Blackouts Plague Renewable-Rich Egypt


Egypt’s social, economic and political woes are well documented, highlighted by the world’s media on an all too regular basis. Away from the headlines, however, the thousands of power cuts inflicted almost daily on sections of the country’s more than 82 million population barely rate a mention. They should. When electricity consumption outstrips supply, the lights go out.

And so do thousands of computer screens. That’s not good for business. Makes online business banking and the dozens of other computer-dependent entrepreneurial activities seem a bit of a waste of time. Yet Egypt is an oil and gas producer, believe it or not. But it’s selling comparatively little of its hydrocarbon riches to the rest of the world, thereby missing out on some much-needed hard currency. Instead, domestic oil and gas production is helping to keep the lights on – in between power cuts, that is.

The problem is Egypt’s population is rising every year and therefore consumption of electricity is also increasing. Demand is particularly acute during the hot, sticky summer months when air conditioning units kick in all over the country. The country’s electricity generating infrastructure can barely cope.

Yet, as has been pointed out on numerous occasions, Egypt is also rich in terms of its renewable energy potential, hydro, wind and solar power. So nothing new there. There’s no doubt renewables in its various forms could certainly fill the country’s ever-yawning energy gap. The problem is lack of investment. The will is there but the venture capitalists are not, at least not in any meaningful numbers.

And many will continue to stay away while the political climate remains so uncertain. Business, whether green or any other colour, can’t abide uncertainty.

Leading international law firm Norton Rose says that Egypt, once an exporter of oil and gas, is now struggling to meet its own energy needs. Whilst Egypt has proven oil reserves of 4.4 billion barrels and proven natural gas reserves of 78 trillion cubic feet, an ever increasing percentage of its daily production is being used to meet the country’s growing energy needs.

Norton Rose says, “Egypt’s demand for electricity is growing rapidly and the need to develop alternative power resources is becoming ever more urgent. It is estimated that demand is increasing at a rate of 1,500 to 2,000MW a year, as a result of rapid urbanisation and economic growth. Egypt has been suffering severe power shortages and rolling blackouts over the past years, necessitating the requirement to look to alternative energy options to help meet increasing demand.”

Solar Energy Association of Egypt co-founder Amr Farouk believes the country’s energy problems could be overcome in the short term by the increased use of energy-saving light bulbs and solar water heaters. Replacing outdated and inefficient appliances would also help.

He also believes the government has a crucial role to play in building a sustainable energy future. He suggest it could offer tax reductions and incentives to businesses involved in the development of solar power. That way, solar power could quickly become one of Egypt’s most usable renewable sources for energy and power.

For more information, check out the ‘Turning Blackouts into Business Opportunity’ Facebook page. It’s also well worth reading the report by Norton Rose, ‘Renewable energy in Egypt: hydro, solar and wind’.


This post was supported and written by Denis Sharp, an expert in Middle Eastern business trends, and sponsored by HSBC Bank.

Light bulb picture via Shutterstock

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