RIYADH: Non-oil companies in Egypt saw sales growth for the first time in nearly three years, as the Purchasing Managers’ Index rose to 49.9 in June from 49.6 in May. 

According to S&P Global, this rise in the index, just fractionally below the 50 mark, was driven by government policy moves that supported a relaxation of price pressures, ultimately showing signs of economic stability in the country. 

Egypt’s non-oil sector has been facing headwinds over the past few years, with the country battling economic shocks due to the crisis in neighboring Gaza, currency pressure, and the Suez Canal disruption, the US-based credit rating agency said in its previous reports. 

“Egypt’s non-oil economy ended the first half of 2024 on a high according to the latest PMI data. With the headline PMI reaching 49.9 and total new order volumes rising for the first time in nearly three years, businesses appear to be heading on the road to recovery,” said David Owen, senior economist at S&P Global Market Intelligence.  

S&P Global noted that any PMI reading above 50 indicates growth in the non-oil sector, while readings below 50 signal contraction. 

The report further noted that the country’s output levels fell at the softest rate in nearly three years, while the volume of input purchases rose for the first time since December 2021.  

Moreover, input cost inflation remained soft despite accelerating to a three-month high in June, leading to another modest rise in selling charges.  

Additionally, business intakes at non-oil firms in Egypt rose for the first time since August 2021, as the proportion of firms seeing demand improvement started to outweigh those seeing a reduction.  

“Although output levels continued to fall on average, they were also close to growth territory, as business capacity was helped by a fresh increase in the buying of inputs. If we see further rises in sales and purchases in the second half of this year, firms should have the motivation and need to expand their output,” said Owen.  

He added: “Another positive is that price pressures have remained much cooler than in the first quarter of this year during the country’s foreign currency crisis.”  

The report highlighted that the manufacturing and services sectors witnessed a rise in new orders in June, while the construction, wholesale and retail industries saw a decline in the month.  

Moreover, employment numbers across the Egyptian non-oil economy were relatively stable in June.  

Even though some firms opted to boost their workforces amidst rising sales, many companies reported layoffs and the non-replacement of leavers, the report added.  

The data for June also revealed that inflationary pressures on businesses had been greatly suppressed in the second quarter of the year.  

“While June saw the fastest rise in input prices for three months, firms generally commented that this was due to a high degree of volatility in market prices rather than an accelerating inflation trend,” concluded Owen. 

RIYADH: Advanced smart grid technologies are pivotal for enhancing energy transition and system reliability, with projections indicating a need to double investments to $600 billion annually by 2030. 

In its latest report, the International Energy Agency emphasized that the success of the shift hinges on transforming various facets of the power system, including electricity generation plants, transmission and distribution systems, and consumer practices. 

This comes as the energy think tank projected that overall investments in smart grids should double annually through 2030 from the current $300 billion. 

The world aims to transition from fossil-based energy systems to renewable sources like wind, solar, and hydropower. This global shift, known as energy transition, is driven by major commitments such as the Paris Agreement, which targets net-zero carbon emissions by 2050. 

“The clean energy transition increases electricity demand and requires more wind and solar power, stressing power grids. Smart grid technologies can manage this transition, reduce the need for costly new infrastructure, and improve grid resilience and reliability,” said IEA in the report.  

It added: “In the pursuit of a cleaner energy sector, smart grid technologies are pivotal in modernizing a consistently overloaded grid. Digital technologies will also allow to integrate continually increasing shares of renewables from multiple sources, and further engage end users so that they can improve energy efficiency and reduce emissions.” 

In January, a research report by experts at Saudi Arabia’s King Fahd University of Petroleum and Minerals stated that smart grids could revolutionize the Kingdom’s current energy management systems. 

According to these researchers, such grids could enhance the integration of renewables into the electricity grid by enabling better energy transactions and ensuring a reliable supply. 

Meanwhile, Saudi Arabia is making steady progress in developing smart grids as the Kingdom aims to achieve its net-zero goals by 2060. 

In February, Peter Terium, CEO of NEOM’s water and electricity subsidiary ENOWA, told Arab News that the company has developed a blueprint for the world’s first renewable, high-voltage smart grid. 

Terium explained that the smart grid will enable ENOWA to supply the NEOM region with 100 percent renewable electricity while reducing the corridor footprint by 50 percent.  

He noted that the principle of smart grids is simple, as they are traditionally used on a small scale in buildings. 

Digital innovation 

The IEA emphasizes that measuring digital innovation in the power sector is crucial for tracking, improving, and implementing policies to shape the digitalization process effectively.  

The report highlighted that quantifying innovation is challenging due to the lack of standardized metrics, with patent filings being the best way to measure progress in this sector. 

“In this rapidly evolving landscape, patent data serve as a proxy measure of investment in innovation, offering valuable insights into the intellectual prowess and competitive strategies of people and organizations striving to redefine how we generate, transmit and utilize electrical power in the digital age,” said the IEA.  

The global body revealed that between 2000 and 2023, 16,000 International Patent Families were filed related to smart grids, accounting for 0.2 percent of total IPFs across all technologies. 

The report added that 2011 “saw a peak in smart grid innovation with 2,000 unique inventions produced, representing 11 percent of power sector innovations. Following a period of decline, the relative share of smart grid innovations increased to 13 percent in 2022, aligning with the trajectory of the IEA Net Zero by 2050 Scenario.”  

The agency noted that the highest shares of IPFs in the smart grid sector are focused on systems supporting the interoperability of electric or hybrid vehicles. Additionally, significant patent filings are also happening in demand response systems and energy storage unit technologies. 

Geographical distribution  

East Asia dominated smart grid innovation from 2017 to 2021, accounting for over half of the IPFs. Since 2007, it has consistently led globally, with North America and Western Europe sharing the remaining IPFs, according to the IEA. 

“In the last two decades, there has been a transition from Europe and the Americas being the primary sources of smart grid innovation to Asia taking on a more prominent role in this field,” said the report.  

It added: “North America experienced a peak share of smart grid innovation in the period between 2002 and 2006, but consistently produced less than a third of global smart grid patents for the remaining years.”  

The report disclosed that a quarter of smart grid IPFs registered in the past decade originated from inventors in Japan, with nearly an equal share coming from innovators in the US.  

The IEA added that the remaining half of registrations came from investors based in China, Germany, and South Korea.  

In a separate report released in May, the IEA highlighted that urban planning, digitalization and grid investment can help cities manage the impacts of climate change and growing energy demand.  

In that report, IEA emphasized, “Reducing emissions in cities is essential for the world to meet its energy and climate goals — and digital solutions that manage consumption patterns and optimize infrastructure can play a significant role.” 

The energy agency further highlighted that the pace of deploying digital technologies in the energy sector will heavily depend on the ability to build a skilled workforce.