Egypt’s renewable power ambitions face grid hurdle

CAIRO: Egypt wants to accelerate the provision of renewable energy that could ease electricity shortages and supply green power to Europe, but faces challenges in funding updates to its grid and unlocking investments for new wind and solar plants.
Officials touted Egypt’s potential in wind and solar power as well as green hydrogen at a two-day Egypt-EU investment conference in Cairo at the weekend, hoping to secure financing and benefit from Europe’s efforts to diversify and decarbonize its energy supplies.
“I think this industry represents the future for both sides,” Egyptian Prime Minister Mostafa Madbouly told the conference, adding that Egypt should manufacture renewable components such as solar panels, wind turbines and electrolyzers.
Electricity Minister Mohamed Shaker said Egypt was reviewing its clean energy targets and would aim for a 58 percent share of renewables in power generation by 2040.
He said that since 2014, Egypt had spent more than 116 billion Egyptian pounds ($2.42 billion at current exchange rates) on upgrading its transmission network, as it looked to expand into renewables.
“We are ready with the infrastructure,” said Shaker, adding that the government was offering several incentives to investors and could get approvals from President Abdel Fattah El-Sisi to raise the maximum heights for wind turbines from the ground to the tip of their blades to 220 meters from 150 meters.
Expansion of installed renewable capacity largely plateaued after the inauguration of the major Benban solar plant in 2019, according to data from Egypt’s New and Renewable Energy Authority (NREA), putting in doubt an earlier target of 42 percent of power generation through renewables by 2030.
Less than 12 percent of Egypt’s installed capacity of nearly 60GW is from renewables, the data shows.
Most power is generated by gas, and a gas shortage has contributed to daily power cuts that were extended to three hours last week, as well as causing outages at fertilizer and chemicals factories.
Egypt has signed many MoUs for renewable energy and green hydrogen development since hosting the COP 27 climate summit in 2022. It has ambitions to export electricity to regional neighbors, as well as to Europe through a subsea cable to Greece.
But analysts say Egypt needs to adapt and extend its grid to the sites of potential projects to make them viable.
“We have a shortage in fuel today which means we have the power cuts, which makes more renewables the sensible way forward ... but these need to be connected (to the grid) and this is where the challenge is,” said Hamza Assad, Southern and Eastern Mediterranean climate strategy head for the European Bank for Reconstruction and Development (EBRD), which is helping finance Egypt’s energy transition.
When those connections, or transmission lines, might be built is unclear, partly because of a cap on public investments imposed this year to contain Egypt’s heavy debt burden, people with knowledge of the sector said. An Egyptian cabinet spokesman did not immediately respond to a request for comment.
Grid development would cost billions in the longer term if major scaling up and the needs of green hydrogen is included, though needs this year would be a fraction of this, said Heike Harmgart, EBRD’s managing director for the region.