The new Egypt Power Report forecasts that the country will account for 10.01% of Middle East/Africa (MEA) regional power generation by 2013, with a modest theoretical generation surplus.

The MEA power generation estimate for 2008 is 1,200 terawatt hours (TWh), representing an increase of 6.1% over the previous year. We are forecasting an increase in regional generation to 1,561TWh by 2013, representing a rise of 30.14% between 2008 and the end of the period.

MEA thermal power generation in 2008 is estimated at 1,135TWh, accounting for 94.6% of the total electricity supplied in the region. Our forecast for 2013 is 1,453TWh, implying 37.59% growth that reduces slightly the market share of thermal generation to 93.1% – thanks in part to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation. Egypt’s thermal generation in 2008 was an estimated 110.5TWh, or 9.74% of the regional total. By 2013, the country is expected to account for 9.30% of thermal generation.

For Egypt, gas was in 2008 the dominant fuel, accounting for 49.5% of PED, followed by oil at 43.9% and hydro with a 5.3% share of PED. Regional energy demand is forecast to reach 887.6mn tonnes of oil equivalent (toe) by 2013, or 20.7% growth in 2008-2013. Egypt’s 2008 market share of 10.10% is set to ease to 9.99% by 2013. Egypt’s estimated 17.4TWh of hydro generation in 2008 is forecast to reach 21.2TWh by 2013, with its share of the MEA hydro market falling from 58.5% to 37.6% over the period.

Egypt is now ranked first in the updated Power Business Environment rating, reflecting its market size and high proportion of renewables (hydro-power) use. While the regulatory environment is not particularly attractive, the power sector is modestly competitive, with some progress towards privatisation. Egypt is just one point ahead of the UAE, which can be expected to mount a fresh challenge for regional leadership during the next few quarters.

The report forecasts real GDP growth averaging 4.14% a year between 2009 and 2013, with the 2009 forecast being 4.70%. Population is expected to expand from 76.3mn to 82.8mn, with GDP per capita and electricity consumption per capita forecast to increase by 77% and 12%, respectively. Power consumption is expected to increase from an estimated 112TWh in 2008 to 136TWh by 2013, while theoretical surplus capacity is forecast to be 21TWh in 2013, assuming 4.7% average annual growth in electricity generation.

Between 2008 and 2018, we forecast an increase in Egyptian electricity generation of 48.0%, towards the middle of the range for the MEA. This equates to 21.1% in 2013-2018, down slightly from 22.2% in 2008-2013. PED growth is set to remain around 19.3% in 2013-2018, unchanged from the level expected for 2008-2013, representing 42.4% for the forecast period. An increase of 55% in hydro-power use in 2008-2018 is a key element of generation growth. Thermal power generation is forecast to rise 47% in 2008-2018. More details of the longer-term power forecasts can be found later in this report.