Egypt Renewable Energy Market, By Type (Hydroelectric Power, Wind Power, Bioenergy, Solar Energy, and Geothermal Energy) and End Use (Residential, Commercial, Industrial, and Others), By Region, Competition, Forecast and Opportunities, 2028

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 DiversificationEgypt'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 ResourcesEgypt 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 DemandRapid 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 CommitmentsEgypt'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 IncentivesEgypt 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 CreationRenewable 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 ParticipationA 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 DevelopmentInvestments in renewable energy infrastructure, including solar and wind farms, support the modernization and expansion of the country's energy infrastructure.

9. Energy Price StabilityRenewable energy projects offer price stability compared to the volatility of fossil fuel prices, providing long-term predictability for energy costs.

10. Global Energy TransitionEgypt'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 AdvancementsAdvances 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 ManufacturingEgypt 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

Renewable Energy Law (Law No. 203/2014)

Renewable Energy Strategy

Net Metering and Wheeling

Investment Guarantees

Land Allocation

Tax Incentives

Green Bonds and Financing Support

Public-Private Partnerships (PPPs)

Local Content Requirements

Environmental and Social Impact Assessments

Simplified Approval Processes

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

Financing and Investment

Policy and Regulatory Stability

Land Use and Permitting

Technical and Operational Capacity

Storage Infrastructure

Lack of Awareness and Knowledge

Capacity Building

Competition with Conventional Energy

Economic Considerations

Transmission Constraints

Environmental and Social Considerations

Local Industry Development

Project Delays

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

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