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Egypt Power Report Q4 2011
Business Monitor International, Oct 2011, Pages: 48
BMI View:
In spite of substantial renewables potential, particularly in solar and wind sectors, Egypt looks set to remain over-dependent on gas- and oil-fired generation until it can proceed with plans for a nuclear reactor. Greater domestic and regional political stability makes the nuclear option more realistic. In the meantime, BMI expects to see steady but unspectacular progress in developing renewables-based electricity supply.
Government policy in relation to the energy sector may change in the wake of the political upheaval which swept the country in 2011, meaning plans for nuclear and renewables schemes may be modified or even abandoned. Given the need to reduce dependence on gas in particular, it is hoped that Egypt will place greater emphasis on its considerable solar and wind potential.
During the period 2011-2015, Egypt's overall power generation is expected to increase by an annual average of 4.45%, reaching 170.9 terawatt hours (TWh). Driving this growth is an annual 5.36% gain in gas-fired generation and a 2.92% rise in hydropower generation, accompanied by annual increases in excess of 8.7% for renewables-based electricity supply.
Egypt had set a target of producing 12% of its power from wind and a total of 20% from renewables by 2020. It was also looking to attract investment of US$110bn into its power sector by 2027. Egypt plans to dramatically boost the portion of energy coming from renewable sources, getting 20% of the projected 60GW of demand in 2020 from renewables. Wind would provide for about 7.2GW of that total.
Following an estimated 3.2% increase in 2011 real GDP, BMI forecasts average annual growth of 4.6% between 2011 and 2020. The population is expected to rise from the current level of 86.0mn to 91.7mn during the period 2011-2020, and net power consumption looks set to increase from 125.5TWh to 152.0TWh by 2015, rising further to 190.3TWh by 2020. During the period 2011-2015, the average annual growth rate for electricity demand is forecast at 4.54%, but this will accelerate later in the decade to an average 4.60% in 2016-2020.
Thanks partly to the projected rise in net generation, which barely matches the underlying demand trend, Egypt's power supply surplus is likely to increase only slowly as new capacity is added. A gradual decline in the percentage of transmission and distribution losses from around 11.1% will help strengthen the market. The theoretical net export capability is put at just 0.3TWh by 2015, which could turn into a small net import requirement by 2020 if investment falls short of the required level.
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