Estimating Urban and Rural Residential Energy Demand Amidst Economic Challenges

This paper presents a detailed bottom-up analysis of residential energy demand estimation for Egypt, considering the country’s economic challenges and fluctuations in the Egyptian Pound (EGP) against the US Dollar (USD). Using the Model for Analysis of Energy Demand (MAED) integrated with socioeconomic data, the study develops a replicable framework to estimate energy demand in both urban and rural areas. Data from national sources, including demographic and income distribution statistics, are disaggregated by quintile and living area to construct realistic energy consumption profiles. Three scenarios based on EGP/USD exchange rates from 2019, 2022, and 2024 are simulated to project demand from 2023 to 2050. Findings reveal that currency devaluation which led to a contraction in household income, particularly affecting higher-income quintiles, resulted in reduced overall energy demand. Urban areas show a contraction in the projected increase of electricity demand from 39% to 12%, and 5% under the 2019, 2022, and 2024 exchange rate scenarios, respectively, while rural areas exhibited lower contraction of growth rates to 19% and 15% by 2050. The analysis underscores the strong linkage between macroeconomic conditions and energy demand, highlighting the need for tailored, equitable energy policies that account for economic vulnerability and urban-rural disparities in emerging economies.