7 ELECTRICITY SECTOR DEVELOPMENTS IN EGYPT …
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be able to meet its renewable energy targets and achieve its energy policy
objectives and wider goals.
Renewable Energy Targets
Currently, Egypt enjoys more than 56,000 megawatts (MW) of installed
generation capacity. Thermal generation accounts for more than 92% of
electric generation capacity, with hydro, wind, and thermal solar making
up just 6%, 3%, and less than 0.5%, respectively. Together, wind and
solar represent just 0.8% of power generated. 17 By 2022, Egypt aims to
generate 20% of its electricity from renewable sources with 12% wind, 6%
hydro and 2% solar PV; and by 2035, 42% of its electricity from renewable sources with 25% solar photovoltaics, 14% wind, 3% concentrated
solar power and 2% hydro. It is also worth noting that the nation aims
for 3% of electricity to derive from nuclear power by 2035. 18
While targets are non-binding policy objectives without enforceable
compliance or punitive components, when combined with a solid regulatory framework, market structure and renewable development scheme,
targets send an important signal to the market and the international
investment community regarding the level of investment that may be
required, and the amount of renewable capacity that Egypt may feasibly
accommodate on its electric grid. Thus, while current non-hydro renewable energy contribution in Egypt is modest and challenges to exploiting
its resources remain, the sector is poised for significant growth. Prior to
understanding where Egypt’s power sector is heading, it is helpful to
briefly review the political context in which the sector exists, the past
development of the sector in general, and the evolution of the role of
renewable energy in particular.
Domestic Political Context
Egypt’s incentive to develop alternative energy resources is clear. Its
progress in reforming the sector to allow for private sector participation to
help drive renewable power generation development has also been noteworthy. Yet Egypt’s energy sector will develop within the greater political
environment in which it currently operates. Within this context, domestic
stability, national politics, international relations, and geopolitical events
provide the foundations on which Egypt’s new energy sector will be built
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be able to meet its renewable energy targets and achieve its energy policy
objectives and wider goals.
Renewable Energy Targets
Currently, Egypt enjoys more than 56,000 megawatts (MW) of installed
generation capacity. Thermal generation accounts for more than 92% of
electric generation capacity, with hydro, wind, and thermal solar making
up just 6%, 3%, and less than 0.5%, respectively. Together, wind and
solar represent just 0.8% of power generated. 17 By 2022, Egypt aims to
generate 20% of its electricity from renewable sources with 12% wind, 6%
hydro and 2% solar PV; and by 2035, 42% of its electricity from renewable sources with 25% solar photovoltaics, 14% wind, 3% concentrated
solar power and 2% hydro. It is also worth noting that the nation aims
for 3% of electricity to derive from nuclear power by 2035. 18
While targets are non-binding policy objectives without enforceable
compliance or punitive components, when combined with a solid regulatory framework, market structure and renewable development scheme,
targets send an important signal to the market and the international
investment community regarding the level of investment that may be
required, and the amount of renewable capacity that Egypt may feasibly
accommodate on its electric grid. Thus, while current non-hydro renewable energy contribution in Egypt is modest and challenges to exploiting
its resources remain, the sector is poised for significant growth. Prior to
understanding where Egypt’s power sector is heading, it is helpful to
briefly review the political context in which the sector exists, the past
development of the sector in general, and the evolution of the role of
renewable energy in particular.
Domestic Political Context
Egypt’s incentive to develop alternative energy resources is clear. Its
progress in reforming the sector to allow for private sector participation to
help drive renewable power generation development has also been noteworthy. Yet Egypt’s energy sector will develop within the greater political
environment in which it currently operates. Within this context, domestic
stability, national politics, international relations, and geopolitical events
provide the foundations on which Egypt’s new energy sector will be built