{"id":669666,"date":"2025-08-06T00:00:00","date_gmt":"2025-08-06T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/hardhats\/a-liberal-electricity-market-is-coming-but-how-ready-is-the-grid\/"},"modified":"2025-08-06T00:00:00","modified_gmt":"2025-08-06T00:00:00","slug":"a-liberal-electricity-market-is-coming-but-how-ready-is-the-grid","status":"publish","type":"hardhat","link":"https:\/\/enterpriseam.com\/egypt\/hardhats\/a-liberal-electricity-market-is-coming-but-how-ready-is-the-grid\/","title":{"rendered":"A liberal electricity market is coming, but how ready is the grid?"},"content":{"rendered":"

The governme<\/strong>nt is advancing measures to liberalize the electricity market and upgrade <\/strong>the grid<\/strong>, two government sources told EnterpriseAM. Qualification certificates have already been granted to four players in the sector to establish renewable power plants that supply electricity to private sector clients using the national electricity transmission grid.<\/p>\n

(Tap or click the headline above to read this story with all of the links <\/strong>to our background as well as external sources.)<\/p>\n

Four companies \u2014 Enara, Neptune, Amea Power, and Taqa PV \u2014 have so far been<\/strong> approved<\/a><\/strong> under a peer-to-peer (P2P) framework<\/strong>, giving them licenses to sell electricity to high-and ultra-high-voltage consumers. The four companies will each produce energy from 100 MW certified wind and solar projects, which together have a total investment of USD 388 mn. The power will be sold directly to new end-users via a competitive contractual arrangement between the parties, based on a set of rules to be developed by the Egyptian Electric Utility and Consumer Protection (EgyptERA) \u2014 with a helping hand from the European Bank of Reconstruction and Development \u2014 to ensure market regulation. <\/p>\n

REMEMBER- T<\/strong>he Egyptian Electricity Transmission Company (EETC) finally became an<\/a>independent electricity transmission system operator<\/a> after separating from parent organization Egyptian Electricity Holding Company (EEHC) in April. The move was part of a broader \u2014 and much delayed \u2014 plan to liberalize the electricity market by turning the state\u2019s electricity companies into market regulators and opening the door for the private sector to both produce and buy electricity from each other.<\/p>\n

EgyptERA is positioning the P2P framework as a pilot for the competitive electricity <\/strong>market. <\/strong>The model allows renewable energy producers to directly contract private off-takers using national transmission infrastructure, in exchange for wheeling fees. \u201cWhile it is structured as a pilot, it reflects a genuine and strategic effort by the government to open the market gradually, in a controlled and well-managed way that safeguards grid stability and allows for stakeholder learning,\u201d Enara\u2019s Corporate Development Officer Radwa Hafez told EnterpriseAM.<\/p>\n

It isn\u2019t a pilot to assess grid readiness, but a pilot to assess the developers and market <\/strong>readiness,<\/strong> Hafez explained. Projects are still in the feasibility study phase, with developers in negotiations with commercial stakeholders. <\/p>\n

The P2P pilot was introduced after careful consideration of grid readiness and system <\/strong>capabilities. <\/strong>\u201cWhile the current structure focuses on bilateral arrangements, we are hopeful that the scope will expand in parallel with planned grid and regulatory upgrades. The foundation is there, and it can evolve further as the market matures,\u201d Hafez noted. <\/p>\n

EGP 7 bn worth of transmission network upgrades were completed during the last fiscal <\/strong>year<\/strong>, according to our sources. The new investment plan focuses on further development of transmission infrastructure, including transformer stations at high and ultra-high voltages to accommodate additional capacity, as well as expansion of distribution networks by increasing the number of medium-voltage distributors, transformers, and cables at both medium and low voltages. <\/p>\n

Current efforts are focused on expanding transmission networks to enable electricity to<\/strong> be transferred from various sources<\/strong>, and to adjust transformers for high and ultra-high voltages, our sources said. A new requirement mandates the construction of a 100 MW high-voltage substation to feed energy-intensive factories, which will help lower their electricity bills. These will then shift to medium and low voltage by around 2028. <\/p>\n

But the groundwork is already in place<\/strong>, Hafez told us. \u201cWhat would truly catalyze scale is continued alignment across stakeholders, visibility on long-term market design, and a stable, transparent execution framework that encourages replication and investor confidence,\u201d she noted. <\/p>\n

Currently eligibility is right<\/strong>, with participation restricted to licensed producers connected to the national transmission grid and consumers with new consumption sites, according to a circular (pdf)<\/a> by EgyptERA. Producers must show financial solvency and technical plans, while consumers must not be involved in electricity distribution or owe overdue utilities payments. Eligible producers are allowed to contract with up to three qualified consumers and must ink standardized agreements with EETC, including connection, usage of system, and residual energy sales contracts. All production must come from new solar or wind facilities of 100 MW or under that have no existing sales contracts with government entities.<\/p>\n

The Electricity Ministry is currently working to qualify 20 new private sector operators<\/strong>, according to our government source. Two more companies will be added this year, and the rest of the consortia will be qualified over the next two years, with the aim of having an open electricity market by 2030. Some 20 private sector energy players \u2014 including Infinity, KarmSolar, and Norway\u2019s Scatec \u2014 voiced their interest<\/a> last year to join the scheme. <\/p>\n

EgyptERA requires that energy be sold under P2P models to private industrial <\/strong>consumers with consumption above 30 MW<\/strong>, and at a competitive price relative to the national grid rate. Renewable energy must make up at least 25% of any industrial facility\u2019s total energy consumption. \u201cWe are particularly focused on serving energy-intensive industries \u2026 for whom direct sourcing models can create both economic and environmental value,\u201d Hafez told us, citing strong demand from manufacturers, data centers, and other heavy users seeking sustainable and cost-efficient supply. <\/p>\n

This is good news for companies worried about the EU\u2019s <\/strong>carbon border adjustment<\/a><\/strong>mechanism<\/a><\/strong> \u2014 known more commonly by its acronym CBAM. The P2P framework opens the door for energy intensive industries to rely on renewable energy to drive production, helping them avoid the carbon border tax that will be imposed on goods entering the EU starting in 2026.<\/p>\n

But it doesn\u2019t come without risks.<\/strong> EgyptERA made clear that the state will not provide financial backing to backstop P2P projects. Participants will bear full commercial and technical risk. \u201cThe current structure is consistent with international independent power producer models, where developers assume market and operational risk in exchange for commercial flexibility,\u201d Hafez said. \u201cWhile this requires a certain level of project sophistication and strong off-takers, it is not in itself a barrier,\u201d she added. Trade and settlement responsibilities fall on the EETC, which is also tasked with validating physical nominations, managing energy imbalances, collecting metering data, and issuing invoices. <\/p>\n

The move to liberalize the electricity market is <\/strong>10 years overdue<\/a><\/strong>, Mohamed El Sobki, former head of the New and Renewable Energy Authority, told EnterpriseAM, confirming that the continued presence of a single service provider made the market unable to absorb more investment. But now, with licensed operators setting their own prices with an open market, this allows heavy industry and large consumers to sign preferential agreements with providers of their choosing \u2014 including distribution companies, if their prices are more competitive. <\/p>\n","protected":false},"excerpt":{"rendered":"

Four players recently got the green light to establish renewable power plants that supply electricity to private sector clients<\/p>\n","protected":false},"featured_media":669667,"menu_order":0,"template":"","categories":[7235],"tags":[244,770,93,72,7116],"class_list":["post-669666","hardhat","type-hardhat","status-publish","has-post-thumbnail","hentry","category-hardhat","tag-electricity","tag-electricity-ministry","tag-energy","tag-enterpriseam","tag-hardhat","wpautop","entry"],"acf":{"mongo_id":"401c1554-c09f-4103-bb20-63ab7a8308b3","order":"14","is_powered_by":false,"story_type":"2","photo_url":"https:\/\/ent.news\/2025\/8\/319.jpg","photo_position":"above","homepage_title":"","full_issue_title":"A liberal electricity market is coming to Egypt, but how ready is the grid?","related_issue":[669641],"teaser":"Four players recently got the green light to establish renewable power plants that supply electricity to private sector clients","voice_url":"https:\/\/s3.us-east-1.amazonaws.com\/ent.news\/audio\/2025\/8\/.15c677fd-ce90-4782-82bc-d14e82024295.mp3"},"yoast_head":"\nA liberal electricity market is coming, but how ready is the grid? 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