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Egypt embraces the age of renewables.


MOST DISCUSSION OF the Egyptian power sector focuses on the political battle over liberalisation and the replacement of oil with gas as a feedstock for thermal power plants. Yet the country is fast becoming the biggest wind power producer in the Middle East and Africa. A series of projects have been developed at Zafarana, while an even bigger multi-phased wind power scheme has been lined up for El Zeit on the Gulf of Suez. The variability of wind speeds means the proportion of wind power in the generation mix must be limited but the government seems keen to maximise the use of this renewable source of energy.

The Egyptian energy minister, Hassan Younes, said in November that the government had accepted the Supreme Council for Energy's goal of producing 20% of all electricity by renewable means by 2020. "By developing the nation's energy supply, we are securing the future of the people of Egypt. This country can play a major role in developing solar power and other technologies that are in demand in the 21st century. This will create new jobs and educational opportunities." Despite interest in solar and biomass technology, it is wind power that will play the biggest role in this dash for renewables, contributing 12% of the overall generation mix by 2020," he noted. This is equivalent to 7,000MW of generating capacity or perhaps 10 of the Egypt Electricity Holding Company's (EEHC) typical gas-fired power plants.

Although the targets are not legally binding, new power sector legislation has been drafted to ensure wind farm operators can access the national grid and some financial incentives have also been introduced. Long-term power purchase agreements will be offered to encourage investment, while funding for feasibility studies and technical support will be offered. Such support will be vital if renewables are to compete with thermal power plants. Energy security and the desire to maximise oil and gas exports are the main reason behind this enthusiasm for wind power. Turbines do not rely on any imported feedstock and every megawatt of wind power generating capacity frees up more gas for sale overseas.

Just as thermal power plants were converted from oil to gas to boost oil exports, so renewables help Egypt to further expand its successful liquefied natural gas (LNG) sector. Energy minister Younes commented: "The coming period will witness a number of bids to invite competitive private sector companies to supply power from renewables." The government hopes to turn Egypt into the renewable energy development hub for the entire Middle East and North Africa region. With plentiful wind and solar resources and sufficient political will to make the most of these resources, there seems no reason to doubt this ambition.

Although significant generating capacity has only been brought on stream since the turn of the millennium, Cairo has sought to encourage wind power sector development in a systematic manner. An in-depth survey of wind speeds in the most prospective parts of the country was carried out between 1999 and 2001. Through this research, the state owned New and Renewable Energy Authority (NREA) discovered that annual wind speeds were highest at El Zeit, at between 10.3 and 10.8 metres a second, and at Zafarana, with speeds of up to 9.2 metres a second.

The Ministry of Electricity and Energy therefore acquired 80sq km of land at Zafarana, which lies about 200 kilometres south-east of Cairo on the Gulf of Suez, for the development of a string of wind farms. Another 64sq km has since been added to enable expansion for decades to come. Wind power is developed on an ad hoc basis in many countries, with a handful of turbines erected at each suitable location but the great advantage of a jumbo single site venture is that developers can share infrastructure. A single transmission line connects Zafarana with the national grid and turbine repair and maintenance facilities have been constructed to serve all project operators.

At present, the Egyptian wind power sector remains based on the Zafarana scheme. Each phase has been developed by foreign national development agencies in conjunction with the NREA. The first 60MW was completed by the Danish International Development Agency (DANIDA) in 2001 and DANIDA has since invested in another 120MW tranche. Kreditanstalt fur Wiederaufbau (KfW) of Germany developed the second phase with 80MW of generating capacity and is in the process of adding another 160MW. Another 85MW has come from the Spanish government and Japan is funding 340MW of capacity. It remains to be seen if this donor-led approach will be sustained throughout the lifetime of the Zafarana venture but it seems to be managing to attract large-scale investment at present. For instance, the 120MW being developed by a joint venture of the Japan Bank for International Cooperation (JBIC) and the NREA requires investment of $125m.

Electricity from Zafarana is sold to the Egyptian Electricity Transmission Company at 12 piastre per kWh (US2.1 cents per kWh). Egyptian national wind power generating capacity has increased from just 5.4MW at the start of 2001 to 430MW by the end of 2007 and this is expected to reach 1,050MW by 2011, increasing on an annual basis thereafter. The pace of increase has been aided by improvements in turbine technology in recent years. The first Danish turbines had generating capacity of 600kW, while the latest models provided by Vestas, Nordex and other manufacturers boast 1MW. Elsewhere in the world, turbines of 2MW and 3MW are becoming more commonplace and the much larger turbines could soon decorate the Gulf of Suez.

With even higher average wind speeds than Zafarana, it was always likely that El Zeit would be the next target for investment. While Zafarana is a huge site by international standards, it is dwarfed by the 656sq km set aside by the government at El Zeit. This is an area roughly the size of Bahrain which could eventually host tens of thousands of turbines. In the shorter terms, the NREA hopes that 3000-4,000MW can be developed at El Zeit, of which 300MW is already at the planning stage. The Japanese government has completed the design for its 220MW phase, while KfW expects to finalise a feasibility study on its 80MW scheme by March.

The Egyptian press has been full of news about Cairo's plans for developing nuclear power plants but reactors will take anything from 10 to 20 years to bring on stream with Egyptian demand for electricity likely to rocket in the intervening period. Nuclear technology is therefore not the answer to the country's short or even medium term power requirements. Even in the longer term, wind power in particular, but possibly also solar power, should play a more important role in the Egyptian generation mix. Rising global demand for gas is only likely to drive up prices, while advances in new technology should make renewables more economically viable. With low carbon emissions, built in energy security and increasing adaptability, Egypt will not be the first country in the region to move wind power to the heart of its power needs.

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Title Annotation:CURRENT AFFAIRS
Comment:Egypt embraces the age of renewables.(CURRENT AFFAIRS)
Publication:The Middle East
Geographic Code:7EGYP
Date:Feb 1, 2008
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