The bright future of solar energy in Egypt

Ra is the word ancient Egyptians used for the sun. It is also the name they gave to their sun god and creator, one of the era's most important deities. Later on, their Greek-influenced descendants maintained this fascination. The name Heliopolis, one of ancient Egypt's most important metropolises, literally means "city of the sun".

As it turns out, thousands of years later, the sun will be playing just as vital a role in shaping the country's destiny going forward.

Long before Sharm El Sheikh was selected to host Cop27 – in less than three months' time – Egypt's leadership had determined that solar power will be central to its energy future.

Egypt's power sector, second largest in the Mena region behind only Saudi Arabia, is today dominated by natural gas, followed by oil and hydropower. Renewable sources currently account for about 21 per cent of all generation, with just 2 per cent coming from solar.

That is about to change in a big way.

By 2035, Cairo wants renewables to account for 42 per cent of the country’s total energy generation, with solar at about 22 per cent. That is a big leap forward for solar power. It’s no wonder that, over the next decade, Egypt is forecast to see the largest growth in non-hydropower renewables throughout the Mena region, with solar being the biggest driver of this trend. Within this timeframe, Egypt could see the most significant growth in solar energy production in the region, outside of the UAE.

Further, the North African country could potentially have more than 52 gigawatts of solar electricity capacity by 2035. To put this in perspective, Egypt's total electricity-generating capacity in 2020 was about 60GW.

At the heart of this solar revolution is the sprawling Benban Solar Park, about 650 kilometres south of Cairo. Costing about $4 billion to build before its inception in 2019, the park houses a complex of solar installations with a generation capacity of 1.65GW. This may seem meagre for Egypt's power sector, but as one of the largest solar photovoltaic facilities in the world, it represents the seed for momentous changes to come.

It takes a village to raise a child, as the saying goes, and the making of Benban involved a number of players – including the International Finance Corporation, the African Development Bank, the Asian Infrastructure Investment Bank, and several others like them from Europe and Asia. Private financial institutions participated in the project, too. The World Bank's Multilateral Investment Guarantee Agency committed a large amount towards risk insurance. Cairo took a whole-of-government approach to the endeavour, bringing in myriad agencies and departments, not to mention numerous construction, technology and management contractors.

Benban's story is as much a victory for financial and management collaboration and co-ordination, as it is for clean electricity production. More importantly, these huge and complex efforts are also a measure of how much hope the parties involved have in Egypt’s solar future.

Along with these large increases in renewables and more investments in fossil plants, Egypt also plans to develop nuclear power plants on its north coast. Currently a net importer of electricity, the country is expected to have an excess supply of power by the end of this decade. Cairo hopes that becoming a net exporter of electricity can help mitigate its current trade deficit of about $44.2bn.

Indeed, with the further development of electricity interconnections with Cyprus, Greece, Libya, Jordan, Sudan and Saudi Arabia, Egypt's power exports could increase manifold. Currently, the EU is dealing with rising electricity prices and short supplies primarily due to the Ukraine war. Given its geographical proximity, Egypt can, in some time to come, step in to serve the continent's needs. Solar could be a big part of this. This is important also because, the more Egypt builds a diversified electricity system, the more it stands to benefit from the development of a unified African electricity market.

Clean energy production, particularly that of solar power and green hydrogen, will also have positive knock-on effects for the country’s other industries. This energy could be used, for instance, to expand desalination projects and create cleaner and more efficient heating, ventilation and air conditioning systems.

There is another reason why Cairo is on a war footing to significantly increase its renewable energy production.

With the country expected to add another 30 million or more Egyptians by 2035, according to UN figures, it will need to build new cities. The economic and infrastructure growth and development that accompany this will require plenty of electricity.

Egypt will also need to create more jobs to meet its quickly growing population. Renewable energy systems such as solar could become excellent sources of training and education for its people. There are a number of jobs needed to develop solar power for all levels of skill and education. Every penny invested in solar energy could, and should, have offsets that include investments in jobs and training for Egyptians, and funding for training centres and universities.

Modernising and upgrading the grid could help make these new investments even more effective.

Egypt has a number of challenges it has to contend with today, like a number of other countries given the state of the post-Covid-19 world, including inflation, poverty, a depreciating currency and underemployment. These are all solvable problems. And one of the many solutions Cairo is banking on is its ongoing diversification of the country’s energy sources.

Egyptians have, for centuries, used the power of the sun to fuel all kinds of endeavours from agriculture to tourism. Harnessing solar power is the next, most logical, step.