Egypt’s Integrated and Sustainable Energy Strategy to 2035

Egypt’s Integrated and Sustainable Energy Strategy to 2035

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Ehab Mohamed Farouk

Securing energy demand for the next generations to come is one of the most challenging aspects facing any sustained development policy. Egypt, as a country of limited fossil fuel resources, has to diversify its energy portfolio by the utilization of its renewable energy resources, mainly wind and solar, owing to the economic and resource potential approved by relevant atlases.

Sustainable reforms are crucial to enable the energy sector to meet the needs of the Egyptian people, not only at present but also in the future. It becomes necessary to make it more flexible and to increase its efficiency to avoid the problems of unsustainable production and demand-side vagaries. On this line, the government of Egypt has taken bold steps to adopt an energy diversification strategy by proposing an increased development of renewable energy and energy efficiency including various aggressive operation and maintenance programmes in the power sector.

In 1986, the New and Renewable Energy Authority (NREA) was established to act as the national focal point for expanding efforts to develop and introduce renewable energy technologies to Egypt on a commercial scale together with the implementation of related energy conservation programmes. The Solar Atlas was issued in 1991 and indicated that Egypt is considered as one of the sunbelt countries where it is endowed with high intensity of direct solar radiation ranging between 2000 to 3200 kWh/m2/year from North to South. The sunshine duration ranges between 9-11 h/day from North to South, with very few cloudy days.

Egypt’s first concentrated solar power (CSP) plant is 140 MW including a solar field of 20 MWe based on parabolic trough technology and 120 MW combined Cycle. It has been in operation since July 2011. In September 2014, the Benban Solar Park photovoltaic power station was started with a total capacity of 1650 MWp, which corresponds to an annual production of approximately 3.8 TWh. It is located in Benban (Aswan Governorate) in the Western desert, approximately 650 km south of Cairo and 40 km northwest of Aswan. Benban is currently the 4th largest solar power plant in the world.

On the wind energy front, since 2001, series of large-scale wind farms were established with a capacity of 1300 MW in cooperation with Germany (KFW), Denmark (DANIDA), Spain, and Japan (JICA) through soft loans. Subsequently, the wind atlas of Egypt was issued in 2005. It depicted that Egypt enjoys excellent wind potential, particularly in the Suez Gulf where the average wind speed reaches 10.5 m/sec. Besides, wind energy resources are also available in large regions on the Nile banks in the Eastern and the Western Deserts and parts of Sinai.

Egypt’s Sustainable Development Strategy “Vision 2030” was announced in February 2016 with the objective that Egypt will achieve an economy that is competitive, balanced, and diversified by 2030, ensuring social justice, balanced ecology, and secure the quality of life and sustainable development for all Egyptians. Through its different objectives, the strategy has identified a set of targeted economic, social, and energy indicators to be reached by 2020 and 2030.

Furthermore, the National Energy Strategy 2035 has been adopted by the Supreme Council of Energy to maximize the benefit from renewable energy resources and increase its share in the energy mix to reach more than 42 % by 2035.

Renewable Energy Investment Opportunities

Based on Law No.102 of the year 1986 regarding the establishment of NREA, Law No.135 of the year 2014, Law No. 203 of the year 2014 regarding the stimulation of producing electricity from renewable energy sources, and the Electricity Law No.87 of the year 2015, the implementation of renewable energy projects is carried out through the following schemes:

1. Competitive bidding raised through NREA (EPC + Finance)

2. Competitive bidding raised through the Egyptian Electricity Transmission Company Build, Own, and Operate (BOO).

3. Commercial projects (IPP), which allows the developer to sell electricity directly to the consumer.

4. Feed-in-tariff program, which allows exploring the possibility of entering into a partnership with companies, according to regulations issued by Egyptian Electric Utility and Consumer Protection Regulatory Agency.

Given the newer policy space enabled by the recent sustainable energy strategy and the natural resource landscape, Egypt’s renewable energy market is at a place to attract foreign investments. In this scenario, Egypt’s energy profile will attract more nations that are looking forward to progress on their renewable commitments.

Mr. Ehab Mohamed Farouk serves as the General Manager of Tests, New and Renewable Energy Authority at the Ministry of Electricity and Renewable Energy, Egypt. He has more than 20 years of experience in the field of renewable energy and energy efficiency.