{"id":553954,"date":"2021-12-14T03:57:05","date_gmt":"2021-12-14T03:57:05","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/egypts-renewables-are-on-the-rise-but-theyre-not-moving-quickly-enough\/"},"modified":"2021-12-14T03:57:05","modified_gmt":"2021-12-14T03:57:05","slug":"egypts-renewables-are-on-the-rise-but-theyre-not-moving-quickly-enough","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/egypts-renewables-are-on-the-rise-but-theyre-not-moving-quickly-enough\/","title":{"rendered":"Egypt\u2019s renewables are on the rise, but they\u2019re not moving quickly enough"},"content":{"rendered":"

The IEA says the world will add 4.8k GW of renewable energy in the next five years \u2014 <\/strong>what\u2019s Egypt\u2019s share of that growth?<\/strong> 2021 was a big year for renewable energy, with almost 290 GW of capacity expected to be added this year alone, according to the International Energy Agency\u2019s (IEA) forecast report on renewables in 2021 (pdf)<\/a>. This growth is forecast to accelerate in the next five years, with renewable electricity capacity expected to increase by over 60% between 2020 and 2026, reaching more than 4.8k GW, the IEA forecast. This is projected to account for almost 95% of the increase in global power capacity through 2026.<\/p>\n

Egypt\u2019s renewable capacity is set to rise by 68% or 4 GW over the coming five years<\/strong>, the IEA estimates. This would bring Egypt\u2019s total capacity to around 10.1 GW by 2026, up from 6.1 GW currently, according to the most recentdata (pdf)<\/a> from our New and Renewable Energy Authority (NREA).<\/p>\n

This increased capacity is expected to be led by wind power (specifically onshore)<\/strong>, which is projected to see its capacity raised by a little over 2 GW in the next five years. Our current installed wind capacity currently stands at 1.1 GW, according to NREA. Utility-scale solar (think Benban solar plants) is expected to grow at a little under 2 GW, with roof and home-installed PV taking in the remainder.<\/p>\n

As a matter of fact, we could potentially be the MENA region\u2019s biggest wind power producers in five years<\/strong>, with Morocco coming in a close second in terms of projected wind capacity growth, slightly shy of 2 GW.<\/p>\n

That said, Egypt did come in fourth in the region in terms of projected renewable energy capacity increase<\/strong>, coming in behind the UAE, which is increasing its capacity by 6 GW, Saudi Arabia (also 6 GW), Israel (5.2 GW), and only narrowly beating out Morocco (3.8 GW). We are expected to make up 12.5% of the region\u2019s expected 32 GW in new renewable energy capacities in 5 years.<\/p>\n

Private sector driven growth: <\/strong>The big driver for this jump will be \u201cunsolicited bilateral contracts with the state-owned utility,\u201d the IEA notes. This effectively means private sector developers building and operating plants and selling the power to the Egyptian Electricity Transmission Company, which would then distribute to homes. This would imply that the private sector will see a bigger share of renewable energy generation in the coming five years. Currently, the private sector generates about 2.1 GW or 34.4% of Egypt\u2019s installed renewable capacity.<\/p>\n

The pipeline:<\/strong> Electricity Minister Mohamed Shaker announced plans late last year<\/a> to authorize 2.4 GW of renewable energy projects by 2022, with the ministry tapping international players to build wind farms capable of producing 1.7 GW costing a combined USD 1.5 bn to implement, the sources said. We plan to bring you details of Egypt\u2019s pipeline of projects when we do our Year in Review. <\/strong><\/p>\n

Beware the great electricity glut: <\/strong>Our push to expand our renewables is not without risks, with the biggest threat being our overcapacity, warns the report. We\u2019ve extensively covered last year<\/a>how Egypt\u2019s oversupply \u2014 which sees us being able to generate around 60 GW but with a peak demand of only around 30 GW \u2014 has hurt renewable energy projects. The government took steps to limit renewable energy generation so as to not exacerbate the oversupply issue, largely through changes to Egypt\u2019s net metering system \u2014 a pay-as-you-go billing system for renewable energy producers, which the report takes note of. It also states that the government canceled an independent power producer auction for a 200 MW of solar PV.<\/p>\n

And covid: <\/strong>Not noted in the report, however, is the risk from covid-induced inflation and supply chain woes. ACWA Power and Al Nowais both put in requests to the government to delay their projects back in September<\/a>, with reports citing rising shipping costs and an increase in the prices of solar cells. Al Nowais itself had been looking to sell its Benban solar park license in order to fund its ongoing projects, the local press reported<\/a> at the time.<\/p>\n

A long way to go still: <\/strong>While a 68% growth in five years is nothing to balk at, Egypt did up its renewables targets at COP26, with the government announcing that it wants renewable energy to make up 42%<\/a> of the country\u2019s electricity generation by 2030, moving the deadline forward by five years. That would mean quadrupling our current share of renewable energy as a proportion of total capacity in the next eight years. That would require a combination of rapid renewable energy development at the expense of new fossil fuel plants (which we saw with the ACWA Power plant in Luxor) coupled with increasing electricity exports through grid connection projects (we already have agreements with Saudi, Jordan, Iraq, Cyprus and Greece) and a winding down of existing fossil fuel plants.<\/p>\n

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