May 6, 2024

From Green Energy to Green Hydrogen: The Role of Chinese Investments In Egypt’s Future Energy Landscape

Green hydrogen, generated from electrolysis powered by renewable energy, has emerged in the past years as one of the promising solutions to achieve a net – zero energy and industrial system. Amid notable controversies, green hydrogen is viewed by many governments as a transformative force in their green industrialization agenda, as it presents versatile solutions for various industrial end users and applicable scenarios, ranging from energy storage to transportation (Wappler, et al., 2022). In the past decade, renewable energy generation, hydrogen, and fuel cell technologies have all experienced significant progress regarding their cost, efficiency, and reliability. The tremendous benefits of a combined solution from these new technologies, in the form of green hydrogen or its sister product green ammonia, have been increasingly appreciated and encouraged by governments and market practitioners worldwide.

For developing countries with abundant and exploitable renewable energy sources, the green hydrogen solution provides an alternative pathway towards a low – carbon energy landscape and development trajectory. As a result, an increasing number of countries in the Global South have announced ambitious strategies for developing green hydrogen capacities. It is noted that Middle East and North African (MENA) and sub – Saharan African (SSA) regions in particular, including countries like Morocco, Oman, Saudi Arabia, South Africa, Kenya, and Egypt, to name but a few, have exhibited tremendous enthusiasm in piloting green hydrogen activities, given the unparalleled renewable energy potential in these regions. However, it should be noted that the actual implementation of green hydrogen strategies in the developing context could encounter significant institutional, financial, and technical challenges.

These internal and external difficulties would require tremendous efforts from both the host and investing parties to get over with. In this report, these specific challenges and efforts are examined, by using Chinese investments in the Egyptian green hydrogen market as a case study. We hope the investigation will provide useful insights into the broader implications and prospects of investing and governing complex and integrated infrastructures that link renewable energy and hydrogen production in the Global South context.

Egypt is hand – picked as the case study because it is standing at a crossroads of its energy transition and sustainable development. It hosts the largest economy on the African continent by 3 GDP (PPP) (IMF, 2022), which is predominantly sustained on fossil fuels (IEA, 2023). Egypt is also the second largest country in terms of CO2 emissions in Africa (after South Africa), largely due to its massive gas power generation capacities (Global Carbon Project, 2022). Meanwhile, Egypt is one of the most susceptible countries to the consequences of climate change. Intergovernmental Panel on Climate Change (IPCC) highlights the Nile Delta as one of the three most critical areas with extreme vulnerability to climate – related challenges on the planet (IPCC, 2022). However, Egypt is blessed with the best wind and solar energy resources in the region, and it is building up renewable energy capacity at an unprecedented pace. The official commitment is to achieve 42% renewable electricity generation in its energy mix by 2030, as pledged in the Nationally Determined Contribution (NDC) under the Paris Climate Agreement.

Related Reports

8 Dec 2023

Source:

African Food System Transformation Collective

3 Nov 2023

Source:

bird story agency

Subscribe to our newsletters for our latest updates.

Download PDF Report

Would you like to receive updates and news from The African Climate Foundation?