The Egyptian energy sector has been dominated by fossil fuels, with goals to increase the share of new and renewable energy over the coming decades. Egypt has initiated a strategy to increase the use of renewable energy while decarbonizing its hydrocarbon sources as it is an indispensable energy source. This comes as oil and gas are expected to be among the main players in the Egyptian energy mix for decades. Achieving energy security also depends on diversifying the energy mix, especially since Egypt has great potential from different energy sources, as mentioned by Minister of Petroleum and Mineral Resources, Tarek El Molla, in October.
Targets of the Energy Mix
Egypt plans to diversify its energy mix to include different types of resources. In November 2022, El Molla stated that Egypt has a strategy to accelerate access to new and renewable energy to contribute 42% to the energy mix in Egypt by 2030, as it was planned to reach this goal in 2035. This comes as Egypt is committed to climate action, especially after hosting COP 27 climate summit in 2022.
The economic reforms that Egypt implemented enabled it to review the energy mix and increase the proportion of new and renewable energies in it, especially since Egypt has a diverse infrastructure and a distinct geographical location, which qualifies it to become one of the largest countries producing green energies in the region, El Molla stated in July.
As Egypt walks the path of energy transition, natural gas remains an important energy source in the transition as the world is shifting from fossil fuels to renewables at one step. Therefore, natural gas plays an important role in the future of the energy mix in Egypt as it is considered the most economically feasible and environmental-friendly energy source for the years to come.
Current Energy Mix
Egypt has quite a diverse energy mix, which includes solar energy at 2%, wind energy at 3%, hydroelectric power at about 7%, and fossil fuels at 88%, according to the latest data released by the International Renewable Energy Agency (IRENA) in 2021.
Moreover, the private sector in Egypt is currently developing several projects with a total capacity of 700 MW of solar energy and 2800 MW of wind-generated energy, which is set to support the country’s vision to become a regional energy hub.
In July 2023, El Molla stated that natural gas is the most important and most consumed in the energy mix in Egypt as it is a clean transitional fuel, adding that petroleum and natural gas resources constitute about 93% of Egypt’s primary energy sources. This comes as Egypt achieved self-sufficiency in natural gas in 2018 after the discovery of the Zohr natural gas field.
Efforts Exerted to Reach Targets
Egypt is working on diversifying its energy mix while ensuring sustainability of energy source. The country is encouraging investors to tap into renewables and green hydrogen. At the same time, the Ministry of Petroleum and Mineral Resources is promoting the usage of natural gas as a cleaner and more cost-efficient source of energy for the time being and for decades to come.
Accordingly, the Ministry is encouraging vehicle owners to add an option to their cars to be compressed natural gas (CNG) fueled, as a transitional must-have step between oil-fueled cars and electric cars. Thus, Egypt has 125 new operating stations to fuel cars with natural gas, as revealed by the Ministry in its 2022 achievements report.
Moreover, the Ministry has connected 14.2 million households to the natural gas grid as stated in October in order to encourage citizens to use natural gas instead of butane, which helps the country save money spent on importing butane, while preserves the environment as natural gas has less emissions.
With the efforts exerted by the Egyptian government and its encouragement investors, the country aims to diversify its energy mix to have 42% of energy generated from renewables by 2030. To have a diversified energy portfolio, the country intensifies the use of natural gas as a cleaner cost-efficient source of fuel that is essential for the energy transition.