In order to encourage the private sector to produce electricity from renewable energy sources, Egypt adopted the Renewable Energy Law (Decree No 203/2014) in 2014.
The Law introduces several development schemes for the private development of renewable energy projects, including competitive bids, feed-in tariff, and independent power production through third party access.
Competitive bidding to be run by the New and Renewable Energy Authority (“NREA”) open to private sector companies for construction of the renewable power projects. Constructed stations will be operated by NREA. Produced electricity will be sold to Egyptian Electricity Transmission Company (EETC) at a regulated price determined by Egyptian Electric Utility and Consumer Protection Regulatory Agency (ERA).
Competitive bidding mechanism for build-own-operate (BOO) contracts to be run by EETC and open to private companies for construction, ownership and operation of the renewable power projects. Generated electricity will be sold to EETC on the price agreed between EETC and plant owner.
Feed-in tariff (FIT) support system under which private sector investors are allowed to build, own and operate renewable energy power stations and sell generated electricity to EETC or to licensed distribution companies via power purchase agreements (PPA). PPA determines duration of the contract and a fix electricity price (feed-in tariff). PPA for feed-in tariffs for solar installations will last 20 years, for wind projects 25 years. Egypt aims to deploy 4300 MW of new renewable capacity under FIT scheme between 2015 and 2017. FIT system is open only for solar PV and wind technologies.
Independent power production through third party access scheme allows independent power producers (IPP) to enter bilateral electricity purchase contracts with eligible consumers and sell them produced electricity directly. EETC must allow for conclusion of such contract and make grid network available. In this case, EETC is allowed to charge and collect greed access fee for grid usage.
For further information on each support mechanism please go to suitable policy records in this Database for Egypt.