Difference between revisions of "Egypt Energy Situation"
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== Overview Energy Market == | == Overview Energy Market == | ||
| − | The primary energy production in Egypt has been steadily rising and in 2006 reached 62 501 ktoe which translates to 2 617 PJ or 726 887 GWh. While natural gas production is rising steadily and export capacities increase, the production of petroleum products is declining. At the same time, demand for petroleum is further increasing, partly caused by high domestic subsidies. Recently, major natural gas resources have been discovered. For the foreseeable future, natural gas is likely to be the primary growth engine of Egypt’s energy sector. | + | The primary energy production in Egypt has been steadily rising and in 2006 reached 62 501 ktoe which translates to 2 617 PJ or 726 887 GWh. While natural gas production is rising steadily and export capacities increase, the production of petroleum products is declining. At the same time, demand for petroleum is further increasing, partly caused by high domestic subsidies. Recently, major natural gas resources have been discovered. For the foreseeable future, natural gas is likely to be the primary growth engine of Egypt’s energy sector. |
| − | The primary energy production has developed fast in the past; starting from around 8 000 ktoe in 1971, it developed quite linear to the current level. Main growth has been seen in the oil and gas sectors, whereas coal and peat show a more static development on a low level. Shares of renewable energies have not increased to a significant extent and continue to play a minor role in the energy supply structure. Owing to the vast resource base, the energy sector is important for Egypt’s economy and will continue to play a major role in coming years. Egypt is a net exporter of crude oil and natural gas. In addition, it has a strategic position in oil transfer because of its operation of the Suez Canal and Sumed (Suez-Mediterranean) Pipeline, two major routes for the transfer of Persian Gulf oil. In terms of coal and peat, Egypt is a net importer. | + | The primary energy production has developed fast in the past; starting from around 8 000 ktoe in 1971, it developed quite linear to the current level. Main growth has been seen in the oil and gas sectors, whereas coal and peat show a more static development on a low level. Shares of renewable energies have not increased to a significant extent and continue to play a minor role in the energy supply structure. Owing to the vast resource base, the energy sector is important for Egypt’s economy and will continue to play a major role in coming years. Egypt is a net exporter of crude oil and natural gas. In addition, it has a strategic position in oil transfer because of its operation of the Suez Canal and Sumed (Suez-Mediterranean) Pipeline, two major routes for the transfer of Persian Gulf oil. In terms of coal and peat, Egypt is a net importer. |
Final energy consumption in 2006 added up to 43 072 ktoe (equal to 500 927 GWh or 1 803 PJ). | Final energy consumption in 2006 added up to 43 072 ktoe (equal to 500 927 GWh or 1 803 PJ). | ||
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== The Electricity Grid == | == The Electricity Grid == | ||
| − | In 2007 / 2008, the state-owned carrier grid consisted of 39 552 km. The grid is subdivided into six geographical zones, namely Cairo, Canal, Delta, Alexandria and West Delta, Middle Egypt and Upper Egypt. The country’s entire territory is covered. | + | In 2007 / 2008, the state-owned carrier grid consisted of 39 552 km. The grid is subdivided into six geographical zones, namely Cairo, Canal, Delta, Alexandria and West Delta, Middle Egypt and Upper Egypt. The country’s entire territory is covered. |
| − | Medium and low voltage as well as isolated grids are owned and operated by the respective distribution companies. In June 2008, the distribution grid consisted of 142 983 km of medium voltage and 230 187 km of low voltage lines (not including non-energy use). | + | Medium and low voltage as well as isolated grids are owned and operated by the respective distribution companies. In June 2008, the distribution grid consisted of 142 983 km of medium voltage and 230 187 km of low voltage lines (not including non-energy use). |
| − | Since 1998, efforts have been made to interconnect the Egyptian electricity grid internationally. As a result, the five-country interconnection of Egypt’s system with those of Jordan, Syria, Lybia and Turkey has been completed in 2002.<ref>EIA 2008. Energy Information Administration. Country Analysis Briefs – Egypt.</ref> Links to the European electricity market have been established through the sub-marine connection between Morocco and Spain (400 KV) and over the connection Syria –Turkey. | + | Since 1998, efforts have been made to interconnect the Egyptian electricity grid internationally. As a result, the five-country interconnection of Egypt’s system with those of Jordan, Syria, Lybia and Turkey has been completed in 2002.<ref>EIA 2008. Energy Information Administration. Country Analysis Briefs – Egypt.</ref> Links to the European electricity market have been established through the sub-marine connection between Morocco and Spain (400 KV) and over the connection Syria –Turkey. |
In April 2004, the Arab Maghreb countries agreed to repower the national grids of Egypt and Libya in order to upgrade the interconnection.In the fiscal year 2007 / 2008, the Egyptian Electricity Holding Company (EEHC) faced a challenge meeting the unexpectedly high peak demand, reaching 19 738 MW. | In April 2004, the Arab Maghreb countries agreed to repower the national grids of Egypt and Libya in order to upgrade the interconnection.In the fiscal year 2007 / 2008, the Egyptian Electricity Holding Company (EEHC) faced a challenge meeting the unexpectedly high peak demand, reaching 19 738 MW. | ||
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== Installed Capacity == | == Installed Capacity == | ||
| − | Between 2003 and 2008, the total installed capacity increased about 24 %, mainly through the added combined cycle and wind power installed capacity. | + | Between 2003 and 2008, the total installed capacity increased about 24 %, mainly through the added combined cycle and wind power installed capacity. |
| − | In June 2008, the total installed capacity reached 22 583 MW, equivalent to a 2.9 % increase compared to the previous year. Of this, conventional steam power stations accounted for 11 571 MW (51.9 %), combined cycle power plants for 6 449 MW (28.9 %), and hydropower stations for 2 842 MW (12.8 %). Wind power plants provide the remaining 305 MW (1.3 %). Since 2002 / 2003, three private-sector electricity utilities have been contributing 2 048 MW of generating capacity (9 % of overall countrywide capacity in 2008) from three gas-fired steam power plants. According to the Ministry of Energy and Electricity’s five year plan from 2005, the installed capacity is to increase to a total of 32 GW by 2010. | + | In June 2008, the total installed capacity reached 22 583 MW, equivalent to a 2.9 % increase compared to the previous year. Of this, conventional steam power stations accounted for 11 571 MW (51.9 %), combined cycle power plants for 6 449 MW (28.9 %), and hydropower stations for 2 842 MW (12.8 %). Wind power plants provide the remaining 305 MW (1.3 %). Since 2002 / 2003, three private-sector electricity utilities have been contributing 2 048 MW of generating capacity (9 % of overall countrywide capacity in 2008) from three gas-fired steam power plants. According to the Ministry of Energy and Electricity’s five year plan from 2005, the installed capacity is to increase to a total of 32 GW by 2010. |
Egypt has 35 decentralised power plants (mostly diesel units) that are not connected to the national grid. The combined installed capacities of these plants added up to 258 84 MW in 2007/2008. Approximately, 350 GWh of electricity were supplied to local users including tourist resorts.<br> | Egypt has 35 decentralised power plants (mostly diesel units) that are not connected to the national grid. The combined installed capacities of these plants added up to 258 84 MW in 2007/2008. Approximately, 350 GWh of electricity were supplied to local users including tourist resorts.<br> | ||
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== Electricity Generation == | == Electricity Generation == | ||
| − | Egypt is a net exporter of electricity, importing 208 GWh of electricity in 2006, while exporting 557 GWh. Transmission and distribution losses account for approximately 10 % (12 583 GWh) of total electricity produced. | + | Egypt is a net exporter of electricity, importing 208 GWh of electricity in 2006, while exporting 557 GWh. Transmission and distribution losses account for approximately 10 % (12 583 GWh) of total electricity produced. |
In 2005, losses added up to 16 % of total electricity supply. The main consumer of electricity in Egypt is the residential sector which accounts for 37 % of the total consumption, followed close by the industrial sector (35 %). A future average annual growth in electricity demand of 6.35 % is expected, partly due to rising living standards and very low electricity prices. In order to meet the expected growth in demand, EEHC prepared the 6th five year plan (2008 – 2012). The plan entails adding electricity production capacity of 7 750 MW, while at the same time maximizing the use of combined cycle installations to reach a 37 % share of the total installed capacity in 2011/2012. On 31 January 2009, the government has finalized the follow-up five-year plan from 2012 – 2017 which aims at adding further 10 450 MW generation capacity. | In 2005, losses added up to 16 % of total electricity supply. The main consumer of electricity in Egypt is the residential sector which accounts for 37 % of the total consumption, followed close by the industrial sector (35 %). A future average annual growth in electricity demand of 6.35 % is expected, partly due to rising living standards and very low electricity prices. In order to meet the expected growth in demand, EEHC prepared the 6th five year plan (2008 – 2012). The plan entails adding electricity production capacity of 7 750 MW, while at the same time maximizing the use of combined cycle installations to reach a 37 % share of the total installed capacity in 2011/2012. On 31 January 2009, the government has finalized the follow-up five-year plan from 2012 – 2017 which aims at adding further 10 450 MW generation capacity. | ||
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== Liberalisation<br> == | == Liberalisation<br> == | ||
| − | Article 7 of Law No. 100 dating from 1996 stipulates that local and international investors can obtain concessions for building and operating electricity plants. A new investment law enacted in 1997<ref>Spohn, Hans-Dieter et al. 2009: Egypt – Business Guide (http://www.ghorfa.de/pdf/BusinessGuide_Aegypten.pdf ) Retrieved on 16th October 2009</ref> includes various incentive mechanisms such as state guarantees for investors. At the time of contract negotiations concerning the supply of electricity from privately built power plants in the late 1990s, an initial public offering of stock in all seven of Egypt’s state-owned monopolistic electricity providers was in preparation for the Egyptian stock exchange. However, due to lack of interest among investors, the plan was never implemented. The last significant step of reform took place in 2000, when the Egyptian Electricity Authority was restructured to become the Egyptian Electricity Holding Company (EEHC). That conversion is regarded as a step towards a more entrepreneurial approach because, for example, EEHC is expected to finance future projects from its own budget without governmental intervention. The conversion also included the break-up of formerly vertically integrated utility companies into individual enterprises each of which is now an independent company with its own, autonomous management and separate accounting. EEHC was created as a new approach to the privatization of its subsidiaries, but no part of any state-owned enterprise has been privatized by now. Via EEHC, the Egyptian government still controls 90 % of all electricity production and is maintaining its monopoly on transmission and distribution. Until today three privately operated power plants with foreign investors have been built according to the build-own-operate (BOO) principle (Sidi Krir, Suez and Port Said), representing approximately 10 % (2 049 MW) of the current | + | Article 7 of Law No. 100 dating from 1996 stipulates that local and international investors can obtain concessions for building and operating electricity plants. A new investment law enacted in 1997<ref>Spohn, Hans-Dieter et al. 2009: Egypt – Business Guide (http://www.ghorfa.de/pdf/BusinessGuide_Aegypten.pdf ) Retrieved on 16th October 2009</ref> includes various incentive mechanisms such as state guarantees for investors. At the time of contract negotiations concerning the supply of electricity from privately built power plants in the late 1990s, an initial public offering of stock in all seven of Egypt’s state-owned monopolistic electricity providers was in preparation for the Egyptian stock exchange. However, due to lack of interest among investors, the plan was never implemented. The last significant step of reform took place in 2000, when the Egyptian Electricity Authority was restructured to become the Egyptian Electricity Holding Company (EEHC). That conversion is regarded as a step towards a more entrepreneurial approach because, for example, EEHC is expected to finance future projects from its own budget without governmental intervention. The conversion also included the break-up of formerly vertically integrated utility companies into individual enterprises each of which is now an independent company with its own, autonomous management and separate accounting. EEHC was created as a new approach to the privatization of its subsidiaries, but no part of any state-owned enterprise has been privatized by now. Via EEHC, the Egyptian government still controls 90 % of all electricity production and is maintaining its monopoly on transmission and distribution. Until today three privately operated power plants with foreign investors have been built according to the build-own-operate (BOO) principle (Sidi Krir, Suez and Port Said), representing approximately 10 % (2 049 MW) of the current installed generating capacity.<br> |
| − | Within the context of the new energy strategy and the ambitious renewable energy targets, recently, there has been some effort to create a more competitive electricity market in order to attract investors from the private<br>sector. The draft of the new Electricity Law, which is currently in the process of ratification by the People’s Assembly, is supposed to establish a liberalised electricity market, regulated by the Egyptian Electric Utility and Consumer Protection Regulatory Agency EEUCPRA. Article 20 – 22 of the draft law addresses the replacement of the current Single Buyer Model and allows for third party access to the electricity grid. The access to the electricity grids will be based on published tariffs and longterm electricity purchase agreements. Moreover, the government states that it plans to remove all energy subsidies by 2017.<br> | + | Within the context of the new energy strategy and the ambitious renewable energy targets, recently, there has been some effort to create a more competitive electricity market in order to attract investors from the private<br>sector. The draft of the new Electricity Law, which is currently in the process of ratification by the People’s Assembly, is supposed to establish a liberalised electricity market, regulated by the Egyptian Electric Utility and Consumer Protection Regulatory Agency EEUCPRA. Article 20 – 22 of the draft law addresses the replacement of the current Single Buyer Model and allows for third party access to the electricity grid. The access to the electricity grids will be based on published tariffs and longterm electricity purchase agreements. Moreover, the government states that it plans to remove all energy subsidies by 2017.<br> |
| − | == Rural Electrification<br> == | + | == Rural Electrification<br> == |
| − | Under the Egyptian government rural electrification programme, a countrywide electrification rate of 99 % was achieved through grid extension projects. As assessed in a study by MEDREC<ref>MEDREC 2004. Mediterranean Renewable Energy Center: MEDREC Report 2004, available at: http://www.medrec.org/en/download/REPORT%20MEDREC%202004_egypt.pdf ; Retrieved on 10.09.2009</ref> in 2004, there have been approximately 121 remote villages and communities which still do not have access to electricity. The Rural Electrification Authority’s target for 2008 was to electrify 327 little settlements, the strengthening of 31 village grids and the refurbishment of 41 further grids.<ref>MoEE 2009. Ministry of Electricity and Energy. http://www.moee.gov.eg; Retrieved on: 02.09.2009</ref><br>For the few remaining remote settlements, the decentralized use of renewable energy resources is under consideration as an alternative to actual grid access. Due to the dispersed nature of both houses and rural communities, in addition to their low demand, the extension of the grid is economically unfeasible. The project MEDREP, a joint project being conducted by NREA, the governorate of North Sinai, the Egyptian environmental authorities, the Rural Electrification Agency (REA) and initiated by the Italian Ministry of Environment in 2004, aims at supplying electricity through photovoltaic to these remote rural communities as well as the utilization of solar thermal energy for heating and cooling purposes in tourist resorts and new villages.<ref>MEDREC 2004</ref><br> | + | Under the Egyptian government rural electrification programme, a countrywide electrification rate of 99 % was achieved through grid extension projects. As assessed in a study by MEDREC<ref>MEDREC 2004. Mediterranean Renewable Energy Center: MEDREC Report 2004, available at: http://www.medrec.org/en/download/REPORT%20MEDREC%202004_egypt.pdf ; Retrieved on 10.09.2009</ref> in 2004, there have been approximately 121 remote villages and communities which still do not have access to electricity. The Rural Electrification Authority’s target for 2008 was to electrify 327 little settlements, the strengthening of 31 village grids and the refurbishment of 41 further grids.<ref>MoEE 2009. Ministry of Electricity and Energy. http://www.moee.gov.eg; Retrieved on: 02.09.2009</ref><br>For the few remaining remote settlements, the decentralized use of renewable energy resources is under consideration as an alternative to actual grid access. Due to the dispersed nature of both houses and rural communities, in addition to their low demand, the extension of the grid is economically unfeasible. The project MEDREP, a joint project being conducted by NREA, the governorate of North Sinai, the Egyptian environmental authorities, the Rural Electrification Agency (REA) and initiated by the Italian Ministry of Environment in 2004, aims at supplying electricity through photovoltaic to these remote rural communities as well as the utilization of solar thermal energy for heating and cooling purposes in tourist resorts and new villages.<ref>MEDREC 2004</ref><br> |
| − | == Market | + | == Market Actors<br> == |
| − | == | + | == Egyptian Ministry of Electricity and Energy == |
| − | + | The first Ministry for Electricity and Energy was established in 1964. The Ministry supervises the Egyptian Electricity Holding Company as well as the New and Renewable Energy Agency (NREA) and the Rural Electrification Authority (REA). Next to supervising all activities related to energy projects, it suggests electricity prices and publishes data and statistics relating to electricity production.<br> | |
| + | |||
| + | == Regulatory authority EEUCPRA<br> == | ||
| + | |||
| + | The Egyptian Electric Utility and Consumer Protection Regulatory Agency (EEUCPRA) was established by decree in 1997 (Decree no. 326 of 1997: »Establishing the electric utility and consumer protection regulatory agency«).The regulatory authority is located in Cairo and came into formal existence in 1998.<br> | ||
| + | |||
| + | The primary task of the regulatory authority is to balance the interests of electricity producers, electricity providers and end users. It is supposed to ensure a reliable longterm supply of electricity while promoting and supervising environmental protection and operational reliability in the energy sector. It is also responsible for licensing the construction and operation of electricity generation, transmission and distribution facilities as well as for electricity trading. One of the authority’s declared objectives is to create an enabling environment for market-based competition within the framework of existing laws and to prevent the formation of commercial monopolies in the energy sector. EEUCPRA's Board of Directors is nominated by the Ministry of Electricity and Energy.<br> | ||
| + | |||
| + | <br> | ||
| + | |||
| + | New and Renewable Energy Authority (NREA)<br> | ||
| + | |||
| + | <br> | ||
| + | |||
| + | The Ministry of Electricity and Energy established the NREA in 1986 for the purpose of bundling activities aiming to promote both renewable sources of energy and energy efficiency. NREA is the operator of all wind power installations in Egypt, including the demonstration projects in Matrouh administrative district (hybrid wind/diesel system) and Hurghada (5.5 MW wind farm), as well as the grid connected Zafarana wind farms on the Gulf of Suez (reaching 425 MW by mid 2009 and still expanding).<br> | ||
| + | |||
| + | With the new general orientation towards private sector involvement, NREA also engages in supporting private investment in wind energy by providing resource assessment, the necessary data for feasibility studies and technical support for potential project developers, and by being the partner in land use agreements.<br> | ||
| + | |||
| + | Moreover, the NREA has a central laboratory for testing and certifying apparatus and equipment for utilizing renewable energy resources. Finally, the NREA offers training and upgrading courses, organises workshops and conducts studies – both on its own and in cooperation with international partner organisations.<br> | ||
| + | |||
| + | <br> | ||
| + | |||
| + | Egyptian Environmental Affairs Agency (EEAA)<br> | ||
== Policy framework, laws and regulations == | == Policy framework, laws and regulations == | ||
Revision as of 13:45, 10 April 2011
Overview
| Arab Republic of Egypt | |||
 |
 | ||
|
Capital |
Cairo (30°2′N 31°13′E) | ||
|
Official language(s) |
Arabic | ||
|
Government |
- | ||
|
President |
- | ||
|
Prime Minister |
Ahmed Shafik | ||
|
Total area |
1,002,450 km2 | ||
|
Population |
79,089,650 (2010 estimate) | ||
|
GDP (nominal) |
$215.845 billion | ||
|
GDP Per capita (nominal) |
$2,758 | ||
|
Currency |
Egyptian pound (EGP) | ||
|
Time zone |
EET (UTC+2) | ||
|
Calling code |
+20 | ||
Energy Market
Overview Energy Market
The primary energy production in Egypt has been steadily rising and in 2006 reached 62 501 ktoe which translates to 2 617 PJ or 726 887 GWh. While natural gas production is rising steadily and export capacities increase, the production of petroleum products is declining. At the same time, demand for petroleum is further increasing, partly caused by high domestic subsidies. Recently, major natural gas resources have been discovered. For the foreseeable future, natural gas is likely to be the primary growth engine of Egypt’s energy sector.
The primary energy production has developed fast in the past; starting from around 8 000 ktoe in 1971, it developed quite linear to the current level. Main growth has been seen in the oil and gas sectors, whereas coal and peat show a more static development on a low level. Shares of renewable energies have not increased to a significant extent and continue to play a minor role in the energy supply structure. Owing to the vast resource base, the energy sector is important for Egypt’s economy and will continue to play a major role in coming years. Egypt is a net exporter of crude oil and natural gas. In addition, it has a strategic position in oil transfer because of its operation of the Suez Canal and Sumed (Suez-Mediterranean) Pipeline, two major routes for the transfer of Persian Gulf oil. In terms of coal and peat, Egypt is a net importer.
Final energy consumption in 2006 added up to 43 072 ktoe (equal to 500 927 GWh or 1 803 PJ).
The Electricity Grid
In 2007 / 2008, the state-owned carrier grid consisted of 39 552 km. The grid is subdivided into six geographical zones, namely Cairo, Canal, Delta, Alexandria and West Delta, Middle Egypt and Upper Egypt. The country’s entire territory is covered.
Medium and low voltage as well as isolated grids are owned and operated by the respective distribution companies. In June 2008, the distribution grid consisted of 142 983 km of medium voltage and 230 187 km of low voltage lines (not including non-energy use).
Since 1998, efforts have been made to interconnect the Egyptian electricity grid internationally. As a result, the five-country interconnection of Egypt’s system with those of Jordan, Syria, Lybia and Turkey has been completed in 2002.[1] Links to the European electricity market have been established through the sub-marine connection between Morocco and Spain (400 KV) and over the connection Syria –Turkey.
In April 2004, the Arab Maghreb countries agreed to repower the national grids of Egypt and Libya in order to upgrade the interconnection.In the fiscal year 2007 / 2008, the Egyptian Electricity Holding Company (EEHC) faced a challenge meeting the unexpectedly high peak demand, reaching 19 738 MW.
Installed Capacity
Between 2003 and 2008, the total installed capacity increased about 24 %, mainly through the added combined cycle and wind power installed capacity.
In June 2008, the total installed capacity reached 22 583 MW, equivalent to a 2.9 % increase compared to the previous year. Of this, conventional steam power stations accounted for 11 571 MW (51.9 %), combined cycle power plants for 6 449 MW (28.9 %), and hydropower stations for 2 842 MW (12.8 %). Wind power plants provide the remaining 305 MW (1.3 %). Since 2002 / 2003, three private-sector electricity utilities have been contributing 2 048 MW of generating capacity (9 % of overall countrywide capacity in 2008) from three gas-fired steam power plants. According to the Ministry of Energy and Electricity’s five year plan from 2005, the installed capacity is to increase to a total of 32 GW by 2010.
Egypt has 35 decentralised power plants (mostly diesel units) that are not connected to the national grid. The combined installed capacities of these plants added up to 258 84 MW in 2007/2008. Approximately, 350 GWh of electricity were supplied to local users including tourist resorts.
Electricity Generation
Egypt is a net exporter of electricity, importing 208 GWh of electricity in 2006, while exporting 557 GWh. Transmission and distribution losses account for approximately 10 % (12 583 GWh) of total electricity produced.
In 2005, losses added up to 16 % of total electricity supply. The main consumer of electricity in Egypt is the residential sector which accounts for 37 % of the total consumption, followed close by the industrial sector (35 %). A future average annual growth in electricity demand of 6.35 % is expected, partly due to rising living standards and very low electricity prices. In order to meet the expected growth in demand, EEHC prepared the 6th five year plan (2008 – 2012). The plan entails adding electricity production capacity of 7 750 MW, while at the same time maximizing the use of combined cycle installations to reach a 37 % share of the total installed capacity in 2011/2012. On 31 January 2009, the government has finalized the follow-up five-year plan from 2012 – 2017 which aims at adding further 10 450 MW generation capacity.
Renewable Energies
In 2006, renewable energy sources reached a share of 12.5 % of total grid-connected electricity production. While 12 925 GWh (12 %) were produced by hydropower installations, wind power contributed another 616 GWh (0.5 %).
Solar Energy
Solar energy use is still in its infancy, however, in 2007, the German company Flagsol GmbH won a tender to build a hybrid solar combined cycle plant with a total gross capacity of 150 MW.7 The solar field is located at Kuraymat and is co-financed by the Global Environmental Facility (GEF) and the Japanese Bank for International Development. Commercial operation is scheduled for mid 2010. Egypt plans to extend the solar capacities with further projects of this kind.[2]
Wind Energy
The current installed wind capacity accounts for 305 MW. Egypt is endowed with abundant wind energy resources, especially in the Suez Gulf zone. After the implementation of several experimental wind farm projects, the Ministry of Electricity and Energy set up an ambitious plan for wind farm development aiming at a total installed capacity of 965 MW in 2011/2012.[3]
Biomass
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Biogas
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Hydro Power
The total installed capacity from hydropower accounted for 2 842 MW in 2008. Hydropower installations include High Dam (2 100 MW), Aswan Dam I (322 MW), Aswan Dam II (270 MW), Esna (86 MW). urrent hydro power projects include the New Hammasi plant with an installed capacity of 4 x 16 MW, which started operations in 2008. For 2014, the commissioning of the New Assuit Barrage hydro electricity plant, with an installed capacity of 32 MW, is projected.
Other renewable Sources
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Electricity Prices
The prices of electricity in Egypt range among the lowest in the world. The prices are fixed by the Egyptian government in a non-transparent manner and apply in equal manner to all regions. Electricity is highly subsidized. Since October 2004, several electricity tariffs were raised, by an average of 8.6 %, for the first time since 1992 and further 5 % increases were set for all electricity customers for each of the following five years. The last increase took place in November 2008. In 2008, the rise summed up to 7.5 %, including an additional 2.5 %-increase caused by high oil prices. While the increase in some segments exceeded 18 %, prices of the first segment of domestic consumption – less than 50 kWh per month, mainly composed of low income families –remained unchanged at 5 Pt (approximately 0.62 €-ct). The highest increase was seen for the residential consumers with a demand of >1000 kWh/ month. The governmental plan was intended to gradually accommodate the electricity prices to the actual cost of the electricity system. However, taking into consideration annual inflation rates exceeding 5 %, these increases may not suffice. The new electricity law is supposed to specify the main principles of price regulation such as the ones mentioned above.
Liberalisation
Article 7 of Law No. 100 dating from 1996 stipulates that local and international investors can obtain concessions for building and operating electricity plants. A new investment law enacted in 1997[4] includes various incentive mechanisms such as state guarantees for investors. At the time of contract negotiations concerning the supply of electricity from privately built power plants in the late 1990s, an initial public offering of stock in all seven of Egypt’s state-owned monopolistic electricity providers was in preparation for the Egyptian stock exchange. However, due to lack of interest among investors, the plan was never implemented. The last significant step of reform took place in 2000, when the Egyptian Electricity Authority was restructured to become the Egyptian Electricity Holding Company (EEHC). That conversion is regarded as a step towards a more entrepreneurial approach because, for example, EEHC is expected to finance future projects from its own budget without governmental intervention. The conversion also included the break-up of formerly vertically integrated utility companies into individual enterprises each of which is now an independent company with its own, autonomous management and separate accounting. EEHC was created as a new approach to the privatization of its subsidiaries, but no part of any state-owned enterprise has been privatized by now. Via EEHC, the Egyptian government still controls 90 % of all electricity production and is maintaining its monopoly on transmission and distribution. Until today three privately operated power plants with foreign investors have been built according to the build-own-operate (BOO) principle (Sidi Krir, Suez and Port Said), representing approximately 10 % (2 049 MW) of the current installed generating capacity.
Within the context of the new energy strategy and the ambitious renewable energy targets, recently, there has been some effort to create a more competitive electricity market in order to attract investors from the private
sector. The draft of the new Electricity Law, which is currently in the process of ratification by the People’s Assembly, is supposed to establish a liberalised electricity market, regulated by the Egyptian Electric Utility and Consumer Protection Regulatory Agency EEUCPRA. Article 20 – 22 of the draft law addresses the replacement of the current Single Buyer Model and allows for third party access to the electricity grid. The access to the electricity grids will be based on published tariffs and longterm electricity purchase agreements. Moreover, the government states that it plans to remove all energy subsidies by 2017.
Rural Electrification
Under the Egyptian government rural electrification programme, a countrywide electrification rate of 99 % was achieved through grid extension projects. As assessed in a study by MEDREC[5] in 2004, there have been approximately 121 remote villages and communities which still do not have access to electricity. The Rural Electrification Authority’s target for 2008 was to electrify 327 little settlements, the strengthening of 31 village grids and the refurbishment of 41 further grids.[6]
For the few remaining remote settlements, the decentralized use of renewable energy resources is under consideration as an alternative to actual grid access. Due to the dispersed nature of both houses and rural communities, in addition to their low demand, the extension of the grid is economically unfeasible. The project MEDREP, a joint project being conducted by NREA, the governorate of North Sinai, the Egyptian environmental authorities, the Rural Electrification Agency (REA) and initiated by the Italian Ministry of Environment in 2004, aims at supplying electricity through photovoltaic to these remote rural communities as well as the utilization of solar thermal energy for heating and cooling purposes in tourist resorts and new villages.[7]
Market Actors
Egyptian Ministry of Electricity and Energy
The first Ministry for Electricity and Energy was established in 1964. The Ministry supervises the Egyptian Electricity Holding Company as well as the New and Renewable Energy Agency (NREA) and the Rural Electrification Authority (REA). Next to supervising all activities related to energy projects, it suggests electricity prices and publishes data and statistics relating to electricity production.
Regulatory authority EEUCPRA
The Egyptian Electric Utility and Consumer Protection Regulatory Agency (EEUCPRA) was established by decree in 1997 (Decree no. 326 of 1997: »Establishing the electric utility and consumer protection regulatory agency«).The regulatory authority is located in Cairo and came into formal existence in 1998.
The primary task of the regulatory authority is to balance the interests of electricity producers, electricity providers and end users. It is supposed to ensure a reliable longterm supply of electricity while promoting and supervising environmental protection and operational reliability in the energy sector. It is also responsible for licensing the construction and operation of electricity generation, transmission and distribution facilities as well as for electricity trading. One of the authority’s declared objectives is to create an enabling environment for market-based competition within the framework of existing laws and to prevent the formation of commercial monopolies in the energy sector. EEUCPRA's Board of Directors is nominated by the Ministry of Electricity and Energy.
New and Renewable Energy Authority (NREA)
The Ministry of Electricity and Energy established the NREA in 1986 for the purpose of bundling activities aiming to promote both renewable sources of energy and energy efficiency. NREA is the operator of all wind power installations in Egypt, including the demonstration projects in Matrouh administrative district (hybrid wind/diesel system) and Hurghada (5.5 MW wind farm), as well as the grid connected Zafarana wind farms on the Gulf of Suez (reaching 425 MW by mid 2009 and still expanding).
With the new general orientation towards private sector involvement, NREA also engages in supporting private investment in wind energy by providing resource assessment, the necessary data for feasibility studies and technical support for potential project developers, and by being the partner in land use agreements.
Moreover, the NREA has a central laboratory for testing and certifying apparatus and equipment for utilizing renewable energy resources. Finally, the NREA offers training and upgrading courses, organises workshops and conducts studies – both on its own and in cooperation with international partner organisations.
Egyptian Environmental Affairs Agency (EEAA)
Policy framework, laws and regulations
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General Energy policy, Energy strategy
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References
- ↑ EIA 2008. Energy Information Administration. Country Analysis Briefs – Egypt.
- ↑ Solar Millenium AG 2008
- ↑ EEHC 2008. Egyptian Electricity Holding Company (EEHC): Annual Report 2007/2008, Cairo 2008
- ↑ Spohn, Hans-Dieter et al. 2009: Egypt – Business Guide (http://www.ghorfa.de/pdf/BusinessGuide_Aegypten.pdf ) Retrieved on 16th October 2009
- ↑ MEDREC 2004. Mediterranean Renewable Energy Center: MEDREC Report 2004, available at: http://www.medrec.org/en/download/REPORT%20MEDREC%202004_egypt.pdf ; Retrieved on 10.09.2009
- ↑ MoEE 2009. Ministry of Electricity and Energy. http://www.moee.gov.eg; Retrieved on: 02.09.2009
- ↑ MEDREC 2004
