Clean Energy Investment in Developing Countries: Wind power in Egypt

The document analyzes Egypt's wind energy potential, focusing on the Gulf of Suez, and compares the levelized costs of wind generation against natural gas CCGT. It identifies the primary barrier to expansion as a subsidized natural gas pricing system that makes wind uncompetitive. The report outlines five necessary conditions for large-scale implementation, including a clear long-term strategy, a revised tariff system, and grid reinforcement plans, while discussing the role of the proposed New Electricity Law in attracting private investment.

• Egypt possesses significant wind resources, particularly on the Red Sea coast with mean wind speeds between 8 and 10.5 m/s at 25m. The Gulf of Suez is identified as the most suitable area, with the potential to implement at least 7,200 MW by 2022.
• As of 2008, wind power generated only 0.7 per cent of Egypt's electricity supply, with a total installed capacity of 310 MW. Most of this capacity is located at the Zafarana site and is owned and operated by the New and Renewable Energy Authority (NREA).
• The primary economic barrier to wind expansion is that natural gas provided to electricity generators is heavily subsidized, costing approximately $1/MMBtu, which is significantly below its opportunity cost of $2.5 to $11.5/MMBtu.
• Levelized generation costs for wind in Egypt are estimated at approximately UScent 6/kWh. This is substantially higher than the current prices paid to wind generators, which total around UScent 2.5/kWh, meaning the Government of Egypt must cover the difference.
• Wind power becomes cost-competitive with natural gas CCGT only when gas prices rise significantly or carbon credits are applied; for example, with a carbon credit of $20/tCO2, the break-even gas price is $7/MMBtu.
• Egypt's long-term plans aim for wind energy to represent 12 per cent of total electricity demand by the 2020–2021 fiscal year, requiring a total capacity of 7,500 MW.
• The proposed New Electricity Law introduces mechanisms to attract private investment, including competitive tenders, 15-year take-or-pay power purchase agreements (PPAs), and a special fund to support renewable energy payments.
• Local manufacturing of wind components could reduce system costs by 10–15 per cent in the short term and up to 25 per cent in the long term. Egypt currently has the capability to produce towers and 'balance of system' items, with plans for nacelles and turbines by 2010.
• Grid integration is a major challenge; while the current grid can take 1,500 MW of wind (about 7.5 per cent of capacity), substantial upgrades to transmission lines and the creation of a ring-form network in the Gulf El-Zayt area are required for larger expansions.
• The report identifies five necessary conditions for large-scale wind implementation: a clear statement of purpose, a long-term build-up strategy, a defined tariff system, a grid investment plan, and a clarified role for NREA and other state bodies.

APA

ElSobki, M., Wooders, P., & Sherif, Y. (2009). Clean Energy Investment in Developing Countries: Wind power in Egypt. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/bali_2_copenhagen_egypt_wind.pdf

Chicago

ElSobki, Mohamed, Peter Wooders, and Yasser Sherif. Clean Energy Investment in Developing Countries: Wind power in Egypt. International Institute for Sustainable Development, 2009. https://www.iisd.org/system/files/publications/bali_2_copenhagen_egypt_wind.pdf.

Wikipedia

{{cite report |last1=ElSobki |first1=Mohamed |last2=Wooders |first2=Peter |last3=Sherif |first3=Yasser |title=Clean Energy Investment in Developing Countries: Wind power in Egypt |publisher=International Institute for Sustainable Development |date=October 2009 |url=https://www.iisd.org/system/files/publications/bali_2_copenhagen_egypt_wind.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{elsobki2009clean, author = {ElSobki, Mohamed and Wooders, Peter and Sherif, Yasser}, title = {{Clean Energy Investment in Developing Countries: Wind power in Egypt}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = oct, url = {https://www.iisd.org/system/files/publications/bali_2_copenhagen_egypt_wind.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }