De-carbonization of Electricity Generation in an Oil and Gas Producing Country: A Sensitivity Analysis over the Power Sector in Egypt

Arash Farnoosh and Fendric

Abstract

Fossil fuels are used in power generation in oil and gas producing countries due to the resource availability. However, the growing electricity demand, the potential exports revenues associated to hydrocarbons as well as the environmental policies have to be taken into account for the definition of the electricity generation mix. Thus, the development of the power generation capacities according to the resource availability and the economic factors (demand and costs) is investigated through a modeling approach. Over the past ten years, Egypt has become an important gas producer and a strategic gas supplier for Europe. Moreover, natural gas represents around eighty percent of the Egyptian power sector mix. However, this extensive share of natural gas in power generation mix could not be sustainable in long-term due to the limited hydrocarbons’ resources of Egypt. In this study, the current and future power generation situation of the country is analyzed through a dynamic linear programming model. Finally, a power generation strategy based on a gradual integration of nuclear and renewable is suggested.