Egypt Energy Situation

• Countries Portal
• Countries Group
• All Egypt Articles

Egypt

Capital:

Cairo

Region:

Coordinates:

26.0000° N, 30.0000° E

Total Area (km²): It includes a country's total area, including areas under inland bodies of water and some coastal waterways.

1,001,450

Population: It is based on the de facto definition of population, which counts all residents regardless of legal status or citizenship--except for refugees not permanently settled in the country of asylum, who are generally considered part of the population of their country of origin.

112,716,598 (2023)

Rural Population (% of total population): It refers to people living in rural areas as defined by national statistical offices. It is calculated as the difference between total population and urban population.

57 (2023)

GDP (current US$): It is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources.

395,926,075,163 (2023)

GDP Per Capita (current US$): It is gross domestic product divided by midyear population

3,512.58 (2023)

Access to Electricity (% of population): It is the percentage of population with access to electricity.

100.00 (2022)

Energy Imports Net (% of energy use): It is estimated as energy use less production, both measured in oil equivalents. A negative value indicates that the country is a net exporter. Energy use refers to use of primary energy before transformation to other end-use fuels, which is equal to indigenous production plus imports and stock changes, minus exports and fuels supplied to ships and aircraft engaged in international transport.

-7.39 (2014)

Fossil Fuel Energy Consumption (% of total): It comprises coal, oil, petroleum, and natural gas products.

97.93 (2014)

Source: World Bank

---

Introduction

The Arab Republic of Egypt is located in North Africa and borders with Libya in the East, Sudan in the South and Palestine Territories and Israel in the East. Its population is mainly concentrated along the river Nile, as the rest of the country's territory is largely desert. Most parts of the country have has a hot desert climate with extreme heat occuring during summer. An exception is the northern Mediterranean coast which receives more rainfall during winter and has a generally more moderate climate.

Energy Situation

Energy Data

Primary Energy Supply

Egypt is a resource rich country. According to the US Energy Information Administration (EIA), it is the largest non-OPEC oil producer in Africa and the second largest dry natural gas producer on the continent. However, primary energy production in Egypt has been steadily declining since 2009 and in 2012 reached 82,046 ktoe. This is due to shortages in natural gas supply and oil production being able to keep up with the energy demand. The shortages have led to frequent electricity blackouts in the country as well as decreasing exports. In attempt to increase power generation, the Egyptian government has approved the industrial use of coal in April 2014.

Consumption

Final energy consumption in Egypt in 2012 added up to 55,879 ktoe. The share of the individual sectors is shown in table 1.

Table 1: Final energy consumption in Egypt in 2012 (ktoe)

Total Final Energy Consumption
		ktoe	%
Industry sector		13,357	23.90
Transport sector		16,980	30.39
Other sectors		18,479	33.07
of which	Residential	11,910	21.31
	Commercial and public services	2,913	5.21
	Agriculture/ Forestry	2,841	5.08
	Non-Specified	814	1.46
Non-energy use		7,062	12.64
Total		1622	100

Import and Export

Egypt is a net exporter of crude oil and natural gas. In addition, it has a strategic position in oil transfer because of its operation of the Suez Canal and Sumed (Suez-Mediterranean) Pipeline, two major routes for the transfer of Persian Gulf oil. However, the combination of increasing consumption and declining production has led to a decline in natural gas exports since 2009. In order to satisfy domestic demand, the government has been diverting natural gas supplies from exports. In terms of coal and peat, Egypt is a net importer. Coal imports are expected to increase in the short- and medium term, since the Egyptian government has approved the industrial use of coal in April 2014 and in the same year signed a construction deal for the first coal-fired power in the country.

Subsidies

In 2013, the Egyptian government spent 120 billion Egyptian pounds on fuel subsidies, which equals 7 % of the GDP . These costs in combination with economic stagnation have contributed to the increasing deficit, which reached about 12 % of GDP in 2013. In order to alleviate this burden, the Egyptian government announced spending cuts on energy subsidies in June 2014. The Financial Times reported that these subsidies are going to be cut by almost a third .
►Go to Top

Renewable Energy

In 2012, electricity production renewable energy sources reached 14,855 GWh , which is a share of 9.04% of the total electricity production. While 13,358 GWh (8.13%) were produced by hydropower installations, wind power contributed another 1,260 GWh (0.77%) and solar PV 237 GWh (0.14%).
The current installed wind capacity accounts for 550 MW (2012 ). Egypt is endowed with abundant wind energy resources. Particularly in the coastal regions, high and stable wind speeds are frequent (up to an average of 10.5 m/s in the Gulf of Suez). Furthermore, the country’s large deserts and abundant thinly populated areas are well suited for the construction of large wind farms.
Solar energy use is still in its infancy, with only 15 MW of solar PV installed capacity so far. Additionally, there is one solar thermal project, an integrated solar combined-cycle power plant. Here, the solar power partially replaced fossil fuel. The plant has an overall capacity of 140 MW of which the solar input is 20 MW.
The total installed capacity from hydropower accounted for 2,800 MW in 2012, most of it being produced by large dam projects on the Nile: the High Dam, Aswan I and Aswan II.

Electricity

Installed Capacity and Generation

Between 2011/2012 and 2012/2013, the total installed capacity increased about 6 %, reaching 30,803 MW, due to added thermal plants. The installed capacity development by type of generation is outlined in table 2.

Table 2: Installed capacity development by type of generation (in MW) 2008-2013

	2008/2009	2009/2010	2010/2011	2011/2012	2012/2013
MW
Renewables	425	249	687	687	687
Steam	11,458	11,458	12,859	12,684	13,808
Hydro	2,800	2,800	2,800	2,800	2,800
Combined Cycle	7,178	7,137	9,327	10,077	10,080
Gas	1,641	2,841	1,376	2,826	3,428
Total	23,502	24,762	27,049	29,074	30,803

In addtion, Egypt has 30 decentralized power plants, mostly diesel and gas turbine units which are not connected to the national grid. The combined installed capacities of these plants added up to 224 MW in 2012/2013. Approximately 234.5 GWh of electricity were supplied to local users including tourist resorts.
Egypt is a net exporter of electricity, importing 77 GWh, while exporting 474 GWh of electricity in 2012. In 2012/2013, the average percentage network losses were 11.02%.
Between 2001 and 2012, electricity production rose from 83,282 GWh to 164,364 GWh .The main source for the production of electricity is gas (66%) followed by hydro (18.2%) and oil (15.6%).

Consumption

The main consumer of electricity in Egypt is the residential sector which accounts for 42% of the total consumption, followed by the industrial sector (28%). The consumption of the residental sector has been steadily increasing in the recent years. According to the Ministry of Electricity and Energy, this is due to two factors: the expansion of residential compounds and new communities as well as the the use of domestic appliances, air conditioners in particular, during hot weather. The development of the electricity consumption per sector is outlined in table 3.

Table 3: Electricity consumption by sector (GWh) 2008-2013

Sector	2008/2009	2009/2010	2010/2011	2011/2012	2012/2013
GWh
Industries	37,273	38,916	40,702	42,098	39,887
Agriculture	4,617	4,834	4,927	5,560	6,230
Utilities	4,714	5,555	5,759	6,010	5,904
Public lighting	6,982	7,050	6,186	6,537	6,210
Governmental entities	5,563	5,443	5,977	6,385	7,664
Residential	43,811	47,431	51,370	56,664	59,757
Commercial & others	8,754	9,674	10,238	10,715	14,605
Total	111,714	118,903	125,159	133,969	140,257

Grid

In 2012/2013, the carrier grid consisted of 43,634 km total transmission lines and cables. The grid is subdivided into six geographical zones, namely Cairo, Canal, Delta, Alexandria and West Delta, Middle Egypt and Upper Egypt. The country’s entire territory is covered. The network is interconnected with the grids of Libya, Jordan, Syria and Lebanon. There are ongoing studies for interconnections with Saudi Arabia, Sudan, the Democratic Republic of Conge, the Eastern Nile Basin (Sudan and Ethiopia) and Greece.

Electricity prices

The prices of electricity in Egypt range among the lowest in the world. The prices are fixed by the Egyptian and are highly subsidized. The tariff structure varies according to type of consumption (e.g. residential, commercial, industrial) and amount consumed. Since the tariff is higher for higher consumption, there is an incentive to consume less. The lowest category of the residential tariff, up to 50 KWh/month, has remained unchanged since 1993 at 5 piasters (approximately 0.60 €-ct) per KWh. Since 2007, the government has been trying cut costs for subsidies. In July 2014 , electricity prices increased as part of a five-year plan which aims to start generating profits from electricity, which is currently sold for less than half its production cost .

►Go to Top
Updated until here

Energy Policy

General Information

Overview and recent debates (e.g. coal)
Within the context of the new energy strategy and the ambitious renewable energy targets, recently, there has been some effort to create a more competitive electricity market in order to attract investors from the private sector. The draft of the new Electricity Law, which is currently in the process of ratification by the People’s Assembly, is supposed to establish a liberalised electricity market, regulated by the Egyptian Electric Utility and Consumer Protection Regulatory Agency EEUCPRA. Article 20 – 22 of the draft law addresses the replacement of the current Single Buyer Model and allows for third party access to the electricity grid. The access to the electricity grids will be based on published tariffs and longterm electricity purchase agreements. Moreover, the government states that it plans to remove all energy subsidies by 2017.
►Go to Top

Renewable Energy Policy

Egypt’s renewable energy strategy was formulated in the early 1980s as an integral part of the national energy planning. This strategy has been revised and adapted according to the changing financial, market and technological framework conditions. The target of a 20 % renewable electricity by 2020 (around 12 000 MW) is highly ambitious compared to the previous target set in 2000 of 14 % RE-E by 2021/22.
The most important instrument to implement the energy strategy is the New Electricity Law, which is currently in the process of ratification by the People’s Assembly. The new law will:

• Establish a liberalized electricity market with various market participants, regulated by EEUCPRA
• Improve the conditions for renewable energy, cogeneration and demand side management in the electricity sector
• Provide some rules for electricity consumption and includes measures to encourage renewable energy electricity production.

With regard to renewable energy electricity generation, the law foresees that the private sector builds, owns and operates the projects and sells the electricity to the transmission company (EETC) under long term Power Purchase Agreements (PPA). Non-renewable energy based Independent Power Producers (IPPs) conclude bilateral purchase agreements with eligible consumers.
To implement the strategy, a two phase policy is planned:

• Phase 1 will adopt competitive bids through issuing tenders requesting the private sector to supply electricity from renewable energy sources. A PPA agreement, mostly for 20 years, will be guaranteed. This competitive bidding is based on existing law, which also supports the existing IPP.
• In Phase 2, a feed-in-tariff will be implemented, in particular for medium and small size projects. This will be based on the new electricity law.
  

Further support instruments are the right of access and priority dispatching for electricity generation from renewable sources, which is already implemented, whenever they are available and the establishment of a Renewable Energy Fund. This fund will support the renewable energy activities of the MEE and the MoP covering the deficit between the renewable energy costs and market prices as well as providing financial support to pilot projects. It will be mainly financed through a levy on subsidized fossil fuel sales for electricity generation.

Competitive bids
It is planned to tender a total of 2 500 MW through five bids, divided in blocks of 250 MW. The framework criteria for the tenders include:

• Controlled increase of the renewable based electricity capacity according to the capacity of transmission system and the capacity of the market.
• Attracting highly qualified international developers with strong financial status and high capacity for technology transfer.
  
• Promotion of local manufacturing. In the evaluation of the proposals, advantages will be given to those offers having higher share of locally manufactured components.
  
• Achieving the lowest possible prices.
  
• Reducing the financial risk for investors guaranteeing long term PPAs (mostly of 20 years). The first process has started with a prequalification tender for 250 MW in Gabal el Zeyt. The last tender will be opened by 2017.
  

Feed-in-tariff
The system is supposed to offer incentives to install 2 500 MW of additional capacity. It is addressed to small and medium size projects up to 50 MW. The tariff will be probably set for 15 years, taking into consideration wind speed and installed capacity. The system is still under elaboration.
►Go to Top

Energy Efficiency Policy

Information about EE etc.
►Go to Top

Key Actors in the Energy Sector

Governmental Bodies and Agencies

The first Ministry for Electricity and Energy was established in 1964. The Ministry supervises the Egyptian Electricity Holding Company as well as the New and Renewable Energy Agency (NREA) and the Rural Electrification Authority (REA). Next to supervising all activities related to energy projects, it suggests electricity prices and publishes data and statistics relating to electricity production.
The Egyptian Electric Utility and Consumer Protection Regulatory Agency (EEUCPRA) was established by decree in 1997 (Decree no. 326 of 1997: »Establishing the electric utility and consumer protection regulatory agency«).The regulatory authority is located in Cairo and came into formal existence in 1998.

The primary task of the regulatory authority is to balance the interests of electricity producers, electricity providers and end users. It is supposed to ensure a reliable longterm supply of electricity while promoting and supervising environmental protection and operational reliability in the energy sector. It is also responsible for licensing the construction and operation of electricity generation, transmission and distribution facilities as well as for electricity trading. One of the authority’s declared objectives is to create an enabling environment for market-based competition within the framework of existing laws and to prevent the formation of commercial monopolies in the energy sector. EEUCPRA's Board of Directors is nominated by the Ministry of Electricity and Energy.
The Ministry of Electricity and Energy established the New and Renewable Energy Authority (NREA) in 1986 for the purpose of bundling activities aiming to promote both renewable sources of energy and energy efficiency. NREA is the operator of all wind power installations in Egypt, including the demonstration projects in Matrouh administrative district (hybrid wind/diesel system) and Hurghada (5.5 MW wind farm), as well as the grid connected Zafarana wind farms on the Gulf of Suez (reaching 425 MW by mid 2009 and still expanding). With the new general orientation towards private sector involvement, NREA also engages in supporting private investment in wind energy by providing resource assessment, the necessary data for feasibility studies and technical support for potential project developers, and by being the partner in land use agreements. Moreover, the NREA has a central laboratory for testing and certifying apparatus and equipment for utilizing renewable energy resources. Finally, the NREA offers training and upgrading courses, organises workshops and conducts studies – both on its own and in cooperation with international partner organisations.
The Egyptian Environmental Affairs Agency (EEAA) was initially established in 1982 and restructured in 1994, according to Law 4/1994. The EEAA serves as the executive arm of the Ministry of State for Environmental Affairs (MSEA). Its administrative council is composed of the Minister of Environmental Affairs, the Chief Executive Officer of the Agency and representatives from relevant ministries, Non-Governmental Organisations (NGOs), the public business sector, universities and research centres. The Agency’s activities are financed by the Environmental Protection Fund (EPF), which is funded by donations and grants by national and foreign organizations, as well as fines and compensation awarded by courts of law. Principal functions of the agency include the formulation of environmental policies, the development and monitoring of projects and the implementation of pilot projects. The agency is further the national authority in charge of promoting environmental topics between Egypt and third parties.
The government-owned and operated Egyptian Electricity Holding Company (EEHC) coordinates, supervises and monitors the activities of its 16 (+1 - Includes NREA –actually a research institute – also presents itself as the operator of the Zaafarana wind farm-therefore included as a electricity production company) affiliated companies in the field of production, transmission and distribution of electric energy. The EECH subsidiary EETC is responsible for the countrywide transmission of electricity to regional and local distributors. Next to the EETC, there are six generating and nine distribution companies. The EEHC is supervised by the Egyptian Ministry of Electricity and Energy (MEE).
►Go to Top

Others

The Egyptian Wind Energy Association (EGWEA) is the umbrella organisation, representing the wind energy sector in Egypt. It assists interaction and co-operation between all relevant players with professional involvement in the field of wind energy. The EGWEA is organised in a global network of wind associations. It aims at promoting and supporting the development of wind energy in Egypt by providing the means to facilitate the exchange of technical information, expertise and experience in the wind energy sector. It conducts studies, provides information on tenders and conferences and organises workshops for interested parties. IEGWEA is particularly interested in bringing forward wind energy interests of Egypt. However, the association is also engaged in the promotion of wind energy in developing countries in general.
►Go to Top

Energy Cooperation

Egypt is one of the priority partner countries of the German development assistance. In the last 50 years, Egypt has received approximately 5.5 billion € development aid. The current focus areas of the bilateral cooperation are water management, renewable energies (wind, solar and
hydro power), energy efficiency and climate protection. Within the framework of the German development cooperation, two initiatives to promote renewable energies and energy efficiency were launched in 2008:

• The Regional Center for Renewable Energy and Energy Efficiency (RCREEE), based in Cairo. Key development partners in setting up RCREEE are Egypt, Germany, Denmark and the EU Commission. Besides Egypt, other Arab members of the RCREEE are Algeria, Jordan, Lebanon, Libya, Morocco, the Palestinian National Authority, Syria, Tunisia and Yemen. RCREEE formulates and disseminates policies in support of RE and EE in the region and provides a platform for the regional exchange on policy issues and technological questions. In addition, RCREEE encourages the participation of the private sector to promote the establishment of a regional RE and EE industry. The German development cooperation provides assistance for the establishment of the Center and the formulation of the initial work program by GTZ.
  
• The Egyptian-German High Level Committee on Renewable Energy, Energy Efficiency and Environmental Protection JCEE, is a bilateral Egyptian-German initiative. The JCEE is a platform for energy policy discussion, for developing initiatives for investment as well as institutional projects, awareness and capacity building activities and establishing contacts and exchange between the two countries. The project is financed by the Egyptian Ministry of Electricity and Energy and the German Federal Ministry of Economic Cooperation and Development (BMZ). The implementing partners of the cooperation are NREA and GTZ.
  

In addition, financial assistance is provided by the German Kreditanstalt für Wiederaufbau (KfW). Kf W provided a reduced interest loan to rehabilitate the hydro electricity plants at Aswan and additional loans for the construction of medium sized hydro electricity projects at the Nile River. In the wind energy sector, Kf W provided loans to finance an important part of the wind farm in Zafarana and is supporting a new wind farm in Gabal El Zeit through loans jointly with the European Investment Bank.

Apart from Germany, Denmark, Japan, Spain and Italy are the most important partners providing assistance for developing renewable energies.

At European level, a Memorandum of Understanding to enhance EU-Egypt energy cooperation was signed in December 2008. The priority areas covered are, among others, the development of the Egyptian energy strategy, including the market reform, the convergence of Egypt’s energy market with that of the EU, the promotion of renewable energy and energy efficiency, the development of energy grids as well as technological and industrial cooperation.
These include the World Bank, the UN organisations UNDP, UNIDO and UNEP as well as the African Development Bank. For instance, Egypt is one of the first countries to present a portfolio within the framework of the Clean Technology Fund established by the World Bank in 2008 to finance RE and EE projects. Egypt plans to use $300 million in concessional financing from the fund, blended with financing from the World Bank Group, the African Development Bank, bilateral development agencies, private sector and other sources to spur wind power development and introduce clean transport options. The projects include a transmission grid extension for transporting electricity from Gulf of Suez-based wind farms.
Clean Development Mechanism (CDM)
Egypt’s Designated National Authority (DNA) was established in 2005, serving as the contact point for all CDM-related matters. Organizationally, it is part of the Egyptian Environmental Affairs Agency (EEAA).
Egypt’s current climate change mitigation policies, plans and measures relevant to CDM are contained in:
1. The National Environmental Action Plan (2002 – 2017).
2. Egypt’s Climate Change National Action Plan (ECCNAP).
3. Egypt’s National Strategy Study Program on CDM.
4. Egypt’s National Energy Efficiency Strategy (NEES)

Currently, four CDM projects are registered. Minor corrections have been requested for one project. In April 2009, 18 projects were in the DNA pipeline, of which nine were renewable energy
projects. The CDM potential in Egypt has been estimated at 69.75 Mt CO2eq, of which around 21 % is in the renewable energy sector.27 As shown in table 10, the total annual savings of the registered RE projects amounts to 0.62 Mt CO2eq. This represents 5 % of the existing potential in the renewable energy sector and around 1 % of the whole potential.
►Go to Top

Further Information

• Egypt's Government Services Portal
  
• Egypt's entry at The World Factbook

References

►Go to Top