Enhancing energy transition in Egypt: The roles of water resources and digitalization

The water-energy nexus has garnered increased academic attention, particularly in light of the targets for the Sustainable Development Goals (SDGs), specifically SDGs 6 and 7. A comprehensive examination of the interactions between water and energy will yield alternatives that accelerate the achievement of the 2050 net-zero emissions objective. Despite the importance of these dynamics, Egypt, a country heavily dependent on hydrocarbons and facing major challenges in transitioning to zero-carbon energy systems through renewable sources, has received limited attention.

Thus, this study addresses these critical gaps by examining how water resources and digitalization affect the energy transition, using economic, industrial, and urban growth as control variables, in Egypt over the period 1990 to 2022. Using the Autoregressive Distributed Lag (ARDL) time series method and the Granger causality test, the results show that water resources and digitalization have a persistent and statistically significant positive impact on energy transition. There are bidirectional causal links between water resources and the energy transition, while a one-way causal link exists from both economic and urban growth to water resources. In line with the conclusions, a successful and environmentally conscious energy transition requires emphasizing technological innovation, sustainable urban planning and development, efficient use of water resources, and policy alignment.