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Egypt Energy Situation

From energypedia
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.

102,334,403 (2020)

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 (2020)

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.

363,069,245,165 (2020)

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

3,547.87 (2020)

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

no data

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



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Introduction

The Arab Republic of Egypt is located in North Africa and borders with Libya in the West, Sudan in the South and Palestinian territories and Israel in the East, while in the North, it is washed by the Mediterranean. 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.


Fig.1: Map of Egypt showing Examples of N.G. & C.O. Pipelines, Ports, Fields..etc (EIA, 2018)


Egypty is a country with a high potential of natural resources: precious stones, natural gas, oil, coal and large reserves of fossil fuel enery sources; approximately 4189 billion barrels of oil reserves and an estimated 77200 billion cubic meters of natural gas resreves, as the reserves are in the form of both mainland and coastal deposits[1].


While more than 90% of the Egyptian generated electricity comes only from oil and natural gas, the major problem that Egypt encounters, especially in the energy-sector is the dynamic growth of population, which is estimated by around 1.3% per year, consequently increasing demand, which eventually fastens the rate of depleting the country's major resources[2][3][1][4].


According to the US Energy Information Administration (EIA), it is the largest non-OPEC oil producer in Africa and the third largest dry natural gas producer on the continent, following Algeria & Nigeria[5].


The country also represents a vital role-player in the international energy market, as a major transit route, by operating the Suez Canal and the Suez Mediterranean Pipleline (SUMED)[6], through which the oil is shipped from the Persian Gulf to Europe and the United States[3][5].


Energy Situation

Historical Background and an Overview of the Main Energy Sources

Egypt has been known to mainly depend, in all its energy-related activities, on three major sources: oil, natural gas and the hydroelectric power generated from the large dam projects over the Nile: the High Dam, Aswan I & Aswan II[3][4][7].


Despite being a major producer and net exporter of oil, especially in the 1990s, when its oil production peaked, reaching approximately over 900000 bbl/day, Egypt has become a net oil importer around 2009/2010[4]. Thus can be traced back to both economic and population accelerated growth, which accompanied the beginning of the new millennium, leading to an increase in consumption by about 3% per year, resulting in growing of demand, and falling in production, that could roughly meet consumption requirements, resulting in a significant drop in the country’s oil refinery output since 2009[3][4].


During the period of the late 1990s/early 2000s, Egypt has witnessed a state of proliferation of discovering and exploiting huge natural gas reserves around the country, which drove the country to emerge as a key role player in the region as a natural gas producer and exporter[3]. Mainly, due to the same reason as in oil, consumption of natural gas has approximately increased by 7% per year during the first decade of 2000s, and production has noticeably decreased by around 3% yearly during the period of 2009-2013, consequently limiting its natural gas exporting capacity to only 5% of its total production by 2013, and eventually driving the country to start signing importing agreements in the following years of 2014 and 2015[3][4].


Table.1: General Statistics on Oil & Natural Gas Situation in Egypt[4]


Oil
Natural Gas
Total Production 680,000 bbl/day 2 trillion cubic feet/day
Global Production-Share
0.72%
1.7%
Proven Reserves
3,900,000,000 bbl
65.3 trillion cubic feet
Global Proven Reserves-Share
0.2%
1%
 % Total Domestic Consumption
41% 53%
Imports 80,000 bbl/day
To Be Updated
Exports 189,000 bbl/day
0.1 trillion cubic feet/year

Export Destinations

EU (56%), India (28%), China (13%), Others (3%)

EU (56%), India (28%), China (13%), Others (3%)


According to reports from American Security Project (ASP) and United Nations Environment Program (UNEP), Egypt has produced approximately 13.2-13.7 billion kilowatt-hours (KWh) of electricity, using hydropower in the period 2012/2013[4][7].


Hydropower accounts for about 9% of the total country’s power generation, and around 3% of the country’s total energy consumption, however, the majority of the Nile hydropower’s capacity in Egypt has already been exploited and is declining[4][7].


Energy Access

According to the latest Tracking SDG7 Report on The Energy Progress, that was jointly prepared by:International Energy Agency (IEA), International Renewable Energy Agency (IRENA), United Nations Statistics Division, World Bank Group and World Health Organization, the state of energy access through Egypt is illustrated through the following table and figures[8]:


Fig.2: Total Energy Access in Egypt 1990-2015 (Tracking SDG7, 2018)
Fig.2: Total Energy Access in Egypt 1990-2015 (Tracking SDG7, 2018)


The report shows that since around 2014/2015, the total Egyptian population has had access to reliable energy sources, and only 2% of the whole population has no access to clean cooking[8].


Fig.3: Urban & Rural Energy Access in Egypt 1990-2015 (Tracking SDG7, 2018)
Fig.3: Urban & Rural Energy Access in Egypt 1990-2015 (Tracking SDG7, 2018)


Table.2: Percentage of Egyptian Population's Access to Electricity & Clean Cooking[8]


Access to
Electricity Clean Cooking
 % of Population 100% 98%


Production 

Table.3: Egypt’s Production of Different Energy Sources during the 2000s in Ktoe[9]


2000 2005 2012 2013 2014 2015 2016 2017
Coal 20 14 0 0 0 0 0 0
Crude Oil 33189 30111 32142 29537 32825 33210 30835 31885
Natural gas 18555 35901 54839 50143 39084 34763 34763 35362
Electricity from Fossil Fuels 5302 8211 12250 12250 13431 14355 14514 14679
Hydro Electricity 1260 1087 1112 1113 1188 1155 1171 1187
Electricity from Renewables  12 47 139 139 145 137 150 165
Refinery/Oil Porducts 23449 28561 24754 21836 25348 25676 26357 270565


Installed Capacity

With accordance to the EIA's report on Egypt (2018), the following graph and pie-chart highlight the installed capacity of different energ sources in the country from 2007-2016 in terms of fiscal years.


Fig.4: Egyptian Installed Capacity of Different Energy Sources per Fiscal Year 2007-2016 (EIA, 2018)
Fig.4: Egyptian Installed Capacity of Different Energy Sources per Fiscal Year 2007-2016 (EIA, 2018)

Fig.5: Egyptian Installed Capacity of Different Energy Sources by the Fiscal Year 2015-2016 (EIA, 2018)
Fig.5: Egyptian Installed Capacity of Different Energy Sources by the Fiscal Year 2015-2016 (EIA, 2018)


Consumption

Egypt is by far the largest consumer of oil and natural gas in Africa, showing 22% of petroleum and other liquids of the continent's total consumption and 37% of its dry natural gas consumption[5].


The main drivers of the rapid growth of the country's consumption of oil and natural gas can be summarized in the follwoing[5]:

  1. The increased industrial output.
  2. Economic growth.
  3. Intense extraction projects of oil and natural gas.
  4. Population growth.
  5. The inclining rate of private and commercial vehicle sales.
  6. The generous subsidy policy, that is focused on energy products.


Through this sub-chapter, different consumption data will be presented, using different sources, to get a holistic view as possible of the energy consumption situation in the country.


Table.4: Egypt’s Primary Energy Consumption since 1965 in Mtoe[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Rate 7.8 10.5 28 37.3 48.4 60.5 78.4 84.4 88.2 91.6


Table.5: Egypt’s Primary Energy Consumption by Fuel 2016-2017 Mtoe[10]


Oil Natural Gas Coal Nuclear Hydro-Electric Renewables Total
2016 42 42.4 .2 - 3 .6 88.2
2017 39.7 48.1 .2 - 3 .6 91.6


Table.6: Egypt’s Final Consumption of Different Energy Sources during the 2000s in Ktoe[9]


2000 2005 2012 2013 2014 2015 2016 2017
Coal 453 203 204 188 188 200 211 224
Oil 17898 20156 27009 22573 26333 35213 36086 37028
Natural Gas 4274 9182 12719 18202 19505 20956 21446 21960
Electricity 5559 7918 12060 12324 12306 12668 13134 13630


Table.7: Egypt’s Industrial Consumption of Different Energy Sources during the 2000s in Ktoe[9]


2000 2005 2012 2013 2014 2015 2016 2017
Oil 5461 5548 3716 3279 3133 6369 6713 7080
Natural Gas 2072 5567 6649 6789 8002 9083 9303 9536
Electricity 2111 2812 3430 3500 3288 369 3488 3612
Coal 453 203 204 188 188 200 211 224


Table.8: Egypt’s Transport Consumption of Different Energy Sources during the 2000s in Ktoe[9]


2000 2005 2012 2013 2014 2015 2016 2017
Oil 9060 9371 15547 12362 16416 16892 17098 17312
Electricity - - 44 44 45 46 46 47


Fig.6: A Pie-Chart of the Egyptian Primary Energy Consumption in the Year 2016 (EIA, 2018)


Import and Export

Egypt is a net exporter of crude oil and natural gas, however, the combination of increasing consumption and declining production has led to a decline in natural gas exports since 2009, as the government started to divert natural gas supplies from exports, in order to satisfy domestic demand, eventually turning the country into a natural gas importer since 2015[5]


In terms of coal and peat, Egypt is a net importer, and coal imports are even expected to increase in the short-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[11]. 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 [12].

Electricity

General Data

Table.9: The General Electricity Situation in Egypt[13]


Electricity
Production Consumption
Exports Imports
Installed Generating Capacity
Rate 171.9 billion kWh 150.4 billion kWh 1.158 billion kWh 43 million kWh 38.88 million kWh
World Ranking 24 25 57 106 27


Electricity Access

According to the U.S. Central Intelligence Agency (CIA)'s 2018 report, only around 300,000 people of the whole Egyptian population is currently without access to electricity.

Table.10: Electrification Percentages in Egypt[13]


Electrification
Total Population Urban Areas Rural Areas
 % 99.6 100 99.3


Installed Capacity and Generation

Table.11: Percentages of Different Electricity-Generating Energy-Sources in Egypt[13]


Electricity Generated From:
Fossil Fuels

Nuclear Fuels

Hydroelectric Plants Other Renewables
 % of the Total Installed Capacity 90.5 0 7.3 2.2
World Ranking 58 83 125 115


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 12.

Table 12: Installed capacity development by type of generation (in MW) 2008-2013[14]


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 of network losses were 11.02%.[14]


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%).[14] 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.[15]


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 use of domestic appliances, air conditioners in particular, during hot weather. The development of the electricity consumption per sector is outlined in table 13.

Table 13: Electricity consumption by sector (GWh) 2008-2013 [14]

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[14] for interconnections with Saudi Arabia, Sudan, the Democratic Republic of Congo, the Eastern Nile Basin (Sudan and Ethiopia) and Greece.


Table.14: Indicators of Egyptian Grid[16]

Category Installed Capacity Max Load Transmission Grid Generated Energy
Indicator 45192 MW 30400 MW 45000 Km 186320 GWh


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 the 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 to 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[17].


Energy Security

Despite the lack of profound resources and information, and the ambiguity of available data regarding energy security in Egypt, yet Atlam & Rapiea (2016)’s study on “Assessing the Future Energy Security in Egypt” can be used as a firm basis for investigating the energy security situation in the country.[2].

Renewable Energy

General Data

Table.15: Egyptian Renewable Energy Production since 1965 in Twh[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Produced Capacity - - - - .1 .5 1.4 1.9 2.6 2.7


Table.16: Egyptian Renewable Energy Consumption since 1965 in Mtoe[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Consumed Capacity - - - - - .1 .3 .4 .6 .6


Fig.7: Egyptian Electricity Generation from Renewables by Source (IEA, 2017)


FIg.8: Generation-Share of Different Renewable Energy Sources in Egypt in 2015 (IEA, 2017)


In 2012, electricity production from renewable energy sources reached 14,855 GWh[18], 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%).


Hydro

Table.17: Egyptian Hydro-Generation since 1965 in Twh[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Generated Capacity 1.7 6.8 9.1 11.2 14.2 12.6 13 13.7 13.3 13.4


Table.18: Egyptian Hydro-Consumption from since 1965 in Mtoe[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Consumed Capacity .4 1.5 2.1 2.5 3.2 2.9 2.9 3.1 3 3


Fig.9: Egyptian Hydro-Generation (IEA, 2017)


The latest estimates of the hydropower installed capacity are approximately 2842 MW, accounting for about 7.2-9% of the total generated mix[16][5]. Also, the ongoing implementation of 32 MW hydropower project in Assiut governorate and a 2400 MW pumping and storage plant in Attaqa-Suez, that is supposed to be operating by 2022, according to the Egyptian Ministry of Electricity and Renewable Energy & the Egyptian Holding Electricity Company[16].

Table.19: Egypt's Hydroelectric Plants[5]

Operator Comissioning Date Installed Capacity (MW)
High Dam 1967 2100
Aswan Dam 1 1960 280
Aswan Dam 2 1985/86 270
Esna  1993 86
Nag' Hamadi 2008 64

 

Wind

Table.20: Egyptian Wind-Power Generation since 1965 in Twh[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Generation Capacity - - - - .1 .5 1.4 1.9 2.5 2.5


Table.21: Egyptian Wind-Energy Consumption since 1965 in Mtoe[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Consumed Capacity - - - - - .1 .3 .4 .6 .6


Fig.10: Egyptian Wind-Energy Generation (IEA, 2017)


Egypt is endowed with abundant wind energy resources, with many coastal regions, where high and stable wind speeds are frequent, especially in the Gulf of Suez and the Nile Valley, as wind speed could reach 10.5 m/s at 50m height[16][5].


Table.22: Egyptian Wind Indicators[16][5]

Indicator Installed Capacity Generated Energy Fuel Savings CO2 Reductions Potential Capacities
Value 750-753 MW 12600 GWh 2.7 Mtoe 6.8 Million Tons 30000 MW


Table.23: Egyptian Major Wind Farms[5]

Farm Za'farana Gebel El-Zeit Hurghada
Generated Capacity 547 MW 200 MW 5 MW


Solar

Table.24: Egyptian Solar Production since 1965 in Twh[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Procution Capacity - - - - - <.1 .1 .1 .1 .2


Table.25: Egyptian Solar Consumption since 1965 in Mtoe[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Consumption Capacity - - - - <.1 <.1 <.1 <.1 <.1 <.1


Fig.11: Egyptian Solar Generation (IEA, 2017)


Though solar energy use in the country is still in its infancy, yet the country has a great potential in the solar sector. With accordance to the EIA's latest report, the country only has 30 MW of installed solar capacity so far[5]. 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 the start of operation 2016).[19]

Also, the Egyptian government has a huge scheme to boost the solar sector by installing a 1.8 GW solar park, which to be developed in Benban[5]. As part of reaching that goal, the Egyptian government has closed two deals on two different fronts; the 1st is with Norway's Scatec Solar to build six solar photovoltaic plants with a combined capacity of 400 MW, while the 2nd is with Saudi firma Acwa for another three solar photovoltaic plants with a capacity of 120 MW[5].


Table.26: Egyptian Solar Potential Indicators[16]

Indicator Direct Solar Radiaton Sunshine Duration Potential Capacities
Value 2000-3000 kWh/m2/year 9-11 hours/day >50000 MW


Fossil Fuels

Oil

Table.27: Egyptian Proved Oil Reserves since 1980 in Barrels[10]

Year 1980 1990 2000 2010 2015 2016 2017
Reserves (Thosuand million barrel) 2.9 3.5 3.6 4.5 3.5 3.4 3.3


Table.28: Egyptian Oil Production in Barrels since 1965[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Prduction (1000 barrels/day) 126 228 882 924 779 672 725 726 691 660


Table.29: Egyptian Oil Consumption since 1965[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Consumption (1000 barrels/day) 131 159 406 463 552 617 766 833 854 816


Table.30: Egyptian Refinery/Oil Products' Production since 1980[10]

Year 1980 1990 2000 2010 2015 2016 2017
Output (1000 barrels/day) 277 489 497 580 530 509 508


Table.31: Egyptian Refinery/Oil Products' Production Capacity since 1965[10]

Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Capacity (1000 barrels/day) 181 201 433 633 654 810 810 810 810 810


Fig.12: Egyptian Annual Petroleum & Other Oil-Products Production, Consumption, Net Exports & Net Imports (EIA, 2018)


Fig.13: Egyptian Production of Crude Oil & Other Oil-Products (IEA, 2017)


Fig.14: Final Egyptian Consumption of Oil & Oil-Products (IEA, 2017)


Fig.15: Egyptian Oil-Products Consumption By Sector


Natural Gas

Table.32: Egyptian Proved Natural Gas Reserves since 1980 in Tcm[10]
Year 1980 1990 2000 2010 2015 2016 2017
Estimated Reserves .1 .4 1.4 2.1 1.8 1.8 1.8


Table.33: Egyptian Natural Gas Production in Bcm since 1970[10]
Year 1970 1980 1990 2000 2010 2015 2016 2017
Production Capacity .1 2.1 7.8 20.2 59 42.6 40.3 49


Table.34: Egyptian Natural Gas Consumption since 1965[10]
Year 1965 1975 1985 1995 2000 2005 2010 2015 2016 2017
Consumption Capacity (Bcm) <.1 <.1 4.7 12.1 19.3 30.4 43.4 46 49.4 56


Fig.16: Egyptian Natural Gas Production, Consumption, Net Exports, Net Imports (EIA, 2018)


Fig,17: Egyptian Natural Gas Production (IEA, 2017)


Fig.18: Egyptian Natural Gas Consumption (IEA, 2017)


Fig.19: Egyptian Sectorial Natural Gas Consumption (IEA, 2017)



Key Problems of the Energy Sector

The main and utmost challenge that Egypt currently faces, that is mentioned in almost any literature that is related to energy in Egypt, is the un-controlable and continuously increasing population growth. Yet, the Egyptian energy sector has few other challenges that need to be dealt with adequately and seriously, otherwise Egypt will have to deal with a catastrophic energy situation within the few years to come. These challenges can be summarized in the following points:

  1. The decline of Egyptian oil and natural gas reserves; as proved oil reserves have decreased from 4.5 million barrels in 2009 to 4.2 million barrels in 2013, while natural gas reserves have decreased from 78 trillion cubic feet in 2010 to 77.2 trillion cubic feet in 2014[2][3][4][5].
  2. The fact that the current Egyptian energy mixture is not properly diversified, as Egypt, heavily and mainly depends on oil, natural gas and the hydroelectric power from the Nile, with the third being close to nothing and even descending more, then Egypt is left with only both oil and natural gas representing approximately 90.4-94.4% of the total primary energy consumption till 2014[2][3][4].
  3. The gap between supply and demand of oil, since the supply ratio is about 52.7% of the demand[2][3][5].
  4. The majority of the Egyptian imported oil (~4.9 million tons), comes only from three suppliers: Kuwait, Iraq and Oman –according to the Egyptian Ministry of Petroleum- in 2014[2]Such a low variety of oil importers increases the probability of the risk of Egypt being negatively affected by any geopolitical instabilities in one or all of these importers, consequently affecting its ability to secure domestic demands in such situations[2].
  5. The low percentage of private investment in the energy sector (~16% in 2014/15), which in a way confines and hinders the technological aspects of energy production, distribution and consumption[2][3][4].
  6. The aging, un-maintained, low to non-efficient, mal-planned Egyptian infrastructure, especially in the energy sectors, which when faced with any sign of major problem, would lead to catastrophic outcomes, as for example, the daily blackouts of 2013 and 2014 summers, where electricity used to be completely absent allover Egypt for 6-8 hours/day through different times of the day[2][3][4].
  7. The non-existence of clear, to the point and profound strategies to be properly integrated in the Egyptian energy sector, and the un-clarity and complete randomness of the existent mixed ones, which are mostly unreliable, un-applicable strategies designed by totally different and varied institutions and energy-suppliers with different agendas and mentalities, eventually hindering any possible appropriate application or planning a proper solution(s) to secure energy supply[2].



Policy Framework, Laws and Regulations

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 enormous public deficit. As of June 2014, Egypt owed 7.5 billion USD and counting to foreign oil and gas companies alone [20]. 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[21].

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 through 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 new Presidential Decree 1947/2014 of October 2014 provides 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.

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 Minister's 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[22].
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.

Institutional Set up in the Energy Sector

Governmental Bodies, Agencies & Utilities

Table.35: Egyptian Energy-Sector Governmental Bodies/Agencies[23]
Body/Agency Abbreviation Establishment Role
Ministry of Electricity and Energy MOEE 1964
  • Supervising all activities related to energy projects
  • Suggesting electricity prices
  • Publishing data and statistics relating to electricity production
 New and Renewable Energy Authority
NREA 1986, by MOEE
  • Bundling activities aiming to promote both renewable energy soures and energy efficiency
  • Acts as the national focal point for expanding efforts to introduce and develop renewable technologies in Egypt
  • Implementation of related energy conservation programs
  • Responsible for development, ownership and operation of governmental wind projects
Egyptian Environmental Affairs Agency EEAA 1982, and restructured in 1994
  • Executive arm of the Ministry of Environment
  • Formulation of environmental policies
  • Development and monitoring of projects
  • Implementation of pilot projects
  • Tha national autority in charge of promoting environmental topics
Egyptian Electric Utility and Consumer Protection Regulatory Agency  EgyptERA 1997, upon decree
  • Balance the interests of electricity producers, providers and end users
  • Ensure reliable long term supply of electriciy
  • Promoting and supervising environmental protection and operational reliability in the energy sector
  • Licensing the construction and operation of electricity generation, transmission and distribution facilities
  • Electricity trading
Egyptian Electricity Holding Company  EEHC 2000, As a result of major institutional reform tha took place through law 164
  • Coordinates, supervises and monitors the activities of its affiliated companies in the fields of production, transmission and distribution of electric energy.
Egyptian Energy Transmission Company  EETC 1976
  • Responsible for the country-wide transmission of electricity to regional and local distributors.


The current Egyptian electricity market is completely composed of governmental owned utilities, which can be divided into: 6 for generation, 1 for transmission and 9 for distribution[23], which all are operating under the direct management of the EEHC, as shown in the following figure (Fig.20)[23].


Fig.20: Egypt Sectorial Structure (Peter et al., 2015)


On the other hand, the whole petroleum sector in Egypt is run by main five state-owned enterprises, with accordance to the latest EIA's Egypt's analysis brief (2018), which can be summarized in the following table.


Table.36: Egypt's Petroleum Sector Main Enterprises[5]
Enterprise Abbreviaton Establishment Role
Egyptian General Petroleum Corporation EGPC 1956
  • Manage upstream oil activities
  • Issue upstream licenses

(Focus on activities the country, except Southern)

Egyptian Natural Gas Holding Company EGAS 2001
  • Oversees the development, production and marketing of natural gas
  • Organizing international exploration bid rounds
  • Awarding natural gas exploration licenses
Egyptian Petrochemicals Holding Company ECHEM 2002
  • Developing the petrochemical sector
Egyptian Mineral Resources Authority EMRA 1896
  • Mineral resources assessment
  • Geological mapping of the country
Ganoub El-Wadi Holding Company Ganope 2003
  • Manage upstream oil activities
  • Issue upstream licenses

(Focus on activities in the Southern Region) 



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.[24]In 2012/13, the following IPPs feed a total 33 GWh into the Egyptian electricity grid: Petrochemicals (15 GWh), Carbon Black (1 GWh), Talkha Fertilizerand Ghazl El-Mahaala (17 GWh)[14].


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[25], 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 acquired by the Malaysian Powertek Energy in 2006/2007[26].


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.


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.[27]


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.


Other Key Actors / Activities of Donors, Implementing Agencies, Civil Society Organisations


Further Information

References

  1. 1.0 1.1 Obukhov. S. & Ibrahim A. (2017). Analysis of the Energy Potential of Renewable Energy Sources Egypt. MATEC Web Conference 141, 01035. Retrieved From: https://www.matec-conferences.org/articles/matecconf/pdf/2017/55/matecconf_smartgrids2017_01035.pdf
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 2.9 Atlam, B. and Rapiea, A. (2016). Assessing the Future of Energy Security in Egypt. International Journal of Energy Economics and Policy. Vol, 6(4): 684-700. Retrieved From: http://www.econjournals.com/index.php/ijeep/article/view/2777/1930
  3. 3.00 3.01 3.02 3.03 3.04 3.05 3.06 3.07 3.08 3.09 3.10 Hegazy, K. (2015). Energy Charter Secretariat Knowledge Centre’s Occasional Paper on Egypt’s Energy Sector: Regional Cooperation Outlook and Prospects of Furthering Engagement with The Energy Charter. Retrieved From: https://energycharter.org/fileadmin/DocumentsMedia/Occasional/Egypt_and_the_Charter.pdf
  4. 4.00 4.01 4.02 4.03 4.04 4.05 4.06 4.07 4.08 4.09 4.10 4.11 Park, S. (2015). American Security Project (ASP)’s Report on Energy in Egypt: Background and Issues. Retrieved From: https://www.americansecurityproject.org/wp-content/uploads/2015/03/Ref-0190-Energy-in-Egypt-Background-and-Issues.pdf
  5. 5.00 5.01 5.02 5.03 5.04 5.05 5.06 5.07 5.08 5.09 5.10 5.11 5.12 5.13 5.14 5.15 U.S. Energy Information Administration (EIA). (2018). Country Analysis Brief: Egypt. Retrieved From: https://www.eia.gov/beta/international/analysis_includes/countries_long/Egypt/egypt.pdf
  6. http://www.iea.org/statistics/statisticssearch/report/?year=2011&country=EGYPT&product=Balances
  7. 7.0 7.1 7.2 United Nations Environment Program (UNEP). (2017). Energy Profile: Egypt. Retrieved From: https://wedocs.unep.org/bitstream/handle/20.500.11822/20490/Energy_profile_Egypt.pdf?sequence=1&isAllowed=y
  8. 8.0 8.1 8.2 Tracking SDG7. (2018). The Energy Progress Report. Retrieved From: https://trackingsdg7.esmap.org/data/files/download-documents/tracking_sdg7-the_energy_progress_report_full_report.pdf
  9. 9.0 9.1 9.2 9.3 African Energy Commission (AFREC). (2017). Africa Energy Database. Retrieved From: https://afrec-energy.org/Docs/En/PDF/2017/statistics_2017_afrec.pdf
  10. 10.00 10.01 10.02 10.03 10.04 10.05 10.06 10.07 10.08 10.09 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 BP. (2018). BP Statistical Review of World Energy. Retrieved From: https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy/downloads.html
  11. http://www.iisd.org/GSI/sites/default/files/ffs_egypt_update_august_2014.pdf
  12. http://www.ft.com/cms/s/0/9da3cb08-007d-11e4-a3f2-00144feab7de.html#axzz3PwcopOCd
  13. 13.0 13.1 13.2 Central Intelligence Agency (CIA). (2018). The World FactBook: Africa: Egypt. Retrieved From: https://www.cia.gov/library/publications/the-world-factbook/geos/eg.html
  14. 14.0 14.1 14.2 14.3 14.4 14.5 http://www.egelec.com/mysite1/pdf/report%20E.pdf
  15. https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  16. 16.0 16.1 16.2 16.3 16.4 16.5 Abo Salem, A. (2017). Egyptian Renewable Energy Plan. Retrieved From: http://auptde.org/Article_Files/Egypt.pdf
  17. http://english.alarabiya.net/en/business/2014/07/04/Minister-Egypt-raises-electricity-prices-.html
  18. http://www.iea.org/statistics/statisticssearch/report/?year=2012&country=EGYPT&product=ElectricityandHeat
  19. https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  20. http://www.eia.gov/countries/cab.cfm?fips=eg
  21. http://www.reuters.com/article/2014/11/05/egypt-cement-coal-idUSL6N0SU2YB20141105
  22. http://www.rcreee.org/sites/default/files/egypt_ee_fact_sheet_print.pdf
  23. 23.0 23.1 23.2 Meier, P. Vagliasindi, M. Imran, M. Eberhard, A. & Siyambalapitiya, T. (2015). The Design and Sustainability of Renewable Energy Incentives: An Economic Analysis. Retrieved From: https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  24. https://openknowledge.worldbank.org/bitstream/handle/10986/20524/922240PUB0978100Box385358B00PUBLIC0.pdf?sequence=1
  25. http://egyptera.org/en/curr_egy.aspx
  26. http://www.powertek.com.my/index.php?option=com_content&view=article&id=60&Itemid=70
  27. http://www.auswaertiges-amt.de/EN/Aussenpolitik/Laender/Laenderinfos/01-Nodes/Aegypten_node.html


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