Egypt has been on an energy rollercoaster over the past decade, matched only by its political journey. Shortly after the 2011 revolution, its gas export industry was peremptorily mothballed to address a domestic shortage sufficiently acute to cause power cuts and impel a landmark deal to import the fuel from one-time nemesis Israel.

Ten years later, with power self-sufficiency restored, the country is once again carving out a role as a gas export hub while rapidly becoming a regional leader in clean energy. Now, in keeping with global trends and with installed solar and wind capacity having ballooned more than fivefold in five years, Cairo is eyeing entry to the green hydrogen sector. And it is marshalling the financial and technological resources of two European corporate giants to assist.

Such has been Egypt's success in ramping-up gas feedstock supplies to conventional power generation plants that the country enjoys a comfortable capacity cushion. Meanwhile, its wind and sunshine resources are abundant enough to maintain the pace of the renewables buildout. Combined solar and wind capacity reached just over 3GW by end-2019, according to the Abu Dhabi-based International Renewable Energy Agency. And more is in the pipeline—from generating just over 10pc of electricity from renewables the government is chasing a self-set goal of 20pc by 2022 and 42pc by 2035.

Green hydrogen

Using a portion of the surplus renewable energy arising during periods of low demand to produce green hydrogen is now under serious consideration. This could either be used domestically in power stations and for transport—freeing up gas for export and reducing the country’s refined products deficit—or sold internationally as ammonia. Much will depend on the price of gas and the green premium on hydrogen available in export markets.

Using a portion of the surplus renewable energy… to produce green hydrogen is now under serious consideration

In January, German electricity titan Siemens inked an agreement with the Ministry of Electricity and Renewable Energy (MERE) to carry out a pilot project. MERE revealed in a statement plans to update the government’s 2035 Energy Strategy to encompass production and use of the in-vogue fuel.

The following month, President Abdel Fateh el-Sisi hosted a Belgian business delegation for discussions touching on renewables investments. One resulting benefit was an accord in early March between Belgian marine engineering conglomerate Deme, MERE, the Petroleum and Mineral Resources Ministry and the Egyptian Navy to trial green hydrogen production. The Belgian firm’s involvement sat neatly in the context of EU pledges to support green investment projects across North Africa.

Deme, which has been diversifying into offshore renewables, is working locally on the expansion of Abu Qir port near Alexandria. And it already took its first step onto the nascent regional green hydrogen scene in December, when it agreed to develop a production plant at Oman’s Duqm port.

The talk in Egypt so far has been focused on green rather than blue hydrogen, despite the latter’s potential as an alternative outlet for rapidly rising gas production. It is also focused on domestic use, although its fertiliser export infrastructure could be deployed for blue ammonia sales should the still-fledgling international green hydrogen market take off. In the meantime, with global gas demand still climbing, the green option is set to be the priority.

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Author: Clare Dunkley