5. COUNTRY STUDY EGYPT
5.2 S TRUCTURE OF E NERGY S UPPLY IN E GYPT
Table 5.2: Key Data of the Egyptian Energy Sector
Total primary energy supply (in Mtoe, 2003) (1990) 53.91 (31.9)
Primary energy supply per capita (in toe, 2003) (1990) 0.80 (0.61)
Generated Power (TWh) (2004) 101
Electricity consumption per capita (in kWh, 2005) 1,372
Electrification rate2 (in % of the population, 2004) 98.7
Source: World Bank (2005a); MOEE (2004); IEA (2005a), ENC-WEC (2005).
1: Data from IEA (2005a), different figure (51.4 Mtoe) in ENC-WEC (2005); 2: electricity supply to about 98,7% of Egyptians (MOEE 2004)
Egypt’s total primary energy supply (TPES) has steadily increased in the last three decades, from 8 Mtoe in 1973 to 32 Mtoe in 1990 and 53.9 Mtoe in 2003 (see Table 5.2; Figure 5.2).
The driving forces for this growth have been, on the one hand, the growth of the Egyptian
12 The concept of anchor countries was introduced by the Germand Development Institute (DIE) in 2004.
“Anchor countries” are those countries which are seen as having an outstanding importance in their regional context (see Stamm 2004; BMZ 2004). Other ”anchor countries” in North Africa and the Middle East are Iran and Saudi Arabia.
13 MDG7 denotes the seventh of the "Millenium Development Goals“ declared in 2000, namely securing ecological sustainability by 2015. Stamm’s definition is based on the factors climate and/or resource protection.
5. Country Study Egypt
economy and the almost doubling of the Egyptian population, and, on the other hand, an increase of per capita demand by nearly 3.5 times to 0.80 toe/capita (Figure 5.2). The vast majority of the Egyptian population, about 98.7%, has access to electricity, mostly connected to the grid (see Table 5.2).
0 5 10 15 20 25 30 35 40 45 50 55 60
1970 1975 1980 1985 1990 1995 2000
TPES (Mtoe)
a) Total Primary Energy Supply (in Mtoe) b) Per capita Primary Energy Supply (in Mtoe) Figure 5.2: Primary Energy Supply in Egypt
Data source: IEA (1998); IEA (2001); IEA (2004a).14
5.2.1 General Overview of Egypt’s Energy Market
The Egyptian energy sector is dominated by the domestic production and use of fossil fuels, namely crude oil and natural gas,15 followed by hydropower. Egypt discovered its oil reserves in the 19th century and exploitation started in 1910. Domestic oil production and consumption used to dominate the TPES, but its share has been decreasing since the beginning of the 1990s when oil production started to decline. Nowadays, it contributes around 45% to the TPES, while in 1971 it was more than 80% (IEA 2004b; ENC-WEC 2005). The shares of the different energy resources in total primary energy supply are indicated in Table 5.3.
In 1967, more than five decades after oil exploitation started, natural gas reserves were found.
The share of natural gas in Egypt’s primary energy supply has significantly increased in the last three decades, up to 50% in 2003/4 (ENC-WEC 2005) (see Table 5.3). In 2002, Egypt
14 As IEA newly calculates its figures every year, there can be slight deviations (up to 3 %) between figures in different reports.
15 Egypt possesses only limited coal reserves, adding up to 27 Mt proved recoverable reserves as of 2003/4 (ENC-WEC 2005). The exploitation has recently begun but the production is still quite low so that coal demand is almost completely met by coal imports.
was the second largest producer of natural gas in Africa (WEC 2004). In the last decade, almost all power generation plants have switched from heavy fuel oil to natural gas (EEiii, EEviii).16
Although Egypt’s oil production has decreased in recent years, total domestic energy production is increasing due to the growing production of natural gas (IEA 2004b; ENC-WEC 2005). In 2003/4, domestic primary energy production (64.4 Mtoe) exceeded the Egyptian TPES (53.9 Mtoe)17 by more than 20% (ENC-WEC 2005). This is due to exports of crude oil, petroleum products and, to a lesser extent, exports of liquefied natural gas (LNG) that have recently started in 2005 (IEA 2005).
Table 5.3: Primary Energy Supply / Consumption by Source in Egypt
TPES*
IEA 2004 (in Mtoe, 2002)
Share 2002 Primary Energy Consumption*
ENC-WEC (in Mtoe, 2003/4)
Share 2003/4
Only Total Petroleum Energy + Hydro
Coal 0,632 1.2% 0.936
Crude Oil and Petroleum
Products 27,368 52.2% 22.23 44.0%
Natural Gas 21,832 41.7% 25.39 50.5%
Hydro 1,204 2.3% 2.86 5.7%
Combustible Renewables and Waste
1,355 2.6% n.s.
Solar/Wind 0,019 0.04% n.s.
Total 52,410 100% 51.42 100%
Source: IEA (2004a); ENC-WEC (2005); n.s.: not specified; * different figures given in literature
The petroleum sector currently accounts for around 8.1% of Egyptian GDP (ENC-WEC 2005). As domestic demand is highly subsidised and growing, export revenues are increasingly reduced by national consumption. In its scenarios for the next three decades, IEA does not expect these subsidies to be significantly reduced (IEA 2005a).
Comparing sectoral consumption, the industrial sector still uses most of the final energy although its share has substantially decreased in the last decade, from 45% in 1994 to 36% in
16 See methodology chapter for an explanation of the references.
17 Different figure of 51.4 Mtoe in (ENC-WCN 2005).
5. Country Study Egypt
2005 (see Figure 5.3). While the shares of most other sectors have been stable, the contribution of the transport sector to total energy consumption has increased from 19% to 26% in the same period. In 2002, it almost reached the level of the residential sector, which is the second largest energy consumer. Due to the rising demand in the transport sector, the need for oil products in Egypt is expected to grow by 3.7% per year in the next three decades (IEA 2005a).
a) Energy Consumption by Sector in (1994, in %) b) Energy Consumption by Sector in (2002, in %) Figure 5.3: Final Energy Consumption by Sector
Data source: IEA (1997); IEA (2004a)
5.2.2 Electricity Sector
In the fiscal year 2004/05, total electricity generation was about 101 TWh (see Table 5.4).
Installed capacity and generated electricity have increased substantially in recent years. From 1999/2000 to 2003/04, power generation increased by almost 38% from 73 TWh to 101 TWh and installed capacity grew by around 27% from 14.5 GW to 18.5 GW. The latest figures of the Ministry of Electricity and Energy (MOEE) show an increase of the peak load from 14.7 GW in 2003/4 to 16.7 GW in August 2005 (MOEE, 2005b).
Electricity generation is dominated by thermal power generation, which accounts for around 73.8% (see Table 5.4; Figure 5.5). Most is based on natural gas electrification in steam power plants and combined-cycle power plants. Around 92% of the fuel used in the electricity sector
is natural gas18, which accounts for around 63% of the total primary gas supply in 2003/4 (ENC-WEC 2005). Only 6% of electricity is generated through firing oil.
Figure 5.4 shows the grid and power system of Egypt Unsurprisingly, the main connections and power supply lines are to be found along the river Nile, Egypt’s lifeline.
Figure 5.4 Map of the Power System of Egypt
Source: MOEE (2006)
18 Exceptionally, the share of natural gas in fiscal year 2004/5 was lower than normal, namely around 76 %, due to problems in gas production, while heavy oil had a share of 24%. As the export of liquefied natural gas is expected to increase in the next decade, the conditions and shares on the national level might change. A possible return to the use of heavy oil could have a significant impact on GHG emissions.
5. Country Study Egypt
Another 12.5% of electricity is generated by large hydropower plants located in the Nile river basin (IEA 2005a; MOEE 2005b). Egypt started to use hydropower from large dams as a source for electricity generation in 1960. Aswan I, the first dam, had originally been constructed to control irrigating water. The biggest power plant project, the “High Dam”, was built in 1967 and consists of 12 turbines each with 175 MW, i.e. a total installed capacity of 2,100 MW. Three more plants (Aswan II, Esna, Naga Hamady) were built afterwards between 1985 and 1993. In total, 2,745 MW of hydropower are installed in Egypt. The electricity generated in the large dams is around 12-15 TWh per annum, depending on the water level of the Nile. As no new hydropower plants have been constructed in recent years while total electricity production has continued to increase substantially, the contribution of hydropower to Egypt’s total electricity production has declined from 72% in 1974 to less then 13% in 2004/05 (MWRI 2001; MOEE 2004).
Table 5.4: Installed Capacity and Electricity Generation by Source
Description Installed Capacity 1999/00 (in MW)
Power Generated 1999/00 (in GWh/a)
Installed Capacity 2004/05 (in MW)
Power Generated 2004/05 (in GWh/a)
Share of power generated
2003/04
Total Thermal* 11,818 58,628 15,689 74,560 73.8 %
Hydro 2,745 14,659 2,745 12,644 12.5 %
Wind (5)** 23.5 140 523 0.5 %
Generated from
BOOT19 - - 2,047 13,200 13.1 %
Grand Total 14,563 73,310 18,544 100,996 100 %
Source: (MOEE 2004); ENC-WEC (2005); * including independent power producers, ** not connected to the grid
The proportion of Egyptians having access to the electricity grid is quite high, at about 98%
(MOEE 2004), compared to other North African countries such as Morocco (71.1 %; World Bank, 2005a). This is mainly due to the fact that the vast majority of Egypt’s population (95%) lives in the Nile delta region and the valley of the river Nile between Alexandria and Aswan. In 1998, the grid was connected to Libya and Jordan, but the power export rate is quite low, less than 1% of total generated power in 2003/4. In the years to come a
19 BOOT: “Build Own Operate Transfer” (see chapter 5.4.1.), these are all conventional fossil fuel power plants.
Mediterranean Power Pool is to be created that is to interconnect the electricity grids of North Africa, Spain, Turkey and the Middle East (MOEE 2004).
Figure 5.5: Electricity Installed in Egypt by Technology 2003/04 in MW
Source: MOEE (2006)