Egypt is looking to attract USD 60 bn of electricity production investments by 2030, but much of the planned 23 GW primarily renewables capacity risks going to waste if we don’t get serious about grid infrastructure — and soon. And the strain on the grid is only set to increase, with a further 45 GW set to be added over the next ten years, Investment Minister Hassan El Khatib said earlier this month.

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When it comes to renewables, grid infrastructure is about a whole lot more than capacity, because solar and wind are by their nature not predictable or steady sources of electricity generation and are always fluctuating in output. Unlike the type of centralized fossil fuel-run power plants the country is trying to replace, changes in wind speed, the sun going down or up, and even changes in cloud cover can cause rapid swings in electricity production, leading to potential blackouts and grid instability.

Complicating things is the concentration of wind projects along the Red Sea, positioning planned and in-the-works large-scale renewable projects far away from existing higher capacity grid infrastructure feeding Cairo and the Delta. This risks bottlenecks, where multi-bn windfarms are able to produce large amounts of energy needed elsewhere in the system, but the grid is unable to channel the energy due to a lack of high-voltage direct current transmission lines.

Solar concentration up the Nile also increases the need for new and improved grid infrastructure, given Upper Egypt’s historically much lower consumption of electricity and a grid to match.

And again, with renewables planned to account for 42% of the energy mix by 2030 and 60% by 2040, the issue will only become more pressing. In stark contrast, thermal energy accounted for 88.3% of all energy produced in the 12 months ending June 2024, according to the Egyptian Electrical Holding Company’s last available annual report (pdf).

The solution? Modern grid infrastructure built for the job. To handle large amounts of fluctuating energy production from renewable sources, advanced transformers, transmission lines and towers, substations, and battery energy storage systems are needed to ensure stable frequencies and adapt to changing inputs. The often long distances between renewables projects and the homes they power also need modern transmission lines to protect against significant electricity losses during transmission.

The lack of sufficient grid infrastructure has long been a bugbear of investors and industry insiders, but it’s also a global problem. A minimum of 3k GW of renewables projects are “waiting in grid connection queues – equivalent to five times the amount of solar PV and wind capacity added in 2022,” the International Energy Agency said in its Electricity Grids and Secure Energy Transitions report (pdf) from 2023.

The government is signalling that it recognizes the challenge, with El Khatib laying out the need for USD 45 bn in distribution infrastructure investments to integrate new clean capacity.

International backers of our renewables push are also on board, with the European Bank of Reconstruction and Development this week committing EUR 200 mn to help fuel the Egyptian Electricity Transmission Company’s grid infrastructure plans under the Nexus of Water, Food and Energy’s energy pillar.

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