summit - April 2016
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World
EU MENA
Algeria
Source: BMWi 2000, Q-Cells 2007 Assumption CE@15.5% Mono
POWER TO THE WORLD
AREA NEEDED TO COVER THE WORLD ENERGY NEEDS

3. 3
EUROPEAN ENERGY DEPENDENCY
DUAL CHALLENGE
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Oil
34%
Natural Gas
23%
Coal
18%
Nuclear Energy
12%
Hydro electric
7%
Renewables
6%
EU 28 Primary Energy Consumption Breakdown by Fuel (2014)
Source: Tell Group analysis, BP Statistical Review 2015
§ Primary Energy Production: 789,8 Mtoe (2013)
§ Net Imports of Energy : 908,9 Mtoe (2013)
§ Russia is EU’s 1st Energy Trading Partner
§ EU’s Energy Dependency Rate: 88.4% for Oil and
65.3%forNatural Gas
Source: Eurostat 2013
Source: Tell Group analysis, Eurostat
EU 28 Natural Gas Import Breakdown (2013)
Russia, 39.0%
Norway, 29.5%
Algeria, 12.8%
Qatar, 6.7%
Nigeria, 1.8%
Lybia, 1.8%
Others, 8.4%
EU 28 Crude Oil Import Breakdown (2013)
Russia, 33.5%
Norway, 11.7%
KSA, 8.6% Nigeria, 8.1%
Kazakhstan, 5.8%
Lybia, 5.6%
Azerbaidjan, 4.8%
Algeria, 3.9%
Iraq, 3.6%
Others, 14.4%
Source: Tell Group analysis, Eurostat

4. 4
EUROPE ENERGY SUPPLY CHALLENGES
CHRONIC DEFICIT
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Primary Energy Balance Outlook (in Bn Toe)
Reducing reliance on
Russian imports
Energy demand growth
CO2 emissions limits
Middle East
1990 2005 2020 2035
4
2
0
-2
-4
FSU
Africa
S&C America
North America
Asia
Europe
North African renewable energy plans in line with European clean
energy initiatives and targets
Development of energy cooperation framework with North African
Countries
North African countries are ideally positioned to play a
key role in EU’s future energy supply scheme
Source: Tell Group analysis, BP Energy Outlook 2035

5. 5
Region Characteristics:
§ Comprised of Morocco,Algeriaand Tunisia:
§ Areaof 3 million sqm
§ Population of 85 million
§ Common culture, languageand heritage
§ Resource-rich countries (oil,gas, minerals)
§ Major potential for solar and wind energy
MAGHREB
RENEWABLE ENERGY ZONE
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Source: Tell Group analysis, Ren21, IRENA
Renewable Energy TargetsRenewable Energy Installed Capacity
Current Maghreb
renewables
capacity
Algeria
Total renewable energy: 255MW
§ Hydropower: 228MW
§ Solar PV: 2MW
§ CSP: 25MW
2030 targets: 22 GW
§ Biomass: 1 GW
§ Solar PV / CSP: 13.5 GW / 2 GW
§ Wind power: 5 GW
10%
Tunisia
Total renewable energy: 323MW
§ Hydropower: 66MW
§ Solar PV: 20MW
§ Wind: 245MW
2030 targets: 4 GW
§ Biomass: 300 MW
§ Solar PV / CSP: 1.5 GW / 500 MW
§ Wind power: 1.7 GW
8%
Morocco
Total renewable energy: 2,680MW
§ Hydropower: 1770MW
§ Solar PV / CSP: 160MW
§ Wind: 750MW
2030 targets: 6 GW
§ Hydropower: 2 GW
§ Solar PV and CSP: 2 GW
§ Wind power: 2 GW
82%
Maghreb
renewables
capacity by 2030
18%
69%
13%

6. 6
ALGERIA
SHAPING POWER LANDSCAPE IN MEDITERRANEAN
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Country Characteristics:
§ Surface: 2.4 million sqm
§ 10th largestcountry worldwide
§ Largest country of the Mediterranean basin
§ 10th largest reserves of natural gas (2nd in Africa)
§ 16th largest reserves of crude oil (2nd in Africa)
§ 3rd largest shale gas reserves worldwide
§ One of the highestrate of insolation worldwide
12.2 Bn Barrels
proven reserves (OPEP)
4.5 Tnm3
proven reserves (OPEP)
Crude Oil Natural Gas Shale Gas
20 Tn m3
reserves (EIA)
Solar Energy
Solar potential of about
170 000 TWh/y
(avg of 5.7 kWh/m2/day)

7. 7
SHALE GAS
VAST AND UNTAPPED SHALE GAS RESOURCES
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§ According to the EIA, Algeria is estimated to hold the
third-largest amount of shale gas resources in the world
after China and Argentina with 707 tn cubic feet (Tcf) and
5.7 bn barrels of technically recoverable shale gas and oil
resources, respectively.
§ At the end of May 20 14 , the Algerian cabinet approved
plans to move forward with exploration of the country's
shale gas resources and authorized Sonatrach to seek
foreign Partner for its shale gasprojects.
§ In January 2015, Sonatrach announced plans to invest up
to $70 bn over the next 20 years to exploit shale gas in
the southern desert. The company expects to produce
around 20 bn m3 of shale gas a year from 200 drill sites .
§ The government is offering a range of fiscal incentives for
unconventional projects:
§ Royalties fixed at 5%, as opposed to the
typical 5.5-23% range; and
§ Income tax reduced to 19%, from 30% for
conventional projects .
Oil and Natural Gas Bassinand Pipeline Infrastructure in Algeria

8. 8
WIND ENERGY
SAHARA WIND POWER
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§ In Algeria, the first attempt to connect wind turbines to the electricity distribution
network started back in 1957, with the installation of a 100 kW wind turbine on the site
of Grand Vent (Algiers).
§ Designed by the French engineer ANDREAU, this prototype was originally installed in St.
Alban England. This bipale of pneumatic, variable-pitch, 30 meters height and a
diameter of 25 m was bought by Electricité et Gaz d' Algérie and dismantled to be
installed in Algeria.
§ After solar, wind power constitutes the second axis of
development for renewable energies in Algeria.
§ Despite having lower wind speed than Morocco and
Tunisia, the Algeria Sahara benefits from good potential for
wind power with wind speeds varying between 2 et 6 m/s.
§ The most promising sites are situated in the region of Adrar
in the south where Sonelgaz commissioned 12 turbines to
the Spanish manufacturer Gamesa totaling 10 MW in 2014.
The Adrar site serves as a pilot project for a wind capacity
programthat plans to bring 639 MW online by 2023.
Algeria average wind speed by region (in m/s at 10m height)
Source: Wind Energy Division, Renewable Energy Development Center

9. 9
ALGERIA SOLAR ENERGY
13.5GW PLAN
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Solar map of Algeria
Source: Renewable Energy Partner
Renewable energyGovernment Plan:
§ 22,000 MW of renewable power generating capacity including 13,500 MW
of solar PV at 2030 horizon
§ 20 year PPA anda FiT at circa $0.15 Kwh
§ constructionof over 50 solar PV projects over the next six years
§ The global cost of the renewable electricity program is expected to reach
between$60-100 bn
§ 300 bn m3 of expected total natural gas savings, over the period of 2011
and 2030
Pilot
Phase
Initial
deployment
Large scale
deployment
Utility scale
deployment
2011- 2013 2014 - 2015 2016 - 2020 2021 - 2030
CompletedProjects
§ 1.1 MW solar PV plant in Ghardaïa testing four different
technologies (monocrystallin, polycrystallin, amorpheus and
thin film) commissionedinJuly2014
Projects in final commissioning stage:
§ 243 MW solar PV plants awardedtoYINGLI SOLAR
§ 100 MW solar PV plants allocatedtoBELECTRIC
Source: Renewable Energy Partner

10. 10
VIABILITY
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Source: BNEF Feb 2016 + RNE Estimates
Source: BNEF, WBL-EL
Source: NREL, Roland Berger
PV Global Installation (GWp) PV Capacity vs Demand (in MW)
Leveraged Cost of Electicityof PV vs Wind ($/KWH)
Best
10%
Low
7 8
18
29 31
38
45
56
65
70
79
88
100
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016f 2017f 2018f 2019f 2020f
Manuf Market established in China/SouthEastAsia
Next growth wave => India/Turkey/MENA
57 GW in 2015,64 GW in 2016f
80000
60000
40000
20000
China Taiwan SEA Japan Korea USA Others
EU
India Germany ROW
Demand Capacity
80000
60000
40000
20000
China Taiwan SEA Japan Korea USA Others
EU
India G
80000
60000
40000
20000
China Taiwan SEA Japan Korea USA Others
EU
India Germany ROW

11. 11
MAGHREB RENEWABLE ASSETS
TYPICAL RENEWABLE ENERGY INVESTMENT
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Inception Proliferation Ubiquity
Algeria
Tunisia
Morocco
Mature markets
Renewable Energy Asset Investment Curve
Pre-consent / Asset Ready
to be built
Assets Under construction
/ Expansion
Management of operating
assets
Highest Value Creation
Expected IRR >25%
Moderate Value Creation
Expected IRR 10-20%
Limited Value Creation
Expected IRR <10%
Market Cycle
Asset Development Stage
Investor returns
Capital Availability Low High High
Source: Tell Group analysis, Renewable Energy Partner

12. 12
RENEWABLE ENERGY AND JOB CREATION
RENEWABLE ENERGY EMPLOYMENT BY TECHNOLOGY
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Source: IRENA Annual Review 2015

13. 13
ALGERIA KEY TAKE AWAY
HYBRID ENERGY OPPORTUNITIES
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Oil and Gas Leader In
Mediterranean Basin
§ Opec member
§ Significant Oil, Gas, Shale gas resources
§ Energyprovider for south Europe andMaghreb
Energy DNA
§ Expertise of O&G explorationand exploitation
§ Largest Oil extracting companyinAfrica
§ Energydistributionand management trackrecord
Solid Infrastructure
§ Power gridcovering 99% of population
§ Trans Mediterraneanpipelines
§ International power interconnections
Institutional framework
§ New legislationandenergypolicies
§ Government tax incentives
§ Attractive Feed-in-tariffs
Energy Diversification
§ Unique potential for wind, solar and hydro power
§ Multi technology government renewable energyprogram
Benefits of Solar Energy
§ Security
§ Connecting
§ Job Prosperity

14. 14The Mediterranean Leadership Summit - April 2016
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EU
Source: BMWi 2000, Q-Cells 2007 Assumption CE@15.5% Mono
POWER TO THE EUROPEAN UNION
AREA REQUIRED TO COVER THE EU ENERGY NEEDS

15. 15
CONTACT US
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Tell Markets SPA
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Hydra, Alger -16035
T: +213 21 60 02 60
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www.tellgroup.net
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16. 16
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