Modelling for power generation sector in Developing Countries: Case of Egypt

In this article, the economic and environmental implications due to the projected evolution of the power sector in Egypt until 2040 are assessed and discussed. The Reference Energy System (RES) of the Egyptian power sector has been defined and implemented in the Open Source Energy Modelling System (OSeMOSYS), based on two different energy scenarios. To increase the accuracy of the analysis, the discount rate on capital investments for the energy technologies has been imposed as a time dependent exogenous variable. Moreover, the robustness of the obtained results has been tested through a sensitivity analysis on the main exogenous parameters. It is found that Combined Cycles, Wind, and Photovoltaic rooftop systems are compatible technologies to be included in the future Egypt's power generation mix. In particular, based on the abundant Egypt's renewables resources endowments, wind power technology comes first in achieving the proposed target on renewables penetration in the country's generation mix, and it might be a feasible alternative to replace a part of the natural gas share. Moreover, the significant impact of discount rate on capitals on the final results is highlighted: low values of discount rate would skew generation mix to include higher investment cost technologies and vice versa.