Egypt begins construction of large solar and battery plant amid energy crisis
- Egypt has begun the construction of its first large-scale hybrid solar and battery plant as part of a strategy to address its energy crisis.
- The country's reliance on gas has decreased due to falling domestic production and rising import costs, resulting in blackouts.
- Egypt aims to significantly expand its renewable energy production from 13% in 2023 to 42% by 2030.
Egypt is facing a significant energy crisis, attributed mainly to declining domestic gas production that has resulted in increasing reliance on costly imports. The country has experienced a series of blackouts, especially during the summer months when demand for electricity skyrockets due to high temperatures. In response to this growing problem, Egypt has initiated the construction of its first large-scale hybrid solar and battery plant, reflecting a strategic push towards renewable energy sources. Built by the Norwegian renewable energy company Scatec at a cost of $590 million, this project is a part of Egypt's broader plan to bolster its renewable energy sector. As it stands, Egypt's renewable energy contribution is pegged at 13% for 2023, but ambitious plans are in motion to elevate this figure to 42% by 2030. These efforts are underscored by the country's geographical advantages, as Egypt has some of the world's best solar potential, particularly in the south, where the new solar project is being located. Despite current challenges, including the need for significant investment in renewable technologies and the current low capacity of battery storage in Africa compared to global standards, the government recognizes that solar and battery solutions could provide a viable pathway out of its energy woes. The socio-economic implications of being heavily reliant on fossil fuels have prompted policy shifts aimed at diversifying Egypt's energy sources. National leaders have taken proactive steps, issuing tenders to import fuel oil to manage the immediate crisis while simultaneously ramping up efforts to explore domestic gas resources. Experts, like Terje Pilskog, CEO of Scatec, argue that renewable projects are not just environmentally essential but are increasingly economically attractive, especially as other countries within the continent are beginning to capitalize on solar opportunities. Furthermore, the significance of battery technology cannot be underestimated; it serves as a major enabler of solar projects, facilitating the storage of energy for later use. Globally, battery prices are declining, which is expected to make combined solar and battery storage plants the least expensive electricity generation method by 2027. However, in Africa, investment challenges persist due to perceived risks associated with developing economies, which may complicate the growth trajectory of large-scale renewable initiatives. With evolving energy policies and investments, Egypt's transition to a more diversified energy portfolio could set a precedent for other African nations grappling with similar energy concerns.