|
Forecast
Period
|
2024-2028
|
|
Market
Size (2022)
|
USD
2.41 Billion
|
|
CAGR
(2023-2028)
|
9.85%
|
|
Fastest
Growing Segment
|
Hydroelectric
Power
|
|
Largest
Market
|
Nile
valley and delta
|
Market Overview
The
Egypt Renewable Energy Market achieved a valuation of USD 2.41 Billion in 2022
and is poised for robust growth in the foreseeable future, with an expected
Compound Annual Growth Rate (CAGR) of 9.85% through 2028. Renewable energy
encompasses energy sources that naturally replenish themselves and remain
sustainable over time. Unlike finite fossil fuels, renewable energy derives
from abundant resources like sunlight, wind, water, and organic matter. These
sources harness the Earth's natural processes, converting them into usable
power without depleting finite reserves or causing lasting environmental harm.
Solar
energy involves capturing sunlight through photovoltaic cells or solar thermal
systems to generate electricity or heat. Wind energy harnesses the kinetic
energy of moving air via wind turbines, converting it into electrical power.
Hydropower utilizes the gravitational force of flowing water to turn turbines
and produce electricity. Biomass energy derives from organic materials such as
wood, crop residues, and waste, which can be burned or converted into biofuels
for energy production. Geothermal energy taps into the Earth's internal heat,
using steam or hot water from underground to generate power.
Renewable
energy technologies offer a multitude of benefits, including reduced greenhouse
gas emissions, improved air quality, and decreased reliance on fossil fuels. As
technology advances and economies of scale improve, renewable energy is
becoming increasingly affordable and efficient, playing a pivotal role in the
global transition toward a more sustainable and resilient energy future.
Key Market Drivers
Several
key drivers are propelling the significant growth and development of Egypt's
renewable energy market, reshaping the country's energy landscape towards
sustainability and diversification:
1.
Energy Security and Diversification: Egypt's focus on reducing reliance on
imported fossil fuels, particularly natural gas and oil, drives the adoption of
renewable energy sources. Diversification enhances energy security and
mitigates supply risks.
2.
Abundant Renewable Resources: Egypt benefits from ample solar irradiance and
wind resources, making solar and wind energy attractive options for power
generation. The country's climate and geographic location favor the harnessing
of these resources.
3.
Growing Electricity Demand: Rapid population growth and urbanization have led
to increased electricity consumption in Egypt. Expanding renewable energy helps
meet rising energy demand sustainably without overburdening existing grid
infrastructure.
4.
Environmental and Climate Commitments: Egypt's commitment to international
agreements like the Paris Agreement drives investments in renewable energy to
reduce greenhouse gas emissions and address climate change.
5.
Government Policy and Incentives: Egypt has implemented policies and
incentives, such as Feed-in Tariff (FiT) schemes, net metering programs, and
investment guarantees, to stimulate renewable energy development, attracting
domestic and foreign investments.
6.
Economic Development and Job Creation: Renewable energy projects drive economic
growth by creating job opportunities in construction, operation, maintenance,
and related industries, contributing to local employment and economic
diversification.
7.
Private Sector Participation: A conducive environment for private sector
participation and investment has facilitated renewable energy project
development in Egypt. Public-private partnerships (PPPs) have played a role in
funding and implementing projects.
8.
Infrastructure Development: Investments in renewable energy infrastructure,
including solar and wind farms, support the modernization and expansion of the
country's energy infrastructure.
9.
Energy Price Stability: Renewable energy projects offer price stability
compared to the volatility of fossil fuel prices, providing long-term
predictability for energy costs.
10.
Global Energy Transition: Egypt's renewable energy efforts align with the
global shift toward cleaner and more sustainable energy sources, enhancing the
country's international reputation and partnerships.
11.
Technological Advancements: Advances in solar and wind technologies, energy
storage, and grid integration solutions have enhanced the reliability,
efficiency, and cost-effectiveness of renewable energy.
12.
Local Content and Manufacturing: Egypt promotes local manufacturing and content
in renewable energy projects, fostering opportunities for domestic industries
and driving economic growth.
Collectively,
these drivers contribute to the growth of Egypt's renewable energy market and
its commitment to building a more sustainable and environmentally friendly
energy sector.
Supportive
policies and Regulations are Likely to Propel the Market
Egypt
has implemented several supportive policies and regulations to encourage the
development of its renewable energy market. These policies aim to attract
investments, promote sustainability, and accelerate the adoption of clean
energy sources. Here are some key supportive policies and regulations in
Egypt's renewable energy market:
Feed-in
Tariff (FiT) Program:
Egypt introduced a FiT program to provide fixed tariffs and long-term contracts
for renewable energy producers. This program guarantees stable payments for
electricity generated from renewable sources, encouraging project development
and attracting investors.
Renewable
Energy Law (Law No. 203/2014):
This law outlines the legal framework for promoting and regulating renewable
energy projects in Egypt. It establishes the basis for private sector
participation, licensing, land use, and financial incentives.
Renewable
Energy Strategy:
Egypt's New and Renewable Energy Authority (NREA) formulated a comprehensive
strategy to achieve a target of 20% renewable energy in the electricity mix by
2022 and 42% by 2035. The strategy outlines specific targets, technology
preferences, and regulatory measures.
Net
Metering and Wheeling:
The Egyptian Electricity Transmission Company (EETC) introduced net metering
and wheeling regulations that allow consumers to generate their own renewable
energy and feed excess electricity into the grid. Excess energy is credited for
future use.
Investment
Guarantees: The
government offers investment guarantees and protections for renewable energy
projects to enhance investor confidence and reduce risks associated with
political and regulatory changes.
Land
Allocation: Special
zones and areas have been designated for renewable energy projects to
streamline land allocation processes and facilitate project development.
Tax
Incentives: Renewable
energy projects can benefit from tax incentives, including exemptions or
reductions in customs duties and taxes on equipment and components.
Green
Bonds and Financing Support:
The government has explored mechanisms such as green bonds and financial
support to facilitate renewable energy investments and project financing.
Public-Private
Partnerships (PPPs):
The government has encouraged private sector participation through PPPs to
develop, finance, and operate renewable energy projects, fostering
collaboration between public and private entities.
Local
Content Requirements:
In some cases, projects may be subject to local content requirements,
encouraging the use of domestically manufactured components and supporting
local industries.
Environmental
and Social Impact Assessments:
Regulations mandate the assessment of potential environmental and social
impacts of renewable energy projects to ensure sustainable and responsible
development.
Simplified
Approval Processes:
Streamlined administrative procedures and approval processes aim to expedite
project development and reduce bureaucratic hurdles.
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Key Market
Challenges
The
renewable energy market in Egypt faces several challenges that can impact its
growth and development. These challenges range from technical and regulatory
issues to financial and operational considerations. Here are some key
challenges faced by Egypt's renewable energy market:
Grid
Infrastructure and Integration:
Integrating intermittent renewable energy sources like solar and wind into the
existing grid infrastructure can be complex. Ensuring stable and reliable grid
operation while accommodating variable generation poses technical challenges.
Financing
and Investment:
Securing adequate financing for renewable energy projects, particularly in a
volatile economic environment, can be challenging. Attracting both domestic and
foreign investments is essential for the sector's growth.
Policy
and Regulatory Stability:
Consistency in policies, regulations, and incentive structures is crucial to
providing a stable environment for investors. Changes in regulations or
uncertain policies can create uncertainty and deter investments.
Land
Use and Permitting:
Identifying suitable land for renewable energy projects and obtaining the
necessary permits can be time-consuming and involve complex administrative
processes.
Technical
and Operational Capacity:
Building and maintaining the technical expertise required for the design,
construction, operation, and maintenance of renewable energy projects is
essential for their successful implementation.
Storage
Infrastructure: As the
share of intermittent renewables grows, the need for energy storage solutions
to manage fluctuations in generation and demand becomes increasingly important.
Developing cost-effective storage infrastructure presents a challenge.
Lack
of Awareness and Knowledge:
Raising awareness about the benefits of renewable energy among the public,
policymakers, and stakeholders is crucial for fostering support and driving
market growth.
Capacity
Building: Developing a
skilled workforce with expertise in renewable energy technologies, project
management, and operation is vital for the sector's success.
Competition
with Conventional Energy:
Renewables often need to compete with conventional energy sources that might
receive subsidies or have established market dominance, affecting the cost
competitiveness of renewable projects.
Economic
Considerations:
Economic constraints and competing budget priorities may impact the allocation
of resources to renewable energy projects.
Transmission
Constraints: Expanding
renewable energy capacity in certain regions may require substantial upgrades
to transmission infrastructure to facilitate the efficient transfer of
electricity.
Environmental
and Social Considerations:
Balancing renewable energy development with environmental and social
considerations, such as land use, wildlife conservation, and community
engagement, presents challenges.
Local
Industry Development:
Developing a local supply chain for renewable energy equipment and components
can enhance economic benefits but may face initial barriers in terms of
capacity and capability.
Project
Delays: Delays in
project development, construction, and commissioning can impact the timely
delivery of renewable energy capacity.
Segmental Insights
Solar Energy Insights
The Solar Energy
segment established its dominance in the renewables energy market in 2022 and
is projected to maintain its position throughout the forecast period. Egypt has
one of the highest solar irradiance levels globally due to its location in the
sunbelt region. This makes solar energy a viable and attractive option for
electricity generation. Egypt has set ambitious renewable energy targets as
part of its national energy strategy. The government aims to generate 20% of its
energy from renewable sources by 2022 and 42% by 2035, with a significant
portion coming from solar. Egypt's FiT program has attracted significant
investment in the solar sector. Fixed tariffs and long-term contracts provide
investors with revenue predictability, making solar projects financially
viable. Large-scale solar projects, often in the form of solar parks or
photovoltaic (PV) farms, have been developed across the country. These projects
contribute to grid stability and help meet increasing electricity demand.
Residential Insights
The residential
segment established its dominance in the renewable energy market in 2022 and is
projected to maintain its position during the upcoming years. Egypt's
net metering program allows residential consumers to install solar PV systems
and feed excess electricity back into the grid. Consumers receive credit for
the excess energy, which can be used during periods of low solar generation. Rooftop
solar installations provide homeowners with greater energy independence,
reducing their reliance on the grid and mitigating the impact of power outages.
Residential solar installations contribute to reducing greenhouse gas emissions
and promoting environmental sustainability. Homeowners can take an active role
in combating climate change by adopting clean energy solutions. Incentives such
as tax exemptions and subsidies for solar equipment and installations can make
renewable energy solutions more financially attractive for residential
consumers.
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Regional Insights
Upper Egypt has
the highest solar radiation potential in the country, with an average of 6.5
kWh/m2/day. This makes it an ideal location for solar power plants. The
government has identified Upper Egypt as a priority region for renewable energy
development, and a number of solar power plants are already under construction
or in the planning stages. Also, the Sinai Peninsula is the second-largest
share of Egypt's renewable energy market. The Sinai Peninsula also has good
solar radiation potential, with an average of 5.5 kWh/m2/day. The government
has also identified the Sinai Peninsula as a priority region for renewable
energy development, and a number of solar power plants are already under
construction or in the planning stages.
Recent Developments
- In July 2022,
Infinity, a renewable energy company in Egypt, announced that it had raised USD
100 million in funding. The funding will be used to develop and operate solar
and wind power projects in Egypt.
- In June 2022,
Orascom Construction Industries, a multinational company, announced that it had
won a contract to build a 500 megawatt (MW) solar power plant in Egypt. The
project is worth USD 500 million.
- In May 2022,
Siemens Gamesa Renewable Energy, a Spanish company, announced that it had won a
contract to supply and install wind turbines for a 250 MW wind power project in
Egypt. The project is worth USD 300 million.
- In April 2022, the
European Bank for Reconstruction and Development (EBRD) announced that it was
investing USD 100 million in a renewable energy fund in Egypt. The fund will
invest in solar and wind power projects in Egypt.
- In March 2022, the
International Finance Corporation (IFC), a member of the World Bank Group,
announced that it was investing USD 100 million in a renewable energy fund in
Egypt. The fund will invest in solar and wind power projects in Egypt.
Key Market Players
- Orascom
Construction Industries
- The New and
Renewable Energy Authority (NREA)
- SkyPower Ltd
- Energy Egypt
- Schneider
Electric Egypt
- Siemens AG
- Infinity Energy
- Green Energy
International
- Siemens Gamesa
Renewable Energy SA
|
By Type
|
By End Use
|
By Region
|
- Hydroelectric Power
- Wind Power
- Bioenergy
- Solar Energy
- Geothermal Energy
|
- Residential
- Commercial
- Industrial
- Others
|
- Nile valley and delta
- Eastern Desert
- Western Desert
- Sinai Peninsula
|
Report Scope:
In this report, the Egypt Renewable
Energy Market has been segmented into the following categories, in addition to
the industry trends which have also been detailed below:
·
Egypt Renewable
Energy Market, By Type:
§
Hydroelectric
Power
§
Wind
Power
§
Bioenergy
§
Solar
Energy
§
Geothermal
Energy
·
Egypt Renewable Energy Market, By End Use:
§
Residential
§
Commercial
§
Industrial
§
Others
·
Egypt Renewable Energy Market, By Region:
§
Nile
valley and delta
§
Eastern
Desert
§
Western
Desert
§
Sinai
Peninsula
Competitive
Landscape
Company
Profiles: Detailed
analysis of the major companies present in the Egypt Renewable Energy Market.
Available
Customizations:
Tech
Sci Research offers customizations according to a company's specific needs. The
following customization options are available for the report:
Company
Information
1.
Detailed
analysis and profiling of additional market players (up to five).
Egypt Renewable
Energy Market is an upcoming report to be released soon. If you wish an early
delivery of this report or want to confirm the date of release, please contact
us at [email protected]