Mediterranean Action Plan

EGYPT - National study
includes ensuring availability of supply to different end-users at fair prices. The role of the
agency is still limited.
Electricity market profile
The present electricity market in Egypt is composed of two submarkets:
1) The unified power system of Egypt in which EETC acts as a single buyer of bulk power,
purchasing electricity from the generating companies through Power Purchase
Agreements (PPAs) and selling it to the distribution companies and UHV and HV
customers. The vision of the Egyptian Regulatory Agency is to gradually transform the
market structure from a single buyer – based structure to a free market based on
bilateral contracts or similar. In addition to the generation companies owned by EEHC,
the power sector includes few Independent Power Producers (IPPs) selling electricity to
EETC through long term PPAs. They are mainly NREA‟s wind power plants and three
private thermal power plants under BOOT financing schemes.
2) Isolated limited sub-market comprising mostly tourist villages and resorts at the Red Sea
and the Sinai Peninsula that are mainly served by IPPs.
1.3 Energy S u pply, Dema n d and Produc ti o n: Evo luti o n and
S tr uc t ure
1.3.1 Electricity Access
Rural electrification has been a major government initiative in the last 35 years. The Rural
Electrification Authority (REA) was established in 1971 with a mandate to electrify all rural
areas across Egypt. Its progress in the residential sector can be seen in Table (I.5), which
shows that most of the effort was done between 1975 and 1995 to decrease the share of
rural population without electricity from 45% to only 5%. This ratio has further decreased to
reach to 2.2% by 2005 and is expected to go down to 1.2% by the year 2015.
This high rate of access to electricity enabled the Egyptian government for expanding its
efforts to support new land reclamation projects that have already increased new reclaimed
areas' agricultural productivity, provided new job opportunities, maximized the output of agroindustrial
projects, and stemmed migration to large cities. Egypt is highly exceeding the
objective of the MSSD to cut by half the percentage of the population without access to
electricity by 2015 compared to that of the year 1990.
Table 4 Percentage share of total, urban, and rural population without access to electricity
Item 1975 1980 1985 1990 1995 2000 2005 2010 2015
ENE_C10 Share of
total population
(%) 33 24.4 13.5 7.3 3.8 2.8 1.7 1.2 0.9
Share of urban
Population
(%) 17 10.5 7.5 3.8 2.2 1.6 0.9 0.8 0.64
Share of rural
Population
(%) 45 35 18 10 5 3.7 2.3 1.5 1.1
Note: Average ratio of rural population= 57% of total population
1.3.2 Evolution and Structure of the Energy Demand
Evolution of primary energy demand
Oil and gas demand
Table (I.6) shows the evolution of primary energy demand since 1981/82 till 2004/05 that has
annually increased by 4.64% in average. During the last 25 years natural gas demand has
grown rapidly by an average growth rate of 13% compared to other sources, mainly driven by
increased demand from thermal power plants. Demand for oil has grown in average by
3.34% annually and started to rise after being relatively flat since 1997/98 till 2003/04. The
rise for the year 2004/05 was mainly due to the decrease in the supply of NG for power
stations. Other resources from hydropower and coal have a modest growth rate which
means that they are more or less flat. However, RE is being considered only from wind as
solar water heaters output is not well documented. If we consider the last 15 years from
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