Egypt is pushing ahead with plans to expand the role of renewables in its energy mix, targeting 42% by 2030. As part of this effort, the country aims to add 4 GW of new renewable capacity this summer to help avoid power outages. With advances in battery storage technology, expanding the country’s energy storage infrastructure has become a priority.

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The bigger picture: Two years ago, Egypt joined the Battery Energy Storage Systems (BESS) Alliance, a key initiative under the Global Energy Alliance for People and Planet (GEAPP). The alliance aims to secure 5 GW of stored energy capacity by 2024 as a step toward its broader goal of 400 GW of renewables to meet global energy demand by 2030. The initiative is focused on accelerating access to reliable energy storage in developing economies, providing electricity to some 3 bn people worldwide.

A booming global market: The electricity storage sector is expected to expand sixfold by 2030, surpassing 2 TWh in capacity, with annual installations growing at a 21% annual rate, according to a recent World Economic Forum report. China is poised to dominate the market with a 43% share, followed by the US at 14%, while Europe and India are set to rank third and fourth, respectively.

RENEWABLES GENERATION IS BOOMING — AND STORAGE IS THE MISSING PIECE-

Renewables generation is surging in Egypt: There has been a significant jump in renewable electricity generation in 2Q of FY 2024-25, with government projects generating 4.45 GW and private-sector projects adding 3.28 GW, according to data seen by EnterpriseAM. Looking ahead to 2030, the country’s renewables pipeline suggests a major shift, with private-sector projects expected to account for 17.3 GW of new capacity, while government-led projects are set to shrink to just 20 MW, according to the state ownership policy document.

Demand is rising fast: The demand for solar and hybrid energy solutions has skyrocketed since April of last year, growing by more than 60%, Romany Hakeem, the chairman of Beneshty Solar and vice chairman of the Sustainable Energy Development Association told EnterpriseAM. He attributed the surge to rising electricity prices and the government’s fuel subsidy rollback.

Luckily, we have a fast-growing pipeline: By the end of 2025, Egypt’s installed renewable energy capacity is expected to reach nearly 10 GW, alongside 2.85 GW in battery storage. This is set to increase to around 12 GW and 3.35 GW of battery storage by the end of 2026. By 2029, the country aims to reach 20 GW of renewables, in addition to 3.6 GW of nuclear power and 2.4 GW of pumped storage capacity.

This is in line with plans to make Egypt a net energy exporter: Egypt is expanding rapidly intending to become a power exporter, a government source told EnterpriseAM. The government official pointed to recently inked agreements with Acwa Power, AMEA Power, and others as key to accelerating the implementation of the country’s renewables roadmap.

Storage is the missing piece: Battery storage projects will play a critical role in stabilizing Egypt’s power grid, ensuring supply reliability, and improving flexibility across the unified grid. The Electricity Ministry is prioritizing the rollout of smart grid technology to optimize energy management, particularly at hybrid power stations, according to our government source, with Chinese firms set to play a key role in leveraging the technology.

Fortuitously, ramping up storage is becoming increasingly viable: Four years ago, battery storage was expensive and out of reach, Hakeem said. But thanks to technological advancements and falling costs, storage systems have become a conceivable option, particularly in a country like Egypt which enjoys one of the world’s highest solar radiation levels year-round.

We’re already making moves on this front: UAE’s AMEA Power signed an agreement last week with the Egyptian Electricity Transmission Company to develop two battery energy storage systems with a combined capacity of 1.5 GWh. The company will set up a 500 MWh storage station in Benban and a 1 GWh facility in Zafarana, along with the necessary transformer stations and grid connections.

GOV’T IS PUSHING FORWARD POLICY CHANGES, THOUGH CHALLENGES REMAIN-

A supportive regulatory framework is taking shape: The government has introduced new regulations allowing for the purchase of stored electricity from producers, signaling a major investment push. Amendments to the Investment Act have also created unprecedented incentives not only for renewable energy production but also for expanding storage capacity, the government source told EnterpriseAM.

The country’s broader policy overhaul has been critical: Egypt has spent years rebuilding its infrastructure and refining its regulatory framework to attract private investment and international financing in the renewables sector. These efforts have positioned Egypt as one of the most attractive emerging markets for renewable energy investment, according to a cabinet report.

High import duties are a major challenge: Although the government recently reduced customs duties on solar panels and energy storage equipment to 2%, many companies still opt to pay the previous 5% rate to avoid post-import audits by the Customs Authority, Hakeem said. The verification process for lithium batteries is particularly cumbersome, as their diverse applications make it difficult for regulators to confirm they will be used in solar power projects.

Shipping restrictions are pushing up costs: Shipping agents and freight carriers continue to classify lithium batteries as high-risk cargo, imposing surcharges that significantly inflate transportation costs. In some cases, carriers outright refuse to ship them, creating additional supply chain bottlenecks.

Financing constraints remain an issue: Expanding the adoption of solar-plus-storage systems requires financial support. The high interest rate environment remains a significant barrier to scaling up residential and commercial energy storage. Egypt should establish a government-backed fund to offer zero-interest loans for energy storage solutions in residential areas and government buildings, Hakeem suggested. The fund could be financed through savings from reduced fuel and electricity subsidies.

Ready-to-use storage solutions are already on the market: Storage technology has advanced enough to provide a viable alternative to conventional generators during power outages, Hakeem noted. However, awareness of sustainable alternatives remains low, particularly outside of industries targeting exports to Europe.

Your top green economy stories for the week:

  • The Environment Ministry is in talks with China’s Sinoway to introduce afforestation technology in Egypt, focusing on restoring degraded land, reducing carbon emissions, and combating desertification while addressing water scarcity challenges. (Statement)
  • Egypt to set up the world’s largest green hydrogen plant? The General Authority for Investment and Freezones is pitching a USD 17 bn investment to build what it says will be the world’s largest green hydrogen plant in South Sinai.
  • The EU will provide a EUR 90 mn loan for the Egypt Food Resilience project, which will be used to “enhance Egypt’s food resilience by buying wheat and is a testament of the ongoing cooperation in addressing critical challenges, including food security.”
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