Egypt Set To Catch Up On Solar Growth In Coming Years

GlobalData’s has released a new report, ‘Egypt Power Market Outlook to 2030, Update 2021 – Market Trends, Regulations, and Competitive Landscape’ to evaluate and project the Egyptian power market to 2030. Egypt, despite having very favourable conditions for renewable energy, especially solar power, has lagged until recently, like much of the countries in the African continent. However it has started making progress in recent years. New plans also include Green Hydrogen. The Benban solar project is one of the world’s largest solar projects coming up in the country.

The report predicts that renewable power capacity in Egypt is expected to increase from 3.51 GW in 2020 to 13.7 GW in 2030, growing at an impressive Compounded Annual Growth Rate (CAGR) of 14.6% during the period. Within renewable sources, solar photovoltaics (PV) and wind power are expected to lead the renewable power market from 2021 to 2030. Cumulative solar PV capacity is expected to grow from 2.02 GW in 2020 to 7.71 GW in 2030, whereas cumulative onshore wind capacity is expected to increase from 1.39 GW in 2020 to 5.64 GW in 2030.

The Egyptian Government plan, known as the Integrated Sustainable Energy Strategy (ISES) to 2035 aims for a share of renewables in total generation of 20% by 2022 and 42% by 2035.

Development of renewable power could improve the energy security of Egypt while maintaining foreign exchange income through gas exports. Egypt has high wind energy potential especially in Gulf of Suez area with a stable wind speed around 8-10 m/s. Recently, new potential area has been untapped in east and west of the Nile River, in the Beni Suef Governorates and El Kharga Oasis. These areas have wind speeds between 5 m/s and 8 m/s, which is suitable for electricity generation. For solar, the country on average receives about 2,800 to 3,200 hours of sunshine annually. The country receives solar irradiation of 1970-3200 kWh/m2 annually. This makes it one of the best locations in the world to harness solar power.

Feed-in Tariffs (FiTs), Sun Initiative programme, and UAE rural electrification programme are expected to accelerate the development of renewable power in the country. Egypt has a target to develop an additional 10 GW of solar and wind power projects by 2022. These projects will increase Egypt’s power generation capacity, reduce the country’s dependence on gas and oil for electricity generation, and will help the country meet its commitments under the Paris Climate Agreement as it moves towards an environmentally sustainable power mix.

Overall annual consumption and generation did not witness a fall in 2020 despite the disruptions due to Covid. In March 2020, the government reduced the electricity prices for heavy industries from EGP1.1 to EGP0.1 per KWh and indicated that the electricity prices for other industries will not be increased for the next three to five years. The government also reduced the price of natural gas for industrial use.

With close bonds to it’s Arab neighbours, especially Saudi Arabia and UAE in recent years, Egypt is set to work closely with these countries to improve its power sector as well as even import power from Saudi Arabia, for instance.