Egypt plays catch-up through developing renewable energy

The Ministry of Electricity recently added 3,400 megawatts to the national grid to cope with the country’s energy needs in 2014. The extra supply will be achieved through running boththe Banha station at its full capacity of 750 megawatts in addition to the North Giza station at its full capacity of 1000 megawatts. There are also plans to convert a number of stations to a combined cycle system. The first stage of the project will include running various gas units before the summer of 2014, followed by a second stage in whichsome units will be converted into a steam combined cycle.

New and renewable energy is distinguished by its long-term availability. The hope is to become decreasingly less dependent on non-renewable fossil fuels, including oil and gas, as renewable energy sources have a positive yield and keep the environment clean.

The Supreme Council of Energy, led by Prime Minister Dr Hazem el-Beblawi, decided last September to require energy-intensive factories to meet some of Egypt’s energy needs through renewable sources. Minister of Electricity and Energy Ahmed Imam said the decision requires energy-intensive factories to use renewable resources to cover 50 percent of total energy usage. This energy is expected to be generated by wind farms which will be built through the private sector in coming months. The capacity of the farms is estimated to be 970 megawatts.

The Ministry of Electricity aims to make renewable energy sources comprise 20 percent of energy production by 2020, in addition to adding 1350 megawatts of solar energy.The Ministry plans to link the granting of license renewals for energy-intensive factories to a commitment to utilise renewable energy resources. The price per kilowatt per hour will be determined by the Board of Directors of the Power Utility and Consumer Protection Authority, and implemented in early 2015.

The Ministry of Electricity plans to build six wind farms through private sector investments as well as through IPP (Independent Power Producer) at a total capacity of 600 megawatts.
According to al-Mahdi, Egypt should be diversifying its energy sources and building up morerenewable energy facilities to attract investors and stimulate growth.

Wael Nashar, president of the Middle East Engineering and Telecommunications Company–Oonera, (…)proposed a tariff of LE0.70 per kilowatt per hour. In light of expectations of a decrease in solar energy costs, the tariff should be reduced by six percent annually, he said, reaching a rate as low as LE0.40 per kilowatt per hour by 2027. This is still higher than the cost of generating power through gas, which is expected to reach LE0.69 by 2027.

According to Nashar, the proposed tariff will be equal to the cost of power generated by gas, i.e., LE0.50 per kilowatt per hour. This means that the Egyptian Electricity Holding Company will pay less for solar power than gas.

Nashar hopes the cost of solar energy will be decreased at the beginning of 2027 to rates lower than the proposed tariff to attract more consumers to invest in solar energy.
The cost of not switching to solar energy at this stage is greatin light of economic constraints on Egypt, said Nashar, as the country will pay a projected LE2.17 trillion in order to maintain the power supply through 2027.

Egypt currently depends on a mix of energy resources, 98 percent of which are fossil fuels. Renewable sources account for just 1.2 percent of Egypt’s energy needs, according to the aforementioned study. The same study indicated that approximately 30 percent of energy driving electricity in Egypt comes from fossil fuels, while industrial activities consume approximately 40 percent of total energy sources in-country.
The high price of electricity production is also a factor: costs (wind power)are estimated to be four times as high as electricity generated by conventional energy sources. Energy storage issues are also a problem.


Source: Daily News Egypt

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    German-Arab Chamber of Industry and Commerce
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    British Egyptian Business Association
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    French Chamber of Commerce in Egypt
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    Delegation of the European Union to Egypt
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    Italian Chamber of Commerce in Egypt