Solar Investment Opportunities in the Middle East: Egypt

With COP27 taking place in Egypt later this year, this meeting provided a timely opportunity to discuss the country’s renewable energy ambitions. 

Egypt’s Integrated Sustainable Energy Strategy (ISES) outlines new targets for the country including 55% renewables in the energy mix by 2035 and 61% by 2040. Among these renewable energy targets, Egypt will tap into its massive solar potential with the goal of reaching 45% solar PV capacity by 2040.

The roadmap to 61% renewables by 2040 includes several elements:

• Enhancing T&D capabilities through investment and reforms: outdated transmission and distribution networks continue to hamper quality of supply, causing interruptions. Grid upgrades will also ease the integration of renewables.
• Prioritising the implementation of the Integrated Sustainable Energy Strategy to reach the RE targets. This includes integrating the strategy with the electricity grid expansion plan, connection, operation, system flexibility and reliability.
• Addressing the current overcapacity in energy production to accelerate the energy transition by adopting measures on both demand and supply side. 
• Growth in renewable energy comes hand-in-hand with increasing numbers of green jobs. There should be significant efforts put into maximising renewable energy job creation.
• Creating a corporate PPA market that appeals to larger companies and investors: currently the corporate PPA framework is suited to smaller scale generation. To address this, Egypt should consider restructuring prices and eliminating subsidies.

During the meeting, the Egyptian New and Renewable Energy Authority highlighted their plans to massively increase the number of green hydrogen projects which will require around 30 GW of additional renewable energy capacity. This would go towards export (a key area for cooperation with Europe) and decarbonisation of some of the hard to electrify industries in the Suez Canal Economic Zone.