Egypt Lowers Renewable Energy Targets by 2040
Egypt has officially reduced its renewable energy target from 58% to 40% of its energy mix by the year 2040, as announced by Petroleum Minister Karim Badawi during the Mediterranean Energy Conference 2024. This revision marks a significant shift in the country’s energy strategy, emphasizing a continued reliance on natural gas as a primary fuel source for the foreseeable future.
Prior to this announcement, Egypt had committed to increasing its renewable energy production to 42% by 2035, with plans to accelerate this goal to 58% by 2040. However, these ambitions have now been scaled back. Badawi highlighted the necessity of working collaboratively to boost energy discoveries and attract investments, particularly in natural gas exploration, which remains a crucial component of Egypt's energy landscape.
Continued Dependence on Fossil Fuels
The Egyptian government’s decision comes amid ongoing challenges in rebuilding relationships with foreign oil companies. Delays in payments due to a hard currency shortage have hampered domestic operations, prompting the need for a reassessment of energy goals. Since taking office in July 2023, Minister Badawi has engaged with several global energy firms, including Italy's Eni, which is set to commence drilling new wells in the Zohr gas field in early 2025.
The Zohr field, Egypt's largest gas field, has seen a decline in production, dropping from a peak of 3.2 billion cubic feet per day in 2019 to approximately 1.9 billion cubic feet per day by early 2024. This decline has compelled Egypt to increase its gas imports, including through a pipeline to Israel and LNG shipments, to manage energy demands and avoid prolonged load-shedding.
Rising Fuel Imports Amid Energy Strategy Shift
In addition to natural gas, Egypt has ramped up its imports of high-sulfur fuel oil, reaching 255,000 barrels per day in September 2024, the highest level recorded since at least 2016. This increase in imports underscores the challenges Egypt faces in achieving energy self-sufficiency while navigating its revised energy strategy. As the country adjusts its targets, the focus remains on balancing renewable energy aspirations with the practical realities of energy production and consumption.
