While reaping record rewards from its gas exports, Cairo has also accelerated preparations this month to expand its emerging role as the Eastern Mediterranean’s clean energy hub.

In mid-October, a consortium of France’s Engie, Japan’s Eurus Energy Holdings Corporation and the local Orascom Construction signed a 20-year agreement with state-owned Egyptian Electricity Transmission Company to develop a 500MW wind farm at Ras Ghareb, on the Gulf of Suez. The project is scheduled for completion in 2024. The trio had previously commissioned a 262.5MW facility nearby in 2019.

Separately, Denmark’s Vestas and Amsterdam-based Lekela Power are also each developing 250MW plants in the same reliably wind-swept area.

Meanwhile, the solar buildout continues, adding to the recently completed 1.8GW landmark Benban solar park in the southeast.  Saudi Arabia’s Acwa Power and the UAE’s Amea Power are in the process of developing a combined 700MW at nearby Kom Ombo.

700MW – Solar capacity under development at Kom Ombo

Electricity and renewable energy minister Mohamed Shaker claims the target for 20pc of electricity to be generated from renewables including hydro by end-2022 has been met. By 2035, the goal is 42pc.

Cairo’s motivation for speeding-up renewables development—despite enjoying a 15GW cushion of peak power generation capacity—is partly to free up gas for export. In addition, the authorities are wary of repeating the derogation of a decade ago, when failure to plan for burgeoning domestic energy consumption created a sudden, acute gas shortage and power cuts.

The government has also been signalling its ambition to become a major player in the emerging green hydrogen industry since the start of this year.

Belgium’s DEME and Germany’s Siemens have both signed agreements to cooperate with the Ministry of Electricity and Renewable Energy on the sector’s local development, including building pilot plants. And Italian oil major Eni, which operates the country’s largest gas field, was contracted in July to study the technical and commercial feasibility of producing locally both green and blue hydrogen.

On October 14, Norwegian solar specialist Scatec and fertiliser producer Fertiglobe inked a deal with The Sovereign Fund of Egypt to develop a 50-100MW green hydrogen and ammonia plant at Ain Sokhna, again on the Gulf of Suez. Scatec will build and operate the plant, with Fertiglobe affiliate Egypt Basic Industries Corporation—which owns a nearby ammonia plant—acting as offtaker and the sovereign wealth vehicle assisting with funds.

Cairo has stepped-up regional interconnection outreach lately, both to monetise its general power surplus and to buttress political relationships at a time of high neighbourhood tensions

Engineering work will start immediately with a view to FID next year and commissioning in 2024.

The sponsors describe the project as “the first step towards developing a green hydrogen hub in Egypt” and will seek funding from multilateral financing institutions—primarily European—that have been critical to the creation of Cairo’s wider renewables industry.

The envisaged end-use of the product, whether for export or for local use, was unstated but the former would suit wider aspirations to link the Egypt’s abundant renewables potential with Europe’s decarbonisation efforts.

Power play

Electricity exports are also on the agenda. Cairo has stepped-up regional interconnection outreach lately, both to monetise its general power surplus and to buttress political relationships at a time of high neighbourhood tensions.  

On October 19, the leaders of Egypt, Greece and Cyprus agreed to establish a subsea interconnector to allow the transfer of clean electricity to the EU states. And earlier this month, $1.8bn-worth of contracts were signed to install a 3GW interconnector with Saudi Arabia, adding to links with Sudan, Jordan and Libya.

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Author: Clare Dunkley