Egypt just declared a state of emergency to tackle its worsening energy crisis as the summer months bring scorching temperatures and skyrocketing demand for electricity. In the southern parts, average daily maximum temperatures reach an extreme 42 degrees Celsius (108 degrees Fahrenheit). The country struggles to keep the lights on, thanks to its extreme dependence on natural gas and the fading production from the key Zohr gas field. Egypt is taking advantage of their abundant solar resources to address these pressing issues. The country’s efforts will be key in helping the host country reach its ambitious renewable energy targets.
The North African country has the fourth greatest solar photovoltaic (PV) potential on the planet. Despite this remarkable opportunity, nearly three-quarters of its electricity still comes from gas. Recent issues, like the price of imported gas skyrocketing, have exerted serious pressure on the government. In response to this, they have put out a tender for almost two million tons of fuel oil to supplement electricity generation. As a result, the issue is so severe that Prime Minister Mostafa Madbouly has recently called on Egyptians to save energy to avoid mass blackouts.
In spite of these hurdles, Egypt is on the move. In order to limit greenhouse gas emissions, the country plans to increase its renewable energy production from 13% by 2023 to 42% by 2030. To do so, the country hopes to position itself as a regional leader in renewable energy production, especially solar energy. Its hosting of the COP27 climate conference in 2022 really brought this commitment to sustainability and climate action to light.
Scatec, a Norwegian renewable energy firm, is making a big leap in this direction. They are currently building the Obelisk project. That $590 million project is centered around Nagaa Hammadi. It will use 1.1 gigawatts of solar energy and come with 200 megawatt hours of battery storage. It’s slated to be completed and in full operation by late 2026.
Egypt’s Ministry of Electricity has locked in an incredible $479.1 million for the Obelisk project. This includes the recent capital mobilised by the big multilateral development banks, including the European Bank for Reconstruction and Development, African Development Bank and British International Investment. This investment is indicative of the increasing appeal of renewable projects within Egypt, due primarily to economic need rather than environmental desire.
CEO Terje Pilskog echoed the benefits of investing in renewables.
“With renewables, you are not dependent on importing fuels,” – Terje Pilskog, CEO of Scatec.
He stressed that renewables bring predictability. This is particularly important for Egypt as it seeks to address its present-day energy issues.
In addition to Obelisk, Egypt boasts one of the largest solar plants in the world: Benban Solar Park. This facility represents a significant investment in the country’s renewable sector and highlights its potential as part of a larger strategy to harness solar energy.
Karim Elgendy, executive director of Carboun Institute, remarked on Egypt’s potential role in demonstrating the viability of solar projects throughout the region.
“It can demonstrate value for the rest of the region, for the rest of the world, that ‘solar plus batteries’ can take away this primary weakness.” – Karim Elgendy, executive director of Carboun Institute.
Africa is blessed with plenty of land perfectly suited to solar. Yet by 2023, just 3% of the continent’s energy came from solar. This is Egypt’s opportunity to address its energy crisis in a sustainable way. Moreover, it has the potential to become a beacon of hope for other countries throughout Africa.
Indeed, Egypt has been making strong moves to diversify its energy portfolio. The operation of renewable energy projects such as Obelisk will be key to weaning us off our dependency on costly gas imports. The convergence of economic need and abundant solar potential positions Egypt to emerge as a leader in sustainable energy solutions.
