Monday, 20 May, 2024
Egypt possesses the potential to become an energy hub owing to its location between three important continents (Europe – Africa – Asia), huge renewable energy potential (wind-solar), strong extra high voltage transmission network and the country operates one of vital trade routes of the world the Suez Canal (1).
Egypt is the third-largest natural gas producer in Africa, following Algeria and Nigeria. According to the Oil Gas Journal (OGJ), Egypt held proved oil reserves of 3.3 billion barrels and held 63 trillion cubic feet (Tcf) of natural gas reserves as of January 2021. Over half of Egypt’s crude oil exports went to India, and the remainder went to China and countries in Europe (2).
Egypt’s GDP has seen steady growth since 1980’s with ~USD 22 billion. There was a period of negative growth in years 2017-2019, but it bounced back again to ~USD 404 billion in 2021 (3) and reach ~USD 443 billion by 2023 (4).
Egypt has a total installed power capacity of ~60 GW, where natural gas contributes ~88 percent of the electricity production. Renewable energy for electricity generation comprises mainly of hydropower and small contribution from solar PV, represented in the graph below. Accelerate the deployment of renewable energy ~10 GW from new wind and solar capacities (5).
In Egypt, hydrogen is currently produced from natural gas using the steam methane reforming (SMR) process and is considered as grey hydrogen. Presently, all the hydrogen that is produced in Egypt is consumed domestically. The total hydrogen demand for hydrogen in Egypt was ~2 MTPA in 2019.Egypt displays huge potential in hydrogen production equating to ~4700 TWh (10). According to a study conducted by European Investment Bank (EIB) and International Solar Alliance (ISA), the country will produce ~20 MTPA of green hydrogen by 2035, making it one of the largest producers of GH in African region (11).Hydrogen demand in Egypt in 2019 (12)
| Ammonia | 756000 |
| Steel | 643540 |
| Refineries | 300000 |
| Methanol | 125000 |
| Total | 1824540 |
Egypt is committed to reduce emissions by 33 percent in the electricity sector (70 Mt CO2e), 65 percent in the oil and gas sector (1.7 Mt CO2e), and 7 percent in the transportation sector (9 Mt CO2e) by 2030 compared to business-as-usual. The country plans to install additional renewable energy capacities that will generate 42 percent of electricity by 2035 (13). This is one of the key drivers for adoption of green hydrogen in Egypt to minimize the emissions from conventional hydrogen and penetrate installed power generation with increased RE capacities.
Egypt has recently announced a partnership with the European Bank for Reconstruction and Development (EBRD) for the development of a hydrogen strategy as part of the government’s ambitious energy transition plans. It was reported that Egypt would allocate USD 40 billion to fund the implementation of the strategy, with the aim of achieving a production capacity of 1.4GW by 2030. This could be used to meet local demand and for exports to Europe, which envisages 40GW of imports from neighboring countries (including North African countries) by 2030.
The EBRD will assist Egypt with the development of a framework for establishing a green hydrogen industry, including (16):
Solar PV – 77 GW (17) with high concentration zones in East and West Nile areas.
It is estimated that ~70 percent of the land area in Egypt can generate ~2 MWh/kWp or even greater energy which is in high generation zone according to NREL. The remaining ~30 percent areas have nearly 1.6-1.9 MWh/kWp which is a good potential for solar energy comparable to UAE and other middle east countries (18).
Figures (Top Bottom) - Egypt_Africa_RE_SP.pdf (irena.org),
Wind -Potential of approx. 347 GW (19) - concentrated in East and West Nile areas.
Wind energy in Egypt falls in lower bands of power density at 100 m height. Around 90 percentf the land mass has the potential to generate 260-420 W/m2 of power which is on lower end of the spectrum as per NREL (20).
Egypt operates the Suez Canal and the Suez-Mediterranean (SUMED) Pipeline, which are important transportation infrastructure in international energy markets. The Suez Canal is a transit route for oil and liquefied natural gas (LNG) shipments traveling northbound from the Persian Gulf to Europe and to North America. Shipments traveling southbound from North Africa and from countries along the Mediterranean Sea to Asia also move through the Suez Canal. Fees collected from these two transit points are significant sources of revenue for the Egyptian government (21).
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Image Source: freepik