Renewable and Sustainable Energy Reviews 41 (2015) 11191127

Contents lists available at ScienceDirect

Renewable and Sustainable Energy Reviews

journal homepage: www.elsevier.com/locate/rser

Future economic of concentrating solar power (CSP) for electricity

generation in Egypt
Enas R. Shouman a,n, N.M. Khattab b
a
b

Information Systems Department, National Research Center, Cairo, Egypt

Solar Energy Department, National Research Center, Cairo, Egypt

art ic l e i nf o

a b s t r a c t

Article history:
Received 29 April 2014
Accepted 23 August 2014

Population growth and economic development are leading to a continuous increase in energy demand in
Egypt. At the same time conventional energy sources are diminishing amid growing global concern for
the environment. These factors underline the importance of increasing the use of Renewable Energy
sources. Egypt has enormous potential in Solar energy (CSP). There is sufcient proof of Egypt's potential
for extracting energy from Concentrated Solar Power, especially power on demand generation. CSP
represents a reliable and sustainable source of energy for Egypt with different outputs that can be used.
In this paper, we present a road map strategy for the market introduction of CSP in Egypt, removing
the main barriers for nancing and starting market introduction in the peak load and the medium load
segment of power supply.
& 2014 Elsevier Ltd. All rights reserved.

Keywords:
Solar energy
CSP
Solar Power and renewable energy

Contents
1.
2.
3.
4.
5.
6.

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Egypt fuel vs. international . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Solar energy in Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current CSP technologies for power production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Global concentrating solar power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1.
Global cumulative installed CSP capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2.
Deployment beyond 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3.
Electricity consumption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7. Levelised cost of electricity generation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8. Pespective and barries for CSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9. A strategy for CSP nance in Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1.
Parameter for calculate LCOE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1.1.
Assuming the electricity output per segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1.2.
Cost of fuel (CoF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1.3.
Investment cost of a conventional power plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1.4.
Operation and maintenance cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2.
LCOE for conventional power in Egypt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3.
LCOE in Egypt- CSP vs. conventional power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.4.
Time-frames for cost competitiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix A.
The LCOE estimation follows the following calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Corresponding author. Tel.:+20 2 33389935; fax: +20 2 3337931.

E-mail addresses: enascora@gmail.com (E.R. Shouman), nag_khb@yahoo.com (N.M. Khattab).

http://dx.doi.org/10.1016/j.rser.2014.08.067
1364-0321/& 2014 Elsevier Ltd. All rights reserved.

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Appendix B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1127
Appendix C. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1127
Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1127

1. Introduction
Energy is one of the most basic and crucial elements upon
which to base a life and an economy nowadays. Energy is needed
for daily tasks. Egypt is a country with high energy demand
growth rate exceeding 6% [1].
Due to the rapid depletion of conventional energy resources,
such as natural gas, and increased energy demand, conventional
primary energy resources in Egypt will be unable to satisfy
demand by 2020 [2]. To avoid this situation, the government
should adopt two strategies: reduce demand and increase supply.
In this context Renewable Energy and Energy Efciency is particularly relevant. Renewable Energy addresses the supply of energy
and guarantees environmental, economic and social sustainability
in the energy sector. There are different types of Renewable
Energy, such as solar, wind, biomass, and geothermal. Each type
has its applications as well as advantages and disadvantages. A
well balanced mix of them can secure the energy supply in the
country and even replace conventional energy electricity. Moreover, Renewable Energy serves two key objectives: generating
energy to meet demand and protecting the environment with
emissions-free energy. Energy Efciency addresses the need for a
reduction in the demand for electricity by achieving the maximum
utilization of generated energy while reducing waste.
Renewable Energy and Energy Efciency are considered the
main pillars of environmental compatibility [3]. Egypt has great
potential for the use of solar power due to long sun duration
hours, few cloudy days, low rainfall and high-constant sun radiation. With a potential of 73,000 TWh/year, Egypt is considered one
of the countries with the highest potential for solar power not only
in the Middle East but worldwide. The potential of Concentrated
Solar Power (CSP) is of special importance, as Egypt is one of the
sun-belt countries with high Direct Normal Irradiance (DNI) [3].
The use of solar power is not new to Egypt. In 1913, the rst CSP
experience took place in Maadi-Cairo. Frank Shuman designed a
system to provide irrigation from the Nile to a surrounding desert
area [4,5]. While this potential was discovered in the last century,
it unfortunately was not further utilized. It is noteworthy that with
solar power the country could generate enough electricity to
satisfy domestic demand as well as that from Europe, the Middle
East and North Africa (EUMENA), as well as worldwide.

energy sources must be found which will be most likely be

Renewable Energy sources.
This paper presents a strategy for the market introduction of
concentrating solar power (CSP) plants in Egypt. In the rst
section, the paper explains the need of Egypt for sustainable
supply of electricity and calculates the cost of electricity for Egypt
model case. In the second part, the cost development of concentrating solar power plants is calculated on the basis of expectations for the expansion of CSP on a global level.
The research methodology was based on the review of previous
papers and studies as well as published reports by local governmental
authorities in Egypt such as the New and Renewable Energy Authority
(NREA), the Egyptian Electric Holding Company (EEHC), National
Research Center (NRC) international organizations concerned with
Renewable Energy in general and others specialized in CSP.

3. Egypt fuel vs. international

The prices of energy used globally in 2010 was $ 2.88/million Btu for natural gas and 2.98 LE/ton of heavy fuel oil and (5.17 U.S.
dollars/liter) for light fuel oil. There will be a gap if compared
Egypt fuel prices with fuel world prices as shown in the following
Table 1 [6].
Taking this forecast into consideration, the study will develop a
scenario for CSP future energy production during peak load days
(Fig. 1). Renewable Energy, especially CSP, will play a signicant
role in energy production while fuel will play a very small part.

4. Solar energy in Egypt

This study refers to evaluate the potential of Renewable Energy
resources, especially CSP, according to technical and economic
potential. The technical potential represents the potential that
can be accessed for power generation by the present state of the
art technology [6]. The economic potential represent are those
with a sufciently high performance indicator that will allow new
plants in the medium and long term to become competitive with
other renewable and conventional power sources, considering
their potential technical development and economies of scale [6].
Solar Energy is a key energy source but it is distributed
unevenly worldwide. Fig. 2 shows which areas of the world have
highest potential for CSP, and demonstrates why Egypt is

2. Methodology
CSP power generation can help Egypt meet their sustainable
development goals through provision of access to clean, secure,
reliable and affordable energy. This paper explains removing the
main barriers for nancing and starting market introduction in the
peak load, the medium load and base load segment of power
supply.
This paper aims to obtain a range of data sources with the
objective of developing visualize to comparison the CSP technologies and levelised cost of electricity with that conventional
source. Conventional energy sources are limited and will gradually
be depleted, which will create a shortage in supply in the near
future. This could be resolved by decreasing demand through
energy efciency. To ll the remaining gap in supply, alternative

Table 1
Egypt fuel prices compare international prices.
Fuel

Year
2010

NG Egypt
NG World
NG Gap
HFO Egypt
HFO World
HFO Gap
LFO Egypt
LFO World
LFO Gap

Million/m
Million/m3
Million/Ktons
Million/Ktons
Million/Ktons
Million/Ktons

2.88
7.19
4.31
2.98
3.37
0.39
5.17
13.69
8.51

2015
2.91
6.60
3.69
3.01
3.45
0.44
5.23
14.01
8.78

2020
3.12
6.93
3.81
3.22
3.56
0.34
5.60
14.46
8.85

2025
3.57
7.47
3.90
3.69
3.62
(0.07)
6.41
14.70
8.29

2030
4.30
7.98
3.68
4.44
3.90
(0.54)
7.72
15.84
8.12

E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

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Fig. 1. Power generation on the peak load day in Egypt in 2001, 2020, 2030 according to the MED CSP scenario.

Fig. 2. Map of World Exposure to Direct Normal Irradiance (DNI) kWh/m2/year [7].

considered one of the Sun Belt countries. CSP technology depends

on direct-beam irradiation, and its maximum benet is thus
restricted to high direct normal irradiance (DNI) areas.
Egypt belongs to the global sun-belt. Country's geographical
position is advantageous with solar energy. In 1991 solar atlas for
Egypt was issued indicating that the country enjoys 29003200 h
of sunshine annually with annual direct normal energy density
19703200 kWh/m2. (Fig. 2) and technical solar-thermal electricity generating potential of 73.6 Petawatt hour (PWh).

5. Current CSP technologies for power production

CSP produces electricity by converting solar energy into high
temperature heat using diverse mirror congurations. The heat is
then used to produce electricity through a conventional generator
system using turbine. Currently, research is undertaken on various
CSP technologies for varying levels of high temperature generation
capabilities and conforming high thermodynamic efciencies.
At present, there are four main CSP technology families, which

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E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

can be categorized by the way they focus the sun's rays and the
technology used to receive the sun's energy as follows.
Focus type
Line focus
receiver type Collectors track the
sun along a single
axis and focus
irradiance on a
linear receiver.
This makes
tracking the sun
simpler.

Point focus
Collectors track the
sun along two axes
and focus irradiance
at a single point
receiver. This allows
for higher
temperatures.

Linear fresnel
Towers (CRS)
Fixed
receivers are reectors
stationary
devices that
remain
independent
of the plant's
focusing
device. This
eases the
transport of
collected
heat to the
power block.
Parabolic troughs Parabolic dishes
Mobile Mobile
receivers
move
together
with the
focusing
device. In
both line
focus and
point focus
designs,
mobile
receivers
collect more
energy.
Fixed

This paper will develop a concept proposing a strategy for

management CSP in the Egypt. This will be applied in three steps.
First is calculating the cost of generating power from conventional
sources and its development in the future. Then will be followed
by identifying the cost of CSP and its development in the future
due to the economies of scale after its projected expansion.

6. Global concentrating solar power

Fig. 3. Global Cumulative Installed CSP capacity, MW, 20072012 [8].

China and India have started to show interest in CSP technology

since 2010, with respectively 1.5 MW and 2.5 MWof capacity

installed at the end of 2012 (Fig. 3).
Plants with nominal capacities of 1 MW to 9 MW have also been
developed in Australia, Thailand, France, Italy, and Germany.

6.2. Deployment beyond 2030

By 2040, the global installed CSP capacity reaches 715 GW, with
an average capacity factor of 45% (3900 h/year), thereby providing
2790 TWh annually. The solar share of 85%, or 2370 TWh, represents 8.3% of global electricity generation [9].
By 2050, the global installed capacity reaches 1089 GW, with an
average capacity factor of 50% (4380 h/year), thereby providing
4770 TWh annually, or 11.3% of the estimated global electricity
production in the IEA publication Energy Technology Perspectives
(ETP) 2008. As the global electricity system becomes decarbonized, biogas and solar fuels become the main source of backup
and hybridization in CSP plants from 2030 to 2050. There is thus
no greater reason than before to attempt to build solar-only plants.
Therefore, the roadmap foresees the same solar share of 85%
or 4050 TWh in 2050, representing 9.6% of global electricity
production.
Fig. 4 shows where CSP electricity will be produced and
consumed by 2050. North America would be the largest producing
region, followed by Africa, India and the Middle East. Africa would
be by far the largest exporter, and Europe the largest importer. The
Middle East and North Africa considered together, however, would
produce almost as much as North America (the United States and
Mexico). Indeed, the Middle East-North Africa region is the largest
producer when all solar products are considered, including gaseous and liquid fuels [7].

6.1. Global cumulative installed CSP capacity

6.3. Electricity consumption

Spain and the US dominate the market, with 69% and 28% of
installed capacity respectively, US used to be the only actor in CSP
until 2007 when Spain built its rst plant (PS10).

The DLR (German Aerospace Center) has produced detailed

studies on forecasted electricity consumption for Egypt up until
2050. This is due to an expected population increase as well as the
expected economic growth, which has a proportional relationship
to the electricity demand. This increase cannot be met by conventional energy sources, so the government will need to rely on
Renewable Energy sources. Topping the list of these Renewable
Energy sources is CSP, upon which Egypt will largely depend to
satisfy the electricity demand (Figs. 5 and 6). Egypt shall target a
share of 30% in year 2020 and will reach 55% in year 2050 [6].

Spain then successfully developed 1.9 GW of CSP and now

dominates the market with 69% of global installed capacity.

Middle Eastern and African countries have commissioned

65 MW between 2010 and 2011 in Algeria, Morocco and Egypt.
A additional 100 MW plant came on line in March 2013 in the
UAE (Shams 1).

E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

1123

Fig. 4. production and consumption of CSP electricity by 2050 ( in TWh) [10].

Fig. 5. Electricity scenario by primary energy sources for power generation in Egypt [6].

Fig. 6. Installed capacity required for the electricity supply in Egypt [6].

7. Levelised cost of electricity generation

The most important parameters that determine the 2011/ 11
The levelized cost of electricity (LCOE) of CSP plants are:

The initial investment cost, including site development, com

ponents and system costs, assembly, grid connection and

nancing costs;
The plant's capacity factor and efciency;
The local DNI at the plant site;
The Operation and Maintenance of annual operation
and insurance [$/y] (O&M) costs (including insurance)
costs; and
The cost of capital, economic lifetime, etc.

The economics of CSP and other renewable technologies are,

with the exception of biomass, substantially different from that of
fossil fuel power technologies. Renewable have, in general, high
upfront investment costs, modest O&M costs and very low or no
fuel costs. Conventional fossil fuel power tends to have lower
upfront costs and high (if not dominant) fuel costs, which are
very sensitive to the price volatility of the fossil fuel markets.
In contrast, renewable technologies are more sensitive to change
in the cost of capital and nancing conditions.
It is important to note that the LCOE of CSP plants is strongly
correlated with the DNI. Assuming a base of 2100 kWh/m2/year
(a typical value for Spain), the estimated LCOE of a CSP plant is
expected to decline by 4.5% for every 100 kWh/m2/year that the
DNI exceeds 2100 (Fig. 7).

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E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

Fig. 7. The LCOE of CSP plants as a function of DNI [11].

Table 2
Model parameters for installing CSP capacity.
Preference LCOE of CSP in 2010
Preference direct normal irradiance
CSP progress ratio

Fig. 8. Expansion of globally installed CSP capacity and resulting reduction of

required tariff for the model parameters shown in Table 2.

In Egypt, The estimated average value of the DNI around 2500.

8. Pespective and barries for CSP

CSP is a promising technology in this context because its
resource potential in Egypt is rather high and the plant conguration is similar to that of a conventional power plant, which can be
adapted to any load segment. CSP capacity expansion perspectives
and cost learning curves from different sources were taken as a
basis for the modeling of the levelized cost of electricity (LCOE) of
concentrating solar power plants. The present feed in tariff in
Spain is 27 ct/kWh, which has proven to be sufciently high to
trigger considerable investment in CSP. We will use this as a
reference value for successful market in 20102011 and dene an
equivalent value for MENA region in US$ currency. Assuming an
exchange rate of 1.19 $/ and a reference direct normal irradiance
in Egypt of 2500 kWh/m/a compared to a typical DNI in Southern
Spain of 2090 kWh/m/a, our equivalent required tariff for CSP in
our model case would be 28 USct/kWh in the year 2010 [12]
(Fig. 8).
The CSP Technology Roadmap for Concentrating Solar Power of
the International Energy Agency starts in 2010 with costs ranging
from 20 to 30 US-ct/kWh and reaches 1725 US-ct/kWh by 2013,
depending on annual solar irradiance (IEA 2010) [13].
For the calculation of cost development of CSP in the future, we
have taken expectations of global CSP expansion from different
sources (IEA 2010, Greenpeace 2009, AT Kearney 2010). Expectations for CSP capacity expansion range from 2900 MW to

$/kWh
kWh/M2/a
%

0.280
2400
88.0%

29,000 MW by 2015, from 20,000 MW to 150,000 MW by 2020

and from 230,000 MW to 340,000 MW by 2030. Expectations for
2050 range from 850,000 MW to 1,500,000 MW of cumulated
world-wide installed CSP capacity. In order to calculate cost
reduction effects for our model reference case, we have selected
a moderate global expansion scenario, reaching 8250 MW in 2015,
about 39,000 MW in 2020 and 240,000 MW in 2030. This conservative guess will be the basis for our cost model scenario. In
2050 about 950,000 MW are assumed to be installed. The required
tariff for CSP is reduced according to the world wide installed
capacity, with a progress ratio of PR 0.88. A progress ratio of 0.88
means according to a model by Neij, that the cost is reduced by
12% every time the world wide installed capacity doubles [14].
Under these conditions the required tariff for CSP is reduced to
19 ct/kWh by 2015, 14 ct/kWh by 2020 and 10 ct/kWh by 2030. In
the long term, a cost below 8 ct/kWh is achieved.

9. A strategy for CSP nance in Egypt

9.1. Parameter for calculate LCOE
9.1.1. Assuming the electricity output per segment
For this model, the electricity output per segment is needed,
while only the value of total electricity output is known, which is
101,898 GWh/a [1]. From the reference model for MENA region,
the share of each segment could be calculated and assumed to be
the same distribution in Egypt. Multiplying this share by the total
annual electricity output will give us the electricity output
per segment as shown in Table 3 [1].

9.1.2. Cost of fuel (CoF)

The objective of the coming calculations is to determine the
Cost of fuel for the different segments (peak-, medium, and base
load). In the annual report of the EEHC a case was given that
showed savings of 581 million EGP, when 3195 k toe were saved in
the year 20082009, Specic Fuel Cost [EGP/toe] was 181.84

E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

1125

Table 3
Electricity output per segment in Egypt.
Study [15]

Peak load
Medium load
Base load
Total

Egypt
Installed capacity [MW]

Electricity [GWh/a]

Share of Electricity

Electricity [GWh/a]

1000
2500
4000
7500

2000
10,000
30,000
42,000

5%
24%
71%
100%

4852
24,261
72,784
101,898

according to the following equation:

 fuel cos EGP
specific fuel cost EGP=Toe
fuel ktoe

With this value in mind, as well as knowing the total fuel

consumed in conventional power generation in Egypt
(22,179 k toe) [1], total electricity generation (101,898 GWh/a)
[1], the Cost of Fuel [$/MWh] (7.19) according to the following
equation.



Specific fuel cost USD=MWh





fuel consumption toe  fuel cost EGP=Toe  USD=EGP

Electricity output MWh

2
This is the fuel cost for the base load, the one with the highest
efciency assumed to be 40%. The efciency plays a signicant
role in the fuel consumption and thus the fuel cost. Therefore in
order to estimate the cost of fuel for the medium- and peak load,
with a fuel efciency of 35% and 30% respectively, equation will be
followed:


base
COFmedium=peak COFbase
3
medium=peak

Fig. 9. LCOE for conventional power in Egypt.

where E: electricity generated per year ( installed capacity (kW)

annual full load hours (h/y)) [kWh/y], : Efciency [%].
This will result in a COFmedium of 8.22 USD/MWh and COF
peak of 9.59 USD/MWh.
9.1.3. Investment cost of a conventional power plant
The thermal plant investment cost is important to determine
the LCOE. In Egypt there are three main types of power generation,
Combined Cycle, Gas Turbines-, and Steam Turbine Power Plants.
Knowing the installed capacity of each type, the share of the
production can be calculated with the results. As well knowing the
investment cost of each generation type, i.e. Combine Cycle
800 USD/kW, Gas 500 USD/kW and Steam 1400 USD/kW [16] then
by multiplying these costs with the share of the installed capacity
(35%, 8% and 57%) respectively. we calculate the weighted average
for the thermal plant investment cost of 1114.77 USD/kW [16].
9.1.4. Operation and maintenance cost
The xed O&M costs vary between the different types of
generation, as Combined Cycle charge 2 USD/kW, Gas 13 USD/kW
while the most expensive ones are the Steam Power Plants with
28 USD/kW. Using the weighted average according to the respective
installed capacity (7178 MW, 1641 MW and 11,458 MW) respectively, the average xed O&M cost could be calculated as 17.58 USD/
kW/year [16].
9.2. LCOE for conventional power in Egypt
The resulting cost structure of our model case is shown in
(Fig. 9) for the peak, medium and base load segments as well as for
the resulting weighted average cost of electricity.

Fig. 10. lCOE in Egypt, CSP vs. Conventional Power.

Fig. 9. shows the LCOE calculated as in (Appendix A) for new

plants including capital, operation and fuel for a business as usual
case. Business as usual is dened by maintaining the electricity
mix exactly as dened in Table 1 and applying a fuel cost ination
rate of 1.5% for the fuel mix required for power generation. Fuel
cost escalation and fuel consumption of newly installed power
capacity is especially relevant for quickly growing economies with
high demand growth rates, as it will directly affect economic
development in a negative way. For our model case, we have
assumed a rather moderate 3.6%/a growth of electricity demand,
while growth rates of over 7% per year.
The resulting cost structure for the new CSP plants in Egypt
demonstrated in Fig. 9
In order to determine the value of the current specic investment (C0) (See Appendix B) for Egypt, we need a reference
country. Spain is one of the countries that has realized good
progress in the CSP eld in Europe and worldwide; therefore is a
good indicator to estimate the specic cost in Egypt.
As previously illustrated in (Fig. 10), Egypt has a technical
potential exceeding 2800 kWh/m2/y, while the new identied site

E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

for the coming project (Kom Ombo) has an average DNI of

2500 kWh/m2/y [2]. Therefore this DNI value could be used as
an indicator for the DNI in Egypt in this model. Spain with only a
DNI level of 2090 kWh/m2/y (southern Spain) had a feed-in tariff
of 27 ct/kWh in 2010, which was sufcient to stimulate the CSP
industry in Spain [4,6]. These data could be used for calculating
(C0) [6].


DNI spain
$=
4
Co Egypt Cspain
DNI Egypt
Accordingly C0Egypt assuming an USD to EUR exchange rate of
1.19 is equal to 26.86 ct$/kWh. (C0Egypt 26.86 ct$/kWh), which
is on the lower half of the worldwide estimated CSP costs by the
IEA for 2010 of 2030 ct$/kWh [4]. The reason for this gure is that
the cost depends on the annual solar radiation and Egypt is one of
the countries with high DNI. Applying equation to the following
data (Table 4), results to the CSP experience cost curve for Egypt,
which decreases from 26.86 ct$/kWh in 2010 to 7.58 ct$/kWh in
2050 (Fig. 10).

Realtive cost reduction

1126

1.2
1.1
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

10% Learning rate

20% Learning rate

10

100

1000

Cumulative capacity (GW)

Fig. 11. Relative of CSP technology as a function of the cumulative installed
capacity for learning rates of 10 and 20%.

9.3. LCOE in Egypt- CSP vs. conventional power

The CSP experience curve shows that CSP can be a signicant
component in the future electricity mix of Egypt. CSP can represent a hedge against the volatility of the fuel costs and external oil
markets. Moreover it adds to the economical development of local
industries and aggregate economic development of the country, as
well as having environmental advantages
Egypt is one of the countries with high increase in electricity
demand exceeding 6% per year [1]. Moreover the experienced
electricity outages in summer 2010, will force the installation of
new capacities. Accordingly it is expected during the coming years
to increase the investments in power plants installations. This
could represent an opportunity for CSP. (Fig. 6), will allow us to
compare between the LCOE of the CSP and the conventional power
plant for the different segments. As shown in the gure, the CSP
cost is decreasing signicantly, however this decrease does not
allow it to be economically competitive with the cost of the
electricity from conventional source. The main reason behind this
case is the extremely low fuel prices available in Egypt (because of
the energy subsidy).
9.4. Time-frames for cost competitiveness
An alternative approach to estimate future potential for cost
reduction is to use well-estimating learning curve effect, which
are based on observations for technologies more generally that
their cost reduces by a characteristic percentage for each doubling
of installed capacity (hence, the learning rate is dened as the
percentage reduction in cost for each doubling of installed capacity). Although this concept was originally applied to product of a
single entrepreneurial entity it has been found to work for many
mass produced components on the global scale.
Trib (2004) has suggest an approach that combines different
learning rates of components and the effects of scaling to larger
plants of CSP, and calculated a CSP system learning rate of 14%. The
uncertainty in this gure is high as it is not based on empirical
data. The following analysis, which examines cost reduction up to
50%, therefore considers a range of 1020% as potentially

Fig. 12. Development of LEC over time for CSP systems installed at 15% (low) and
30% (high) growth rates per year (based on a learning rate of 15%).

achievable for CSP. The impact of installed capacity on cost for

this range of learning rates is illustrated in (Fig. 11) [16]. Starting
from an actual installed capacity of 1 GW, a 20% learning rate
would require an installed capacity of around 9 GW to halve costs,
whereas 100 GW would be required in the case of a 10% learning
rate [17].
Fig. 12 illustrates the potential implications of a learning rate of
15%, i.e. in the middle of this range, for when CSP may reach a 50%
cost reduction. Starting from a current CSP installation rate of
around 500 MW per year, and assuming a growth rate in CSP
installations of 15% (low) and 30% (high) per year, results in CSP
achieving a 50% cost reduction between 2021 and 2031 [16].
The learning rate an d the growth rate of installed CSP capacity
are key determinants of when CSP will be cost competitive are key
determinants of when CSP will be cost competitive with other
technologies. the ranges of gures selected in this analysis are
based on expert estimates and opinion, and have not been veried
by actual data (which are not available) it is therefore strongly
recommended that mechanisms are put in place that enforce a
transparent monitoring of installation costs, and the rate of CSP
technology capacity of the learning rate to be rened.
The growth rate of the CSP market is currently constrained by
market. Opportunities rather than production capacity. Additional
incentives, and the creation of new market opportunities in other
countries, will help to speed up the cost reduction process
according to this model (Appendix C) (Fig. 12).

Table 4
LCOE for CSP in Egypt parameters.

10. Conclusion
CSP Progress ratio [15]
Reference DNI for Egypt [kWh/m/y]
Reference LCOE for CSP in Egypt in 2010 [ct$/kWh]

0.88
2500
26.86

Egypt's impressive CSP potential exceeds 73000 TWh/year

one of the highest in the region. Other promising characteristics

E.R. Shouman, N.M. Khattab / Renewable and Sustainable Energy Reviews 41 (2015) 11191127

are a high DNI (19703200 kWh/m2/year), high sun duration

hours (911 h), few cloudy days, large expanses of unoccupied
desert land, and an extended national electric grid. All these
factors make Egypt a perfect location for CSP projects worldwide.
It is expected that CSP will become a striking contributor to the
Egyptian electric and water supply in the medium term. CSP is the
most important future power source for Egypt as it has the highest
potential of all the Renewable Energy sources. Because of this, it
deserves government efforts to promote and encourage investment in this technology. In the ve-year plan to implement the
Egyptian Energy Strategy (20122017), 100 MW of CSP are
planned. This is a small target compared to its huge potential,
but it is a good rst step.
More attention should be given to CSP by creating a special
sub-authority to promote this sector. This entity could prepare DNI
measurement campaigns, identify specic sites for CSP power
plants and prepare feasibility studies. They would also allocate
and acquire land for projects, provide technical support, identify
business partners.
Appendix A. The LCOE estimation follows the following
calculations

Pn
LCOE

I t M t F t =1 rt
Pn
t
t1 Et =1 r

t1

Where
LCOEthe average lifetime levelised cost of electricity generation; It investment expenditures in the year t; Mt operations
and maintenance expenditures in the year t; Ft fuel expenditures
in the year t; Et electricity generation in the year t; r discount
rate; and n life of the system.
Appendix B
The cost experience curve function is
 log PR= log 2
Px
Cx C0
P0
[6,10]
where PR: progress ratio, Cx: specic investment at point x, C0:
specic investment at reference point 0, Px: cumulated capacity at
point x, P0: cumulated capacity at reference point 0
Appendix C
For Figures Growth rate [15].

1127

The cumulative installed capacity, CAP(y) at a given year, y is

given as:
CAP(y) CAP(0) (1 rc)y
where CAP(0) is cumulated installed capacity at present and rc
is growth rate factor (-).
Cost reduction.
The electricity cost at a given installed capacity, LEC(CAP),
reduces by learning rate factor rI
(-) per doubling of CAP;
LEC (CAP) LEC(0) (1  rl) 2log [CAP/CAP (0)]

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