Emerging ESS markets—Egypt: energy security underpins demand, as utility-scale solar-plus-storage and local manufacturing open market opportunities

Power supply security and energy transition converge to underpin energy storage market growth

Egypt’s energy storage market development is driven by the combined forces of power supply security pressure, constraints in natural gas supply, and energy transition targets. As the most populous country in the MENA and one of the region’s largest power systems, Egypt’s resident population has exceeded 114 million, with economic recovery and industrial activity continuing to push up electricity demand.

In the summer of 2024, peak load on the national grid surpassed 37 GW, marking a YoY increase of 12%. This directly triggered a series of short-term supply security measures, including temporary power rationing, emergency spot purchases of liquefied natural gas (LNG), and staggered power consumption for C&I users, highlighting a fundamental issue in Egypt’s power sector. The core challenge has moved away from insufficient installed capacity to structural constraints in system flexibility, with limited ability to manage peak load volatility and disruptions in fuel supply.

From a perspective of energy generation mix, Egypt’s power system remains highly dependent on fossil fuels. By the end of 2024, total installed capacity reached 59.7 GW, with thermal power accounting for more than 88%. As of early 2026, renewable energy capacity increased to around 9.1 GW, with wind and solar PV entering a phase of accelerated grid connection. However, the gas-fired generation-dominated structure has not fundamentally changed. The Egyptian government has reiterated its binding target for renewables to account for 42% of total generation by 2030. However, a significant gap remains between the current actual share and the 2030 target. Looking ahead, large-scale expansion of wind and solar PV will further increase system balancing requirements, directly elevating the strategic value of energy storage.

Electricity price market reform has further strengthened incentives for end users to deploy renewable energy and energy storage. Over the past two years, Egypt has repeatedly raised electricity tariffs for residential, commercial, and high-load users. Against the backdrop of rising natural gas import costs and increasing fiscal subsidy pressure, electricity costs are becoming an increasingly sensitive operational variable for C&I users. As a result, the value of energy storage is expanding beyond its traditional role as a supporting solution for renewable integration: it is also applied across multiple scenarios, including peak shaving and load shifting, alleviating fuel constraints, improving power supply reliability, and supporting corporate green energy transition.
 

Policy targets are clearly specified, but energy storage revenue mechanisms are still evolving

The core policy framework for Egypt’s energy storage sector is the Integrated Sustainable Energy Strategy to 2035 (revised in 2022) issued by the Ministry of Electricity and Renewable Energy (MOEE), which sets a target for renewable energy to account for 42% of total power generation by 2030. This target defines the long-term expansion pathway for wind and solar PV, while also establishing the underlying growth room for the energy storage sector. At the same time, the MOEE stated in February 2026 that Egypt planned to commission 600 MW of energy storage capacity within the year to maintain grid stability, alleviate peak demand pressure, and support the country’s plan to add 3 GW of new PV capacity in 2026.

In recent years, the government has continued to signal an acceleration in energy transition, further reinforcing the strategic role of energy storage within the power system. At present, the core deployment pathways for energy storage in Egypt include mandatory storage allocation for utility-scale wind and solar PV projects, as well as utility-scale storage projects oriented toward grid security and supply assurance. The market remains at a project-driven stage and has yet to establish a complete price signal and market-based trading mechanism.

In 2025, Egypt approved its first batch of 400 MW private-to-private green power projects, providing an initial institutional framework for the deployment of “green power plus storage” in the C&I segment. If industrial electricity prices continue to rise and corporate demand for supply security and decarbonization increases, energy storage applications are expected to expand further. In terms of installation pace, considering the government’s 2026 commissioning targets and the phased rollout of utility-scale solar-plus-storage projects, Egypt is expected to add around 2.7–4.5 GW of energy storage power capacity by 2028, corresponding to 6.2–12.0 GWh of storage capacity. By the end of 2028, cumulative energy storage installed capacity is projected to reach around 2.9–4.8 GW, with total storage capacity of 6.5–12.5 GWh.
 

Utility-scale projects move into deployment as solar-plus-storage becomes the central market themes

At this stage, Egypt’s energy storage market has moved beyond scattered pilot projects and entered a phase of concentrated development of utility-scale projects, with utility-scale solar-plus-storage integration becoming the primary vehicle for market expansion. Energy storage is shifting from an optional add-on for renewable projects to a critical component for enhancing the dispatchability of wind and solar PV, ensuring grid integration and consumption, and strengthening system stability. Solar-plus-storage projects with stable output capabilities are more likely to secure policy support and financing resources.

In terms of project development, Norwegian developer Scatec is the most representative market participant in Egypt. Its Obelisk Phase I project, comprising 1.1 GW of solar PV paired with a 100 MW/200 MWh ESS, has reached financial close and commenced construction. In January 2026, the Egyptian government signed a new cooperation agreement with Scatec and Sungrow, covering 1.7 GW of solar PV and 4 GWh of energy storage capacity. This brings Scatec’s total project footprint in Egypt to 1.95 GW of solar PV and 3.9 GWh of energy storage capacity.

At the same time, Infinity Power and Hassan Allam Utilities are advancing an expansion project in the Benban solar park, involving 200 MW of solar PV paired with 120 MWh of ESS. The project has entered the financing and equipment procurement stage, with Hithium serving as the system supplier. Overall, the continued implementation of utility-scale solar-plus-storage benchmark projects is driving the gradual integration of energy storage assets into Egypt’s mainstream power sector investment framework.

Table: Selected solar-plus-storage projects in Egypt

Source: Publicly available information, compiled by InfoLink
 

Localized manufacturing is accelerating, with Chinese companies participating across the value chain

Compared with most emerging markets, another defining feature of Egypt’s energy storage sector is the rapid progress in localized manufacturing deployment. Egypt combines clear incremental demand for renewables and storage with the geographic advantage of the Suez Canal Economic Zone, strong regional market access and targeted investment incentives. This enables the country to attract both international developers to deploy projects and equipment manufacturers to establish local production at an early stage. For Chinese companies, Egypt’s strategic role is evolving beyond a destination for equipment exports toward a core manufacturing hub within the MENA renewable energy supply chain.

At present, localization across Egypt’s energy storage value chain is concentrated on key segments such as battery manufacturing, inverters, power electronics, and system integration, in which Chinese companies play a central role. Sungrow, for example, is planning a 10 GWh energy storage battery factory in the Suez Canal Economic Zone, while Cornex is advancing a 5 GWh battery project in partnership with Egypt-based Kemet. TBEA has partnered with Kemet to establish Egypt’s first localized grid-connected inverter production line. Meanwhile, PowerChina and other firms are deeply engaged in EPC contracting and project construction for renewable energy projects.

Overall, the role of Chinese companies in Egypt is evolving from pure equipment suppliers to integrated value-chain participants, combining equipment supply, local manufacturing, and project collaboration.

Table: Selected Chinese companies’ presence in Egypt’s energy storage and renewable energy value chain

Source: Publicly available information, compiled by InfoLink

From a development perspective, Egypt is already showing a trajectory characterized by “GW-scale wind and solar PV installations, GWh-scale energy storage deployment, and parallel advancement of localized manufacturing.” However, in terms of actual commissioned capacity, the market remains on the verge of large-scale expansion. For global investors and Chinese companies, Egypt has evolved from a potential market defined by “whether to enter” into a key growth market defined by the pace of entry and the choice of value-chain segment.
 

Conclusion and market outlook

Overall, the core drivers of Egypt’s energy storage market are the rigid demand for power system flexibility, jointly driven by rising peak load, constraints in natural gas supply, power price market reform, and energy transition targets.

Short term: The most visible incremental growth will come from utility-scale solar-plus-storage projects and energy storage projects oriented toward grid security and supply assurance.

Medium term: As private-to-private green power mechanisms improve, industrial electricity prices rise, and local manufacturing capabilities strengthen, C&I energy storage applications are expected to gradually expand. Distributed solar-plus-storage remains at an early stage of market development.

Based on the above analysis, InfoLink expects that Egypt’s cumulative installed energy storage capacity will exceed 6.5 GWh by the end of 2028, with utility-scale projects accounting for more than 80%. C&I storage, on the other hand, is expected to begin contributing more to incremental growth after 2027.

For investors, developers, and EPC contractors, Egypt is not yet a mature market where experience from other regions can be directly replicated. However, it already possesses the key foundations of a growth market, including real and sustained demand for system flexibility, clearly defined national strategic targets, a pipeline of bankable utility-scale projects, and continuously improving local manufacturing conditions. At the current stage, a phased approach that starts with utility-scale projects and gradually expands into local manufacturing and C&I applications is more aligned with the development trajectory of Egypt’s energy storage market.