{"id":606633,"date":"2023-09-19T00:00:00","date_gmt":"2023-09-19T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/is-egypt-still-a-leader-in-the-regions-green-transition\/"},"modified":"2023-09-19T00:00:00","modified_gmt":"2023-09-19T00:00:00","slug":"is-egypt-still-a-leader-in-the-regions-green-transition","status":"publish","type":"goinggreen","link":"https:\/\/enterpriseam.com\/egypt\/goinggreens\/is-egypt-still-a-leader-in-the-regions-green-transition\/","title":{"rendered":"Is Egypt still a leader in the region\u2019s green transition?"},"content":{"rendered":"

MENA is undergoing a green energy boom: <\/strong>The region has operationalized some 6.9 GW of solar and wind capacity since May 2022, increasing the region\u2019s solar and wind power production 57% to 19 GW, according to a report (pdf)<\/a> by US-based clean-energy think tank Global Energy Monitor<\/a>. With 9 GW of renewables projects slated for completion by the end of 2024, that capacity is expected to increase again by around 50% next year.<\/p>\n

The capacity of solar and wind projects in the pipeline jumped 400% y-o-y: <\/strong> MENA has nearly 361 GW<\/a> worth of prospective solar and wind projects on the way, an increase of 292 GW on the year before, according to the think tank. That\u2019s more than the total prospective capacity of the US and Canada combined. However, just 6% of this proposed capacity is under construction, while 47% is in pre-construction \u2014 i.e. they have secured financing, government permitting, land rights, or formal power purchase agreements. The remainder of the prospective capacity is wrapped up in announced projects, which often don\u2019t end up seeing the light of day.<\/p>\n

Wind farms have been eclipsed by solar projects: <\/strong>A whopping 97.1% of the region\u2019s capacity operationalized since May 2022 is solar capacity, with wind continuing to be underutilized in the region despite the resource\u2019s strong potential<\/a> in nearly all countries. Only Mauritania and Morocco have grown their operating wind capacity during the period, bringing online a combined 226 MW.<\/p>\n

But is Egypt falling behind in the region\u2019s green transition? <\/strong> The UAE has more than doubled its operating utility-scale solar and wind capacity to 5.6 GW between May 2022 and May 2023, overtaking Egypt as the MENA region\u2019s best performer in that metric, according to Global Energy Monitor. We\u2019re now in second place with local utility-scale projects generating a total of around 3.7 GW, up only 5.9% from May last year. Alongside Oman and Morocco, the UAE has emerged as one of the \u201cpotential renewable leaders in the region,\u201d the NGO writes.<\/p>\n

We were also pushed out from first place for prospective solar + wind energy: <\/strong> Egypt was also surpassed in prospective capacity \u2014 capacity from projects that are either announced or being built \u2014 by Oman, which grew its prospective utility-scale solar and wind capacity more than fivefold to 83 GW since May 2022. Egypt currently has a prospective capacity of 69.2 GW, of which 95.2% was penciled in during the past year. <\/p>\n

We knew the winds of change were coming: <\/strong>Global Energy Monitor last year predicted<\/a> that we could lose our top spot as the Arab League pursues an ambitious plan to push regional renewable energy capacity to 80 GW by 2030.<\/p>\n

Yes, but: <\/strong> Despite progress, the region is still \u201clight years from dethroning oil and gas,\u201d says Kasandra O'Malia<\/a>, project manager at Global Energy Monitor. Some 90% of the region\u2019s electricity comes from oil and gas. It would take roughly 500 GW of additional solar and wind power \u2014 26 times the current capacity \u2014 to replace the region\u2019s 343-GW oil and gas plants. Additionally, 18 of the 23 countries examined in the report still plan to bring online more oil and gas plants. <\/p>\n

Most of MENA\u2019s prospective renewable energy won\u2019t go towards decarbonizing our <\/strong> electricity grids: <\/strong> Some 60% of the region\u2019s prospective renewable energy is earmarked for export as green hydrogen, meaning it won\u2019t help the region\u2019s national electricity grids transition away from fossil fuels.<\/p>\n

All things considered, we\u2019re behind our global peers: <\/strong> To put things into perspective, South America \u2014 whose population and GDP are similar to the region\u2019s \u2014 has operationalized more than four times the capacity that MENA did in the past year, adding some 32 GW to its solar and wind energy capacity. <\/p>\n

But financial incentives could catalyze the region\u2019s green transition: <\/strong>The region has set global records for the lowest levelized cost of energy (LCOE) for solar<\/a> and wind<\/a> projects. The declining cost of renewables could discourage the construction of new oil and gas power plants and expose existing fossil fuel plants to the risk of becoming stranded assets.<\/p>\n

Gulf sovereign wealth funds are also investing big in solar and wind \u2014 including here: <\/strong>Saudi Arabia\u2019s Public investment fund and Abu Dhabi\u2019s Mubadala have been leading the charge with investments in over 46 GW of renewable capacity abroad, 22% of which is earmarked for Egypt. Saudi Arabia\u2019s ACWA Power<\/a> and the UAE\u2019s Masdar-led consortium<\/a> both secured land in Sohag for 10-GW wind projects in the past two months. Acwa Power is also reportedly eyeing up a tender for five solar power plants on the North Coast and in April secured USD 114 mn in backing from a consortium of international lenders for a 200 MW solar power plant<\/a> in Kom Ombo.<\/p>\n

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