GlobalData’s latest report, ‘Egypt Power Market Outlook to 2030, Update 2021 – Market Trends, Regulations, and Competitive Landscape’ discusses the power market structure of Egypt and provides historical and forecast numbers for capacity, generation and consumption up to 2030. Detailed analysis of the country’s power market regulatory structure, competitive landscape and a list of major power plants are provided. The report also gives a snapshot of the power sector in the country on broad parameters of macroeconomics, supply security, generation infrastructure, transmission and distribution infrastructure, electricity import and export scenario, degree of competition, regulatory scenario, and future potential. An analysis of the deals in the country’s power sector is also included in the report.
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%. Within renewable power 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.
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By GlobalDataTo meet rapidly increasing energy demand, the Egyptian Government has taken an energy diversification strategy, known as the Integrated Sustainable Energy Strategy (ISES) to 2035. This strategy is aimed towards continuous security and stability of the country’s energy supply. According to ISES targets, the share of renewables in total generation will be 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. Also, there is high potential for electricity generation through solar PV plants in Egypt. 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.
In March 2020, the Egyptian Government implemented a nationwide lockdown and social distancing measures to control the spread of COVID-19. Majority of the sectors were affected due to the lockdown and travel restrictions; however, tourism and hospitality sector received the biggest blow.
With respect to power sector, electricity demand declined sharply in March and April 2020. Power generation also declined during the same months. However, overall annual consumption and generation did not witness a fall in 2020. The government implemented various measures to soften the impact of COVID-19. In March 2020, the government reduced the electricity prices for heavy industries from EGP1.1 to EGP0.1 per KWh and hinted 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. Few major power sector projects witnessed delays due to the COVID-19 pandemic. For instance, in April 2020, the Egyptian Electricity Transmission Company (EETC) postponed the reception of bids for the construction of the Egypt Saudi Arabia interconnection line by around two months.
In June 2021, the African Development Bank approved an €83m ($98m) loan to finance the phase 2 of Egypt’s Electricity and Green Growth Support Programme. The funding is part of the bank’s budget support to the Egyptian Government to strengthen the country’s electricity infrastructure, which is expected to support the private sector and accelerate recovery from the COVID-19 pandemic.
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The Egyptian Government