Egypt is the largest oil producer in Africa that is not a member of the Organization of Petroleum Exporting Countries (OPEC), and the second largest natural gas producer on the continent, following Algeria. Egypt also plays a vital role in international energy markets through the operation of the Suez Canal andSuez-Mediterranean (SUMED) Pipeline, important transit points for oil and liquefied natural gas (LNG) shipments from African and Persian Gulf states to Europe and the Mediterranean Basin. Fees collected from operation of these two transit points are significant sources of revenue for the Egyptian government.
As a result of Egypt’s growing domestic energy demand, the government plans to increase the amount of power generated from renewable sources, particularly wind and solar.
The Egyptian electrification rate in 2009 was approximately 99.6 percent, according to the International Energy Agency (IEA). The rate is among the highest in Africa with a 100 percent urban access to electricity and 99.3 percent in rural areas. Nonetheless, approximately 300,000 people still lack access to electricity.
According to Egypt’s New and Renewable Energy Authority (NREA), hydropower is Egypt’s third largest energy source after gas and oil. In 2010, Egypt generated around 14 billion kWh from hydroelectric resources, almost all of which came from the Aswan High Dam and the Aswan Reservoir Dams. However, over 85 percent of the Nile’s hydropower potential has already been exploited. In turn, NREA, the government entity tasked with leading renewable energy development in Egypt, has actively pursued renewable projects to diversify the country’s energy mix.
Egypt’s first solar-thermal power plant is located in Kuraymat, just over 55 miles south of Cairo and has the capacity to generate 140 megawatt (MW) of solar-thermal energy. The plant was completed and connected with the national grid at the end of June 2011. The plant uses concentrated solar power (CSP) with back up natural gas fired generators. According NREA, solar power accounts for 20 MW of the plant’s total generation. The solar-thermal plant is part of a general plan to export North African generated electricity to Europe through the Desertec project. The World Bank and the Japan International Cooperation Agency (JICA) helped to finance the construction of the solar-thermal plant.
According to NREA’s 2010/2011 annual report, a project feasibility study is being prepared and expected to be completed this year on the construction of a 100-MW solar-thermal plant in KomOmbo. The project will be financed by the German government-owned development bank known as KfW, the World Bank, and the African Development Bank.
According to NREA, Some of the world’s best wind power resourcesare located in Egypt, especially in the areas of theGulf of Suez, and West & East Nile Valley whereat least 7200 MW could be potentially developedby 2020. Currently, Egypt generates about 550 MW of energy from wind power plants, of which 545 MW are generated from the Zafarana wind farm and the remainder from the Hurghada wind farm.
Egypt’s largest renewable project is the Zafarana wind farm located on the Gulf of Suez West Coast, along the Red Sea coastline. The farm houses several wind projects that were developed in several stages and financed in cooperation with development banks from Germany, Denmark, Spain, and Japan.
The government has said that it was planning to expand wind capacity by over 2.6 gigawatts (GW) over the next five years as part of a plan to increase wind’s share of electricity generation to 12 percent. There are several wind projects currently under preparation that combined could greatly increase Egypt’s installed wind capacity. The projects will be implemented through governmental cooperation agreements with Germany, Japan, Spain, France, and the European Union. Wind projects are being prepared in cooperation with private international companies as well.