"Algeria has a huge sunny area with big potential to be exploited. It has also financial and human resources. It lacks nothing. We can compete with other countries," Energy and Mines Minister Chakib Khelil said.

Algeria, which belongs to the Organisation of the Petroleum Exporting Countries and is one of the main gas suppliers to Europe, has benefited financially from high oil prices.

To develop renewable energy the authorities have set up a company called New Energy Algeria (NEAL), which is 45 percent owned by state energy firm Sonatrach, 45 percent by gas and electricity utility Sonelgaz and 10 percent by private agrobusiness firm Semoulerie Industrielles de la Mitidja.

"We want to meet local needs and export abroad by 2015," NEAL spokeswoman Aicha Adamou said.

"Germany has expressed readiness to import from Algeria. We have also possibilities to export to Italy and other European countries," she told an international conference on renewable energy.

NEAL and Spain's Abener Energia Spa have signed a 250 million euro (US$335 million) deal to build a hybrid solar-gas plant at Hassi R'Mel, with a capacity of 150 MW, due to come on stream in late 2009.

"Hassi R'Mel is not our sole project. We have many projects including plan to produce wind-based energy with a capacity of 10 MW," Khelil said on the sidelines of the three-day conference.

He said the combined-cycle hybrid plants aim to reach 5 percent of national generating capacity by 2015.