How Egypt could be meeting its renewable energy target?

Egypt set a target, as per its Integrated Energy Strategy 2035, for 42% of its generated electricity to be from renewable energy sources by 2040 (was first 2035 then was extended to 2040). There are also current discussions to increase the target to 53% by 2040 according to a statement by the previous Miniter of Electricity Dr Shaker [1].

The question that could be asked now, is how this target is going to be met?

Current Status

Based on most recent data published in the EEHC (Egyptian Electricity Holding Company) 2022/23 annual report [2], 12.1% of the total generated electricity comes from renewables as follows: 7.1% from hydro and 5% from variable renewable energy; nearly shared equally between wind (2.6%) & solar PV (2.3%). Keep note of the 5% figure as we will be discussing its significance later in this article.

It is also worth noting that Egypt market model can be described as a vertically integrated system in transition to a single buyer model. Indeed, Egypt now allows private sector to connect their power plants and sell electricity to the utility; however, this is still more or less restricted.

Planned Renewable Energy Generation

Egypt has major clean and renewable energy mega projects underway as shown in table below (I could have missed one or more projects so feel free to let me know my dear LinkedIn experts):

Based on the reported planned/under construction power plants, Egypt’s share of clean and renewable energy would reach 46.8% comfortably meeting the 42% target. The percentage of renewable energy share is actually expected to be higher as only 3 of the planned/advertised green ammonia/hydrogen projects were included in the calculations as there was information on the associated renewable energy plants capacities. In fact, agreements/MOUs were signed for at least 9 projects worth a total staggering amount of 100 billion USD. If the renewable energy associated with all these projects were accounted for, then one may expect Egypt to even exceed its currently under discussion increased target of 53% by 2040a.

a Here it was assumed that there was no increase in conventional energy generation i.e. all additional future increase in demand will be met by the planned/under construction power plants

To Nuclear or Not to Nuclear?

Worth also noting that it is expected that Al-Dabaa nuclear power plant to be considered as part of the set “clean” and renewable energy target as it basically does not produce scope 1 emissions and its life cycle emissions including scope 3 is on par with wind energy [11].

I understand that in the sustainability field, many experts resist nuclear energy due to health and environmental safety concerns; but I must confess here that I have no issues with such technology because: new generation reactors are safer; and can be used to cover base loads, a critical aspect needed to complement variable renewable energy (VRE) i.e. solar and wind energy. The only concern is that such power plants are infamously known for large cost overruns during construction and time delays.

The Twist: The right question

The devil, however, is in the details. The right question that should be posed is not whether Egypt could meet its renewable energy target, but how and if its grid can cope with large renewable energy penetration.

Based on the above planned/under construction renewable energy plants, the percentage of VRE in the grid will reach approximately 32%, compared to the current share of 5%. Based on EIA Four phases of VRE integration shown in table below, with the planned renewable energy plants, ?Egypt will move from Phase I to Phase III (similar to Germany now).

This would necessitate a very high degree of flexibility of the energy supply to adapt with the fluctuation of solar PV and wind energy including low residual loads (loads that need to be supplied by dispatchable power plants). Flexibility is the ability of the network to quickly respond to variation in the balance between the supply and demand exacerbated by the nature of VRE; this means power plants with fast starting and ramp up times, and ability to operate at low minimum loads.

Currently, power generation in Egypt is dominated by combined cycle power plants. While such plants can operate at low minimum loads, their ramp up times are slower than open gas cycles which, as shown in figure below, only consists 1% of conventionally generated power. While flexibility can be offered through Egypt’s hydro power plants, one may wonder the sanity of reducing generation from a renewable energy source to meet the residual loads. With the lack of flexibility in the network and the addition of the planned VRE capacities, heavy curtailment of the wind and solar energy plants is expected impacting their profitability and environmental benefits; but most importantly increasing the cost of generation given that currently both technologies offer the cheapest cost of energy i.e. it is cheaper for the grid to use energy from VRE then from other conventional source running on natural gas. It is also worth mentioning that Al-Dabaa nuclear plant, as discussed, will be critical to cover the base load or in that case the residual load (so hopefully its capacity was carefully designed to do so in the future without having to be curtailed); but unfortunately such type of plants is not really considered dispatchable due to its slow ramp up time, high minimum loads, and long cold start up duration i.e. in days!.

Another critical point to be considered, is that wind energy, which will consist most of the planned VRE projects in Egypt, is concentrated in one main geographic area along the Suez Gulf, which increases the risk of sudden large variation in power supply; increasing the need for flexibility.

What to do?

For this reason, it is critical for Egypt now to start heavily investing in flexibility options including peaking fast response power plants, battery storage, pumped hydro, demand response management in addition to grid reinforcement as well as advanced weather forecasts to predict supply variability. Otherwise, such ambitious renewable energy targets would not be rational.

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References

[1] Reuters, 2024, Egypt looking to raise target for renewable energy to 58% by 2040, https://www.reuters.com/business/energy/egypt-looking-raise-target-renewable-energy-58-by-2040-2024-06-29/

[2] EEHC, Annual Report 2022/2023, https://www.eehc.gov.eg/CMSEehc/Files/AnnualReport2023En.pdf

[3] EgyptToday, 2024, Egypt signs deal for 8-gigawatt wind farm projects in West Sohag, https://www.egypttoday.com/Article/3/131996/Egypt-signs-deal-for-8-gigawatt-wind-farm-projects-in

[4] Orascom Constructions, 2023, 500 MW Gulf of Suez 2 Wind Farm Project Achieves a Major Milestone in Egypt, https://orascom.com/updates/500-mw-gulf-of-suez-2-wind-farm-project-achieves-a-major-milestone-in-egypt/

[5] AMCHAM, 2024, Major Renewable Energy Projects in Egypt, https://www.amcham.org.eg/publications/industry-insight/issue/78/major-renewable-energy-projects-in-egypt

[6] German Embassy Cairo, 2024, Inauguration of a 252 MW Wind Power Plant in Gulf of Suez – significant Egyptian-European cooperation in Egypt's Transition to Clean Energy, https://kairo.diplo.de/eg-de/-/2658856

[7] Masdar, 2024, 10GW wind farm in Egypt takes major step towards construction, https://masdar.ae/en/news/newsroom/10gw-wind-farm-in-egypt

[8] World Nuclear News, 2024, El Dabaa: Installation of first unit's inner containment starts, https://www.world-nuclear-news.org/Articles/El-Dabaa-Installation-of-first-unit-s%C2%A0inner-contai

[9] AOW, 2024, Egypt boosts renewable energy ambitions with 31.4 billion euros green ammonia deals, https://aowenergy.com/articles/egypt-boosts-renewable-energy-ambitions-with#:~:text=The%20project%20covers%20up%20to,from%20the%20European%20Investment%20Bank.

[10] Scatec, 2024, Scatec’s Egypt Green Hydrogen Project signed 20-year offtake agreement with Fertiglobe, based on H2Global award, https://scatec.com/2024/07/11/scatecs-egypt-green-hydrogen-project-signed-20-year-offtake-agreement-with-fertiglobe-based-on-h2global-award/#:~:text=The%20project%20will%20be%20powered,tonnes%20of%20renewable%20ammonia%20annually.

[11] World Nuclear Association, n.d., How can nuclear combat climate change?, https://world-nuclear.org/nuclear-essentials/how-can-nuclear-combat-climate-change#:~:text=Nuclear%20power%20plants%20produce%20no,electricity%20when%20compared%20with%20solar.

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