How is the government preparing for the summer energy deficit?

Just before daily temperatures in Cairo peaked 30 °C in the middle of winter, the president met with the electricity and renewable energy minister to review his plans for securing the national power supply ahead of the annual summer peak in electricity consumption.

Ensuring sufficient electricity in the summer months has become a thorn in the government’s side over the past three years, as Egypt has struggled with an energy shortage it failed to supply for two years running.

The resulting rolling blackouts in the summer of 2023 and 2024 sparked widespread public anger. 

Last summer, the government spent vast sums of foreign currency on securing emergency infrastructure and reserves of liquid natural gas (LNG) to bridge the deficit and evade the rolling cuts. 

And this year, the presidential spokesperson pointed to a new development in policy to close the gap: an expansion of the role of renewable energy in Egypt’s energy mix. 

The challenge of maintaining uninterrupted supply — particularly during ever-hotter summers that drive surging demand — does not lie in the infrastructure, according to Hafez al-Salmawy, former head of the Egyptian Electric Utility and Consumer Protection Regulatory Agency and professor of energy engineering, as well as two government sources. 

All three agreed that the crux of the problem is securing sufficient quantities of natural gas — the primary fuel for Egypt’s power generation system — and finding the funds to pay for it.

To ease the expected shortfall this summer, the Electricity Ministry said that around 3,000 megawatts (MW) of solar power are slated to be added to the national grid this year.

Salmawy, however, expects the actual addition to be lower, around 2,200 MW. He pointed to four solar plants that are set to begin operations this year. The first — the 500-MW phase one of the Obelisk plant —  has started generating electricity in recent weeks. The second phase of the project, of the same capacity, is due to begin generating power in June. They will be joined by the 1,000-MW AMEA plant and expansions at the Benban Solar Park, which should contribute 200 megawatts. 

Together, these projects would raise Egypt’s solar output from the 2.3 gigawatts it was producing at the end of December by an additional 2.2 GW.

A former Petroleum Ministry official said expanding renewables is the best solution to the shortfall, given falling domestic gas production and steadily rising electricity use. 

But the government has been slow to add renewables capacity to the grid to compensate for the deficit that has widened since it first appeared in 2023. 

Salmawy confirmed that developments in the expansion of renewable energy production plants have been slow to materialize, since they rely primarily on foreign currency. 

The severe dollar shortage, starting in the second quarter of 2022 and persisting through the end of 2025, therefore stalled the introduction and advancement of renewable energy contracts.

Both Salmawy and the Petroleum Ministry source also noted that renewable energy projects — whether wind or solar —  are slow to reach the generation phase, with a considerable timespan elapsing between contract signing and operation. Salmawy elaborated that a solar plant takes between 30 and 36 months to become operational, while a wind farm can take up to 55 months.

Improved foreign currency inflows over the past year have helped accelerate major solar projects. “The plants commissioned this year received sovereign [financing] guarantees last year,” Salmawy said.

Given the limits on how quickly renewable capacity can be expanded, the coming summer months are likely to see the government resorting to the same costly solution it adopted last year to avert blackouts: importing over a hundred cargoes of LNG despite the heavy strain this places on the state budget.

Last year, in addition to importing gas from Israel via pipeline infrastructure — volumes that accounted for more than 70 percent of Egypt’s total gas imports — Egypt imported 140 LNG shipments, most of them from the United States, according to a Cabinet source who spoke on condition of anonymity. 

The LNG import bill accordingly reached historic levels last year, totaling US$7.2 billion in the first ten months, according to foreign trade data from the Central Agency for Public Mobilization and Statistics. 

The Cabinet source expects the government to import a higher number of cargoes in 2026, anticipating around 155 to 160 cargoes, with the import bill due to reach record highs again accordingly.

The government has already secured some of the extra supplies it will require in 2026. It closed two major LNG supply agreements in recent months, the first a $4 billion deal in November to import 80 cargoes from the US, followed by a second agreement early this year with Qatar for 24 cargoes.

On Saturday, Bloomberg Asharq cited a government source saying that the government is preparing to issue a tender for a further 75 LNG cargoes this year. The figure, lower than earlier estimates, is due to an ease in demand following the contract with Qatar, the Cabinet source told Mada Masr. 

At the same time, the government is anticipating that demand could ease as it plans a hike to prices nationwide. 

Worsening the deficit in domestic fuel production, Egypt has also witnessed a marked rise in the level of electricity demand and consumption. 

After contracting by 1.2 percent in 2020, consumption gathered pace in the years that followed, growing by more than six percent in fiscal year 2023/24, according to the latest data from the Egyptian Electricity Holding Company. 

Daily peak load climbed to nearly 40 gigawatts in summer 2025 — an eight percent increase over the previous year’s record. 

Salmawy told Mada Masr that the “consumption explosion” is likely to subside somewhat next summer as the government rolls out “significant” electricity tariff increases at the start of the new fiscal year in July.

Amid severe economic turbulence, the government has kept electricity prices unchanged for nearly two years “to ease citizens’ hardship" and contain inflation.

But following the structural adjustment recommendations of a series of International Monetary Fund programs, the government has sought to phase out budgetary spending it allocates to absorb the shock of global fuel price fluctuations on the population.