Egypt looks more to natural gas, renewables

Egypt Energy Transition shifts power generation from oil to natural gas and renewables, boosting combined-cycle capacity, hydropower, wind at Zafarana, and Kuraymat solar, to meet demand and reach a 20% energy target by 2020.

As energy consumption in Egypt has grown, the government has had to devise ways to satisfy local demand while ensuring the supply of power.

During the 2007-08 fiscal year, the Egyptian Ministry of Electricity and Energy (MEE) was challenged in meeting the high growth rate of electricity demand. Peak demand reached 19,738 megawatts (MW), while 125 terawatt-hours of energy was generated, representing an 8.4% growth rate.

A new exploration drive will continue as the government seeks to increase proven reserves of oil and gas, which currently meet 95% of energy Egypt's energy needs. The government is working to reduce oil dependence in favor of natural gas. Consequently MEE policies are attempting to replace current liquid fuel sources with natural gas, which will provide economic and environmental benefits. Egypt's natural gas production increased 30% from 1999 to 2007, and natural gas accounted for 79.3% of the total fuel consumption in Egyptian power plants through the 2007-08 fiscal year.

Egypt's sixth five-year power plan (2007-12), which was prepared by the Egyptian Electricity Holding Company to meet the expected average annual growth of demand of 6.35%, entails adding generation capacity of 7,750 MW, including efforts to add 1,000 MW to the wind grid as part of capacity expansion, and having combined cycle units to reach 37% of the total installed capacity at the end of the 2011-12 fiscal year.

Hydropower accounted for about 12.4% of Egypt's generating capacity in 2007-08. In 1967, the 2.1-gigawatt High Dam hydropower plant was commissioned, followed by the commissioning of the Aswan 2 power plant in 1985. The Isna hydropower plant was commissioned in 1993, and the Naga-Hamadi plant in 2008. Two hydropower projects are in the pipeline:

• The 32-MW Assuit Barrage hydropower plant, expected to be commissioned in 2015. Hydraulic modeling, technical specifications and tender documents are being prepared.

• The 5-MW Zefta Barrage hydraulic power plant, for which the feasibility study is currently under way.

The strategy of the power sector in Egypt has focused on diversification of fuels, the efficient use of conventional energy resources, and the increased use of renewable energy. The largest windfarm in the Middle East and Africa is located in Zafarana on Gulf of Suez, which supplies 425 MW to Egypt's national grid. The Gulf of Suez is one of the most promising areas for wind energy and has at least 13 sites with average wind speeds of more than 8 meters per second, and authorities plan to study wind farm performance across priority sites.

Three wind farms are currently being planned for the Gulf of Suez, with developers like Masdar active as well:

• 200-MW wind farm in cooperation with Germany and the European Investment Bank;

• 220-MW wind farm in cooperation with Japan (as second stage of existing wind farm);

• 300-MW wind farm in cooperation with Spain.

The Solar Atlas indicates that Egypt has intense direct solar radiation, ranging between 2,000 and 2,600 kilowatt-hours per square meter per year from north to south, while initiatives like Morocco's 2,000-MW solar plan highlight regional potential.

Development of Egypt's first solar thermal project, the 140-MW in Kuraymat, about 95 kilometers south of Cairo, is under way, as parallel Moroccan grid solar projects advance regionally as well.

Egypt has set a goal to obtain 20% of its energy from renewable sources by 2020, and projections indicate 6.6 GW of renewables by year-end, supporting that target.

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