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After facing huge hurdles 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 last decade, Libya has worked hard to get its oil industry back on track in the face of major political disruptions and a lack of foreign investment due to this instability. Years of political unrest meant that many oil production sites were left abandoned while oil majors waited for greater stability in Libyan politics, forcing down production levels. Libya has some of the biggest oil reserves in Africa, but years of uncertainty have led to stagnation and the need for high levels of investment to get operations running again.
Libya’s oil output rose from 1.47 million bpd in 2000 to almost 1.8 million bpd in 2010, a trend that was expected to continue until the Arab Spring protests of 2011 and the subsequent decade of political unrest. Oil production has gone up and down over the last few years, due to oilfields opening and shutting as political battles continue. Libya regularly faces power shortages in the face of rising energy demand due to its heavy reliance 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 solidify its energy independence in the future.
In 2013, the Libyan government established its Renewable Energy Strategic 2013-2025 Plan, outlining aims to achieve a 7 percent renewable energy contribution to the electric energy mix by 2020 and 10 percent by 2025. The focus of the energy capacity expansion largely centred around wind and solar power. However, due to regular changes in the political leadership and continued unrest, Libya’s renewable energy ambitions were delayed for several years.
In March this year, the European Union, in partnership with the United Nations Development Programme (UNDP) and the German Federal Government through the German Corporation for International Cooperation (GIZ) launched an initiative aimed at boosting Libya’s renewable energy capacity, improving energy efficiency and mitigating climate change. The EU allocated funds to GIZ and the UNDP to implement a range of green energy projects. The initiative falls under the UNDP’s scheme ‘Support to Energy Transition and Climate Change Mitigation’ and GIZ’s ‘Sustainable Energy and Climate Change Adaptation for Resilience’ (SECCAR). The organisations will work closely with the government, national authorities, and public institutions to carry out the projects.
Nicola Orlando, the EU Ambassador, stated, “The launch of these two projects testifies that concrete and effective partnerships can be built by sharing views on the future and mobilising resources for a common objective. Climate change is a major global challenge but 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 pursuing several wind and solar energy projects. Around 88 percent of Libya’s terrain 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 it expects to become operational in 2026. GECOL is also working in partnership with Australia’s AG Energy to construct a 200 MW solar plant in Ghadames and with the UAE’s Alpha Dubai Holding to develop two more solar plants.
At the Libya-Italy Roundtable held in Rome in September, the two powers discussed investment opportunities. Italy is Libya’s biggest trading partner, with almost $10 billion of annual trade. Italy has expanded its role across Africa in recent years, as it looks to foster sustainable partnerships with African energy-producing nations, to expand access to clean energy and boost 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 Libya’s government to identify opportunities to reduce greenhouse gas emissions and develop the country’s green energy capacity.
Gianluca Alberinni, the Italian Ambassador to Libya, stated, “Italy can be a point of entry for Libya to the larger European energy market.” Alberinni added, “We are interested in helping Libya to become a united country, peaceful and prosperous again… The more the business environment is stable and foreseeable, the more there will be possibilities for growth, development and cooperation with the Italian system.”
While Libya continues with its efforts to revitalise its oil and gas industry and get production levels back on track, the government is also looking to develop its renewable energy capacity, with support from 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 to develop its new green energy sector. Expanding its renewable energy market will help Libya to enhance its energy security in the coming decades and could provide it with the potential for developing a new energy export market with Europe as the region transitions to green.
