- According to a new report by GlobalData, Egypt will fall short of achieving its renewable energy target.
Despite being described as having ‘tremendous potential’ for renewable energy, Egypt is expected to see a shortfall on its renewable power generation target for both 2022 and 2035 partly due to its overdependency on gas, according to GlobalData. However, the report does note that the country is set to meet its 2035 wind power target.
Renewable energy projects in Egypt still face strong headwinds
The Egypt Power Market, 2022-2025 report revealed that Egypt’s renewable power generation will fall short by 7.2% of its 2022 target and 15% short of its 2035 target.
Attaurrahman Ojindaram Saibasan, power analyst at GlobalData, said Egypt has tremendous potential for renewable energy, but the market faces multiple challenges. “Firstly, the country has an over dependency on gas-based power generation. The country has huge gas reserves that are just too tempting to ignore for a country that is experiencing regular electricity shortages. Gas made up around 83.5% of its capacity in 2021.
Related news: read more on Egypts energy sector HERE
“Egypt also has an existing monopoly of state-run companies in the electricity sector, a lack of private investment and poor infrastructure to integrate clean energy generation. Moreover, the country’s distribution sector faces high technical and commercial losses due to numerous illegal connections, non-payment, and non-enforcement of payment requirements,” explained Saibasan.
Integrated Energy Strategy for Egypt
To meet its rapidly increasing energy demand, the Egyptian government has taken an energy diversification strategy known as the Integrated Sustainable Energy Strategy (ISES). This strategy aims to maintain the security and stability of the country’s energy supply. Of its 42% renewable energy target, the ISES has planned for wind power to make up 12% – with the rest coming from solar projects and small hydro. To meet these targets, the country has been rapidly increasing its wind power capacity.
Saibasan said Egypt is recognised as having some of the world’s best wind power resources on the east and west banks of the Nile, as well as in the Gulf of Suez. “With high wind speed measuring up to 9-10 meters per second, and solid investments made in this area, GlobalData estimates that the country should easily meet its wind power target.
“Wind power is expected to account for 12.2% of the total annual generation in 2035. Given the climate, the country’s solar potential is also high and the Ministry of Electricity and Renewable Energy (MoERE) has introduced net metering, feed-in tariffs (FiT), and tax incentives to boost renewable power generation,” said the Globaldata power analyst.
New transmission infrastructure essential for renewable energy development
The Egyptian government has put a number of policies into place to encourage the use of renewables, but its recent efforts have been focused on preventing outages—a common occurrence due to a reduction in the availability of domestic gas, low-capacity utilisation factor, weak networks, and maintenance issues. Shortages are especially bad during summer months.
Saibasan added that developing new transmission infrastructure will be essential for the promotion of renewable power in Egypt, since most of its renewable power generation sites are situated in remote areas and far from consumption centres. “Improvements to grid connections are also required for grid integration, as well as evacuation of power generated from renewable sources. The government should look to create an open market and encourage private investments to boost renewable power capacity.”
Author: Nomvuyo Tena
Nomvuyo Tena is a Content Producer at Vuka Group and is as passionate about the energy transition in Africa as she is about music and Beyonce.
This article was originally published on ESI Africa and is republished with permission with minor editorial changes
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