Written by: Islam El-Saqqa
The government has revealed three strategic paths aimed at dealing with the challenges associated with rising energy prices and securing the needs of the local market. The government's vision clarified that the state bearing the entire price differences might require providing additional financial resources or resorting to borrowing, which could lead to an increase in financial obligations and interest in the future.
Supply challenges and stability measures
In the context of evaluating the current situation, the Prime Minister indicated that relying solely on available financial allocations might lead to providing only between 50% and 60% of the required needs for petroleum products if pressure on resources continues. He warned that the shortage of supplies might impose difficult measures, including the possibility of electricity load shedding for periods ranging from six to eight hours daily, while confirming at the same time that work is underway to coordinate efforts between economic and financial entities to secure the necessary credits for imported shipments.
Accelerating the transition to renewable energy
As part of the effort to reduce reliance on traditional sources, an amended plan was announced to accelerate expansion in new and renewable energy projects. The new plan aims to increase the share of renewable energy in the energy mix to reach 45% by 2028, and then raise it to 50% by 2030, through expansion in solar energy projects, wind energy, and electricity storage technologies.
Grid development and consumer support
To achieve these ambitious targets, the cost of rehabilitating the electricity grids necessary to accommodate renewable energy is estimated at about 200 billion pounds, as these allocations have been included in the implementation plans. The state also continues to bear the largest part of the fuel and electricity production costs with the aim of protecting citizens from the large gaps between the actual cost and subsidized prices, and ensuring the continued flow of supplies to the various sectors in the country.
