Egypt Energy Situation

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Egypt
Flag of Egypt.png
Location _______.png

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 a hot desert climate with extreme heat occurring 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)[1], it is the largest non-OPEC oil producer in Africa and the second largest dry natural gas producer on the continent. However, energy production in Egypt has been steadily declining since 2009 and in 2012 reached 82,046 ktoe[2]. This is due to shortages in natural gas supply and oil production being unable to keep up with the energy demand. The shortages have led to frequent electricity blackouts in the country as well as decreasing exports. Factoring in exports and bunkers, Egypt's primary energy supply was 78,214 ktoe in 2012.[2]

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)[3]

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 55,879 100





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 (about 13.8 billion EUR) on fuel subsidies, which equals 7% of the GDP[4]. 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 [5].
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Renewable Energy

In 2012, electricity production from renewable energy sources reached 14,855 GWh[6], 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[7]). 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 replaces fossil fuel. The plant has an overall capacity of 140 MW, of which the solar input is 20 MW. More PV projects are in the pipeline, one in Hurghada (20 MW, expected start of operation 2016), and one in Kom Ombo (20 MW, expected start of operation 2016).[8]
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.
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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 since 2008 is outlined in table 2.

Table 2: Installed capacity development by type of generation (in MW) 2008-2013[9]


 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 addition, 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%.[9]
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%).[9] The Egyptian Electricity Holding Company (EEHC) operates with five-year plans. The current one (2012-2017) foresees the installation of 15.000 MW additional capacity. However, due to the increasing demand, the reserve margin is still expected to remain tight.[10]
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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 residential 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 [9]

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


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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[9] for interconnections with Saudi Arabia, Sudan, the Democratic Republic of Congo, 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 (i.e. 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 0.6 €-ct) per KWh. Since 2007, the government has been trying cut costs for subsidies. In July 2014, electricity prices were 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[11].

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Energy Policy

General Information

The combination of increasing demand, decreasing production and high subsidies for fuel have put a strain on the Egyptian energy sector and led to an enourmous public deficit. As of June 2014, Egypt owed 7.5 billion USD and counting to foreign oil and gas companies alone [12]. In order help meeting the energy demand and to prevent an Egyptian energy crisis, Gulf countries have been providing financial aid to Egypt. However, this kind of aid is expected to decrease as the Gulf countries are impacted by the falling oil prices of 2015.
One topic dominating energy policy debates in Egypt is the use of coal. In April 2014, the government approved the industrial use of coal. This is especially relevant for cement factories, as these are particularly energy intensive and have occasionally been cut off from the energy supply as the government's priority was to preserve gas for power generation[13].
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Renewable Energy Policy

In February 2008, the Egyptian government adopted a New National Renewable Energy Strategy. It sets out the ambitious goal to achieve a generation of 20% of the country’s electricity from renewable resources by 2020. 12 percentage points (7,200 MW) are supposed to be covered by wind energy. One third of the planned RE capacity will be state-owned projects financed through public investments by the New and Renewable Energy Agency (NREA) in cooperation with international financing institutions. Two thirds will be private sector projects, which will be supported by policies structured in three phases:

  • Phase 1 will adopt competitive bids through issuing tenders requesting the private sector to supply electricity from renewable energy sources.
  • In Phase 2, a feed-in-tariff will be implemented, in particular for medium and small size projects.
  • Phase 3 allows investors to build and operate renewable energy power plants to satisfy their electricity needs or to sell electricity to other consumers though the national grid.

Also, an RE support fund is supposed to be established to cover the feed-in tariff payments.
In September 2014, the government approved the issuance of feed-in tariffs for solar PV and wind projects.
The newPresidential Decree 1947/2014 of October 2014p rovides for fixed feed-in-tariffs over 25 years for PV and over 20 years for wind. These tariffs will be adjusted as soon as the following ceilings are reached: 300 MW of small PV (< 500 kW), 2000 MW of medium PV (500 kW – 50 MW), and 2000 MW of wind. The tariffs are going to be paid according to plant capacity. The details are outlined in a guiding document published by the Egyptian Electric Utility for Consumer Protection and Regulatory Agency (EgyptERA).
The FIT scheme is complemented by Law 203/2014 of 22 December 2014 whereby the Egyptian TSO (EETC) and the local distribution companies are obliged to connect a RES project to the grid. The costs of the connection shall be borne by the producer, while the government shall fund any extension of the grid. They are also obliged to purchase the electricity generated by qualifying projects and, if this is not feasible, compensate the producer.
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Energy Efficiency Policy

Egypt has adopted a National Energy Efficiency Action Plan (NEEAP) (2012-2015) with cumulative energy efficiency targets of 5%. At the Council of Ministers secretariat, there is an EE unit which is the mandated entity for developing and implementing this plan. However, there is no designated energy efficiency agency and no general legal framework for EE measures[14].
Some steps have been taken to improve energy efficiency:

  • Mandatory EE codes for residential buildings (2006), commercial buildings (2009), and government buildings (2011) have been adopted.
  • Minimum performance standards with mandatory labeling schemes have been adopted for refrigerators, freezers, washing machines, air conditioners, CFLs, and electric water heaters.

By 2012, 750,000 m2 of Solar Water Heaters had been installed and 10.25 million Compact Fluorescent Lamps (CFLs) had been distributed. However, there are no buildings which are built according to EE building code and no demonstration projects for energy-efficient buildings.
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Key Actors in the Energy Sector

Governmental Bodies and Agencies

The first Ministry of Electricity and Energy (MEE) was established in 1964. Next to supervising all activities related to energy projects, it suggests electricity prices and publishes data and statistics relating to electricity production.
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 acts as the national focal point for expanding efforts to develop and introduce renewable energy technologies in Egypt on a commercial scale together with implementation of related energy conservation programs. It is responsible for the development, ownership and operation of the governmental wind projects.[15]
The Egyptian Environmental Affairs Agency (EEAA) was initially established in 1982 and restructured in 1994. The EEAA serves as the executive arm of the Ministry of Environment. The agency’s activities are financed by the Environmental Protection Fund, 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 EEAA is also the national authority in charge of promoting environmental topics between Egypt and third parties.
The Egyptian Electric Utility and Consumer Protection Regulatory Agency (EgyptERA) was established upon decree in 1997. The primary task 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.
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Utilities

The government-owned and operated Egyptian Electricity Holding Company (EEHC) coordinates, supervises and monitors the activities of its affiliated companies in the field of production, transmission and distribution of electric energy. The EECH subsidiary EETC (Egyptian Electricity Transmittion Company) is responsible for the countrywide transmission of electricity to regional and local distributors.

Others

In the area of fossil power plants, Egypt already works with Independent Power Producers (IPPs). The first contract under a power purchase agreement (PPA) was signed in 1998.[16] In 2012/13, the following IPPs feed a total 33 GWh into the Egyptian electricity grid: Petrochemicals (15 GWh), Carbon Black (1 GWh), Talkha Fertilizer and Ghazl El-Mahaala (17 GWh)[9].
The private sector is also involved via the “Build-Own-Operate-Transfer” (BOOT) scheme. Four steam power plants were operated with the BOOT model in 2012/13 and provided a total of 14,264 GWh. According to EgyptERA[17], the companies under the BOOT model are Suez Gulf Power Company (4,576 GWh), Port Said East Power Company (4,983 GWh) and Sidi Krir Generating Company (4,705 GWh). The power plants operated by these companies were built in 2001-2003, with an installed capacity of 682.5 MW each. All three BOOT companies were aquired by the Malaysian Powertek Energy in 2006/2007[18].
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. EGWEA 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.
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Energy Cooperation

At the 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.

Bilateral Energy Cooperation with Germany

Along with the World Bank, the African Development Bank, the United States, France, the EU and Japan, Germany is Egypt’s leading partner in terms of official development assistance. Egypt is one of the priority partner countries of the German development policy. Since 1963, Egypt has received approximately 6 billion EUR of aggregate commitments from Germany. The current focus areas of the bilateral cooperation are water management, renewable energies, energy efficiency and climate change.[19]
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. Besides Egypt, other Arab members of the RCREEE are Algeria, Bahrain, Djibouti, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Palestine, Sudan, 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 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 GIZ.

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Further Information

References

  1. ↑ http://www.eia.gov/countries/country-data.cfm?fips=EG
  2. ↑ 2.0 2.1 http://www.iea.org/statistics/statisticssearch/report/?year=2011&country=EGYPT&product=Balances
  3. ↑ http://www.iea.org/statistics/statisticssearch/report/?year=2012&country=EGYPT&product=Balances
  4. ↑ http://www.iisd.org/GSI/sites/default/files/ffs_egypt_update_august_2014.pdf
  5. ↑ http://www.ft.com/cms/s/0/9da3cb08-007d-11e4-a3f2-00144feab7de.html#axzz3PwcopOCd
  6. ↑ http://www.iea.org/statistics/statisticssearch/report/?year=2012&country=EGYPT&product=ElectricityandHeat
  7. ↑ http://www.rcreee.org/sites/default/files/egypt_fact_sheet_re_print.pdf
  8. ↑ https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  9. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 http://www.egelec.com/mysite1/pdf/report%20E.pdf
  10. ↑ https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  11. ↑ http://english.alarabiya.net/en/business/2014/07/04/Minister-Egypt-raises-electricity-prices-.html
  12. ↑ http://www.eia.gov/countries/cab.cfm?fips=eg
  13. ↑ http://www.reuters.com/article/2014/11/05/egypt-cement-coal-idUSL6N0SU2YB20141105
  14. ↑ http://www.rcreee.org/sites/default/files/egypt_ee_fact_sheet_print.pdf
  15. ↑ https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  16. ↑ https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  17. ↑ http://egyptera.org/en/curr_egy.aspx
  18. ↑ http://www.powertek.com.my/index.php?option=com_content&view=article&id=60&Itemid=70
  19. ↑ http://www.auswaertiges-amt.de/EN/Aussenpolitik/Laender/Laenderinfos/01-Nodes/Aegypten_node.html


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