Keeping the summer lights on - Egypt - Al-Ahram Weekly

Al-Ahram Weekly

07-06-2025

Measures are being taken to avert possible power outages during summer this year.
Government ministries have been collaborating to secure full electricity provision throughout the summer this year and to ward off the threat of any power outages.
'The electrical grid is secure and stable, and the electricity supply is continuous and sustainable throughout this summer,' said Mansour Abdel-Ghani, spokesperson for the Ministry of Electricity, on television at the end of May.
Prime Minister Mustafa Madbouli had asked for steps to be taken to prevent power cuts during the summer months in July 2024, Abdel-Ghani added, which had 'necessitated the collaboration of the ministries of electricity, petroleum, and finance, to end load shedding' as a way of reducing pressure on the grid.
His statement came days after Reuters and Bloomberg's Asharq Business reported that companies exporting Israeli gas to Egypt had announced plans to reduce exports by one billion cubic feet per day, bringing the volume down to 800 million cubic feet per day during the upcoming summer months.
The reports noted that Israel had informed Egypt it would carry out periodic maintenance in May for 15 days, which would lower the volume of exported gas below the agreed-upon amount and below the target for the summer months.
Some 60 per cent of Egypt's consumption of natural gas is used to generate electricity.
Egypt began importing gas from Israel in 2020 under a $15 billion agreement between Noble Energy (acquired by Chevron in 2020) and Delek Drilling. The reduction in imported gas from Israel coincides with the natural decline in production from Egyptian gas fields, which has decreased to 4.1 billion cubic feet per day, while daily demand stands at around six billion cubic feet and rises during the summer.
Egypt's electricity consumption increases by more than 25 per cent during the summer, reaching between 38 and 40 Gigawatt hours per day, up from 32 Gigawatt hours in winter, driving up the consumption of gas and diesel, said Egypt's former petroleum minister Osama Kamal.
He estimates the gap between domestic gas production and consumption at 25 per cent, prompting the government to resort to gas imports to cover the shortfall. Domestic consumption exceeds 6.2 billion cubic feet per day, while local production stands at around four billion cubic feet.
Another reason for the gap between consumption and the local production of gas needed to cover the demands of power plants is the delay in integrating new renewable and nuclear energy facilities, Kamal said.
The government had previously announced long-term precautionary measures to address power outages, especially in the light of geopolitical crises that disrupt global supply chains and key maritime trade routes.
Sources told Reuters in early May that Egypt was in talks with international energy and trading firms to procure between 40 and 60 shipments of liquefied natural gas (LNG) to meet emergency needs ahead of peak summer demand.
This is in line with statements by the presidential spokesperson, who said that President Abdel-Fattah Al-Sisi had directed the government last week to 'take all necessary measures in advance' to prevent recurring power outages.
Madbouli said there was no possibility of renewed power cuts during the summer, despite the financial burdens shouldered by the government.
According to the Reuters report, Egypt will have to spend up to $3 billion, based on current gas prices, to purchase the necessary LNG shipments. This would add further pressure on the state treasury, which is already under financial stress, to avoid power outages amid declining domestic gas production.
The arrival and commencement of operations of a fourth gasification vessel will enable Egypt to maintain a stable gas supply to the electricity grid, said Medhat Youssef, former deputy chairman of the Egyptian General Petroleum Corporation.
However, he added that temporary supply imbalances may still occur, which the government will likely cover using diesel until regular gas flows to power plants are restored.
This may necessitate reducing gas supplies to certain industries due to the high cost of imported gas compared to the economic returns generated by these sectors, despite their export potential, Youssef said. He pointed out that gas-intensive industries yield lower returns than the cost of importing gas since the import price ranges between $14 and $16 per million British thermal units, while the supply price to factories stands at $4.5.
He added that these industries are directed to carry out periodic maintenance for production lines during peak summer consumption periods, rather than during the lower-demand winter months.
Given that Egypt will rely on gas imports as a long-term strategy, Youssef believes the best solution lies in accelerating the development of nuclear power plants, which are highly efficient and reliable sources of electricity despite their substantial investment costs. Nuclear plants reduce the fiscal burden on the state in the long term, especially as global gas import prices grow higher.
At present, Egypt imports LNG and is purchasing a portion of the foreign partner's production share and utilising domestic output in order to meet rising demand driven by population growth. The cost of importing gas over two years is equivalent to the cost of establishing a nuclear power plant, he stated.
According to Ministry of Petroleum figures, the average daily domestic consumption of natural gas in 2022-23 reached 5.9 billion cubic feet per day. Of this, 57 per cent was allocated to the electricity sector, 25 per cent to industry, 10 per cent to the petroleum and gas derivatives sector, six per cent to households, and two per cent to vehicles.
According to the Egypt Vision 2030 Strategy, the government is working to increase the share of new and renewable energy in electricity generation to 35 per cent by 2030 and 42 per cent by 2035, up from the current level of 4.5 per cent.
Gas and petroleum are the main sources of electricity generation, accounting for 90 per cent of total output. By 2030, Egypt's planned energy mix is expected to comprise 27 per cent oil and gas, five per cent hydroelectric power, 16 per cent solar energy, 14 per cent wind energy, 29 per cent coal, and nine per cent nuclear energy.
Gamal Al-Qalioubi, a professor of energy engineering, said that accelerating the development of new and renewable energy plants is the optimal path towards reducing gas imports and reallocating available gas to export-lucrative industries such as fertilisers, cement, and petrochemicals.
This objective has been announced by the government, which aims to add 39,000 Megawatts of new and renewable energy capacity by 2030, of which seven Megawatts have been implemented to date. As a result, wind and solar power plants should be brought online over the next four years at a rate of 10 Megawatts per year.
Al-Qalioubi added that several wind and solar plants are under construction. Had these projects been expedited and connected to the national grid before May 2025, the financial burden on the state to import natural gas would have decreased.
He referred to the 'Wafi' programme implemented by the Ministry of Planning and International Cooperation in collaboration with the European Union, which seeks to replace diesel power plants with clean energy facilities.
Every time a clean energy plant enters operation, a conventional and polluting plant is decommissioned. The programme supports the government's strategy to conserve natural gas used in electricity generation and redirect it to high value-added industrial sectors.
* A version of this article appears in print in the 5 June, 2025 edition of Al-Ahram Weekly
Follow us on:
Facebook
Instagram
Whatsapp
Short link: