AMEA Power to build 1.5 GWh battery system in Egypt

From the newsletter

The Egyptian Electricity Transmission Company (EETC) has agreed with UAE-based AMEA Power to develop a 1.5 GWh battery storage system. This will consist of a 0.5 GWh station in Benban and a 1 GWh station in Zafarana. Egypt is rapidly deploying renewables, targeting a 42% share in its electricity mix by 2030.

• Last week it signed a $2.29 billion agreement with Saudi Arabia-based energy company, ACWA Power to develop a 2 GW wind farm, which will be Africa’s largest energy project.

• At the same time, Egypt is targeting electricity export markets and is building a transmission line to Saudi Arabia.

More details

• Egypt ranks second in Africa just after South Africa in terms of installed renewable energy capacity. The country's renewable energy capacity stands at over 7 GW, with the government accounting for approximately 60% of installations, primarily due to long-established hydropower projects.

• The market has since shifted, with policies now enabling private sector participation. Private sector investments have focused almost entirely on solar and wind energy. As of January 2025, Egypt's New and Renewable Energy Authority (NREA) recorded a total of over 17.3 GW of renewable energy projects under construction by the private sector, comprising 11.5 GW of wind and 5.8 GW of solar. In contrast, the government had only 20 MW of solar projects under construction.

• Despite planning for over 17 GW of variable renewable energy, Egypt has not fully integrated battery energy storage systems (BESS) into all its renewable projects. Of this planned capacity, only approximately 2.4 GW of BESS is slated for construction. This includes the Abydos solar power plant, which will incorporate a 300 MWh battery energy storage system, and the Benban Solar Park expansion, which will include a 600 MWh system.

• While a grid fully reliant on variable renewable energy (VRE) sources poses risks, Egypt is not pursuing this model. Instead, it aims for renewables to account for about 60% of its electricity mix by 2060. Although there is no specific recommended share of VRE on the grid, the IEA advises a careful balance to ensure stability. It proposes six phases of approach, with higher phases requiring increased firm power from BESS and baseload electricity sources like hydropower for grid security.

• Egypt is currently classified in phase one, with its renewable share at only 12%, where hydropower effectively mitigates the intermittency of solar and wind. At the moment, Egypt's grid is relatively secure even without extensive BESS. However, as the country increases its renewable share to 60%, providing stable power will become critical.

Our take

• Egypt's investment in large-scale battery storage is a strategic move to solidify its renewable energy transition. BESS will help mitigate the intermittency of solar and wind power, enabling higher penetration of renewables.

• While battery storage offers numerous benefits, the long-term cost-effectiveness and viability of these systems require careful consideration. Although the price of lithium-ion batteries is decreasing, the initial capital expenditure remains high. Batteries also degrade faster than wind turbines and solar panels. This necessitates earlier replacements and adds to installation costs before the end of the turbines' and panels' lifespans. Egypt must ensure that the economic benefits of improved grid stability and renewable integration outweigh the investment costs.

• For BESS to proliferate across various projects, the Egyptian government needs to provide incentives and tax breaks to lower costs. Furthermore, there is a need to diversify renewable energy sources. There is still potential for hydropower generation, which can provide baseload power more affordably.