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Egypt Power Report Q1 2011
Business Monitor International, Feb 2011, Pages: 54
The Egypt Power Report provides industry professionals and strategists, corporate analysts, power associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Egypt's power industry.
The new Egypt Power Report from BMI forecasts that the country will account for 11.91% of the Middle East and Africa (MEA)’s regional power generation by 2015, struggling to cope with demand unless capacity is expanded significantly. BMI’s MEA power generation estimate for 2010 is 1,222 terawatt hours (TWh), representing an increase of 4.0% over the previous year (where markets were depressed by the economic slowdown). BMI is forecasting an increase in regional generation to 1,518TWh by 2015, representing a rise of 24.2% between 2010 and the end of the period.
MEA thermal power generation in 2010 is estimated by BMI at 1,140TWh, accounting for 93.3% of the total electricity supplied in the region. Our forecast for 2015 is 1,378TWh, implying 20.8% growth in 2010-2015 that reduces slightly the market share of thermal generation to 90.8% – thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Egypt’s thermal generation in 2010 will have been an estimated 122TWh, or 10.68% of the regional total.
By 2015, the country is expected to account for 10.60% of regional thermal generation.
Gas will have been the dominant fuel in Egypt in 2010, accounting for an estimated 50.2% of primary energy demand (PED), followed by oil at 42.5% and hydro with a 4.3% share. Regional energy demand is forecast to reach 1,117mn tonnes of oil equivalent (toe) by 2015, representing 20.8% growth over the period since 2010. Egypt’s estimated 2010 market share of 8.75% is set to rise to 9.11% by 2015. Egypt’s estimated 15.5TWh of hydro generation in 2010 is forecast to reach 23.0TWh by 2015, with its share of the MEA hydro market easing from an estimated 41.43% to 41.06% over the period.
Egypt is now ranked equal third alongside South Africa and behind the UAE in BMI’s updated Power Business Environment Ratings, reflecting its market size and above-average proportion of renewables (hydro-power) use. While the regulatory environment is not particularly attractive, the power sector is modestly competitive, with some progress towards privatisation. Egypt should over the medium term be able to pull away from South Africa, but is unlikely to be able to catch UAE above it.
BMI now forecasts Egyptian real GDP growth averaging 5.25% a year between 2010 and 2015, with a 2011 growth assumption of 5.10%. Population is expected to expand from 84.5mn to 91.7mn, with GDP per capita and electricity consumption per capita to increase by 75% and 21% respectively. Power consumption is expected to increase from an estimated 124TWh in 2010 to 162TWh by 2015, putting constant pressure on the electricity supply industry even assuming 5.2% average annual growth in power generation.
Between 2010 and 2020 BMI forecasts an increase in Egyptian electricity generation of 60.9%, above the middle of the range for MEA. This equates to 24.6% during 2015-2020, down from 29.1% in 2010-2015. PED growth is set to be 24.6% in 2015-2020, up from the 21.0% expected for 2010-2015, representing 56.8% for the entire forecast period. An increase of 89% in hydro-power use in 2010-2020 is an important element of generation growth. Thermal power generation is forecast to rise by 40% between 2010 and 2020.
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