Egypt's energy woes
are not new. Production has steadily declined because of a lack of investment in domestic oil and natural gas operations
. Meanwhile, domestic energy demand has risen. But President Abdel Fattah al-Sisi has implemented reforms that have attracted renewed investment to the natural gas sector, with projects such as Eni's Zohr natural gas field being fast-tracked.
Renewable energy will not necessarily meet all of the public's most urgent needs. Cooking fuel, for instance, has sometimes been in short supply, and solar power will not directly resolve that problem. Still, preventing summer brownouts (now all too common in Egypt) is a priority for the government, which has lost much of its popular support. Improved natural gas production can help provide a more consistent electricity supply, but with demand expected to climb, there is room for additional forms of power generation. Recent agreements signed with Japan and South Korea to develop solar power and associated projects indicate that Egypt is looking beyond traditional relationships to further the renewables energy sector, though both European and regional players such as Saudi Arabia and the United Arab Emirates are still active investors.
Saudi Arabia, UAE and Algeria: Exporters Remain Exporters
Saudi Arabia relies on oil for electricity production, and it faces rising domestic demand for electricity at a time when low oil prices have put significant financial strain on the government. Its domestic fuel consumption is following an unsustainable trend. Using over 3 million barrels of oil per day domestically, Saudi Arabia is already the largest global consumer of petroleum for power production. About a third of its daily oil consumption is used to fuel power plants. Without additional sources of generation to satisfy climbing electricity demand, the share of oil consumed by electricity generation would climb.
Although Saudi Arabia is gradually implementing subsidy reforms designed to reduce domestic energy demand, it still will develop energy alternatives, which is where solar power could come into play. Under current goals, renewables would account for 8 percent of electricity production by 2020 and 15 percent by 2030, with solar power accounting for the majority of that increase. In the past, however, Saudi Arabia has lengthened the timelines for such targets.
Yet Riyadh has made significant strides in exporting solar technology. Saudi company ACWA Power is involved in multiple projects in the region (Morocco and Jordan) and farther away (South Africa and Turkey). Saudi Arabian Oil Co., the national oil company, has even expressed interest in developing solar export capability. With plans to add solar technology production facilities, Riyadh could maintain its role as a regional solar exporter, especially as its domestic solar power sector continues to develop. ACWA Power has gained a regional reputation as having sufficient economies of scale to underbid other major solar power firms, mostly Western or East Asian companies. This helped ACWA Power win large bids such as the first phase of Morocco's Noor plant and the Mohammed bin Rashid solar park in the United Arab Emirates.
The United Arab Emirates, meanwhile, has positioned itself as a renewable energy financier and development hub. It is the home of the International Renewable Energy Agency, and it hosts important conferences focused on both renewable and nonrenewable energy. Furthermore, it has used its ample hydrocarbon largesse to develop unique large- and small-scale renewable projects in ways that less resource-rich countries such as Morocco, Jordan and Egypt cannot match.