Minister of Electricity and Renewable Energy Mohamed Shaker announced that energy subsidies will be zero by fiscal year (FY) 2020/2021, a change from previous plans that were meant to terminate the subsidies by 2019.
This came during a monthly meeting at the American Chamber of Commerce in Egypt (AmCham) on Sunday under the title “Future Energy and Electricity and Energy Strategy in Egypt.”
The new increase in electricity prices is to be implemented in July. Shaker said, “I did not lie when I said that there will be an increase with the beginning of each fiscal year.”
Shaker revealed that negotiations are underway to sign an agreement for electrical interconnection with Sudan with an output of about 250 MW. “We are negotiating on another interconnection with Cyprus of about 200 MW”, he said.
There is an agreement with Jordan and another one with Saudi Arabia exceeding 2,000 MW, Shaker said.
According to Shaker, in July, a change in feed-in tariff rates will be announced to encourage consumers to build solar power generators and inject the production into the national grid at reasonable prices.
As for the Dabaa project and the agreement with Russia, the minister said that Egypt chose to contract with Russia to build nuclear plants in Dabaa based on technical, not political, factors.
The Russian contract is the best in terms of financing and safety at the station are among the highest international safety levels, the minister said. He pointed out that France, the US, and South Korea all competed to construct the nuclear plant.
As for financing the project, Shaker explained that Russia is funding 85% of the project, while Egypt will only cover 15% and “Egypt’s share will be in Egyptian pounds, but we are waiting for the Russian side to submit its funding proposals.”
Concerning the capacity of electricity, Shaker said, “the addition of 25,000 MW to the electricity grid, which began in 2014, is scheduled to be completed by the end of this year.”
“The deficit in the electricity network reached its highest level, 6,050 MW, in 2014, when the capacity of the network was 21,550 MW. In 2015, the deficit ended after expanding the capacity of the network to 29,500 MW. The capacity of the network increased to 36,900 MW in 2017. No more outages will be seen,” said Shaker.
On this subject, Shaker pointed out that the capacity of the main power network was lifted through the establishment of a number of power stations, including stations in west Assiut, Hurghada, Sharm El-Sheikh, Port Said, Ataqa, and Mahmudiya.
In addition, the ministry relies on mobile networks, specifically in Upper Egypt, Shaker explained, adding that they are cooperating with Siemens to build three advanced power plants, which are energy efficient, to generate electricity worth $1.3bn annually.
With regard to the power station at the New Administrative Capital, Shaker explained, “the station is the largest power plant of its kind in the world, where the plant relies on cooling by air rather than water, unlike conventional power plants. It has a total capacity of 4,800 MW and its construction will end during the current year.”
In the case of electric cars, the minister of electricity explained that he discussed the idea of launching electric cars in the Egyptian market with President Abdel-Fattah Al-Sisi, who initially accepted the idea, and is currently considering the establishment of charging stations for electric cas at 100 petrol stations.
Shaker stressed that the Al-Sisi continues to implement major projects on a daily basis and follows up about the work programme and progress. “Al-Sisi asked me to resolve the electricity crisis before mid-2015 and we succeeded in the task,” he said.
In this context, he explained that the doubling of the electrical power generated in about three years and the installation of 93 turbines is an unprecedented feat in the world.
Shaker noted that the number of workers who work daily on the projects of one company (Siemens) are about 25,000, Many times, he added, equipment was transferred by aircraft for various projects in order to save time.
He added that there is evidence of the magnitude of the work being done in various fields related to energy production, transmission, and distribution, and the national desire to accomplish as soon as possible.
Challenges of the sector
The minister reviewed the challenges faced by the sector after January 2011, which reached the point of a continuous shortage of energy production, sometimes as low as 25%, especially in the summer months, with a shortage of fuel needed for stations, lack of funding, terrorist sabotage, and frequent disruptions, which often reached two to three hours on some days.
This was especially prevalent in Upper Egypt and the countryside, but all this ended in June 2015 and Egypt began to achieve a surplus of energy and plans to be a source of electricity to neighbouring countries and others soon, Shaker said.
“The next stage is the stage of quality of electricity so that the power is not interrupted or does not fluctuate so as not to affect the devices,” he said.
Shaker said that the first version of the renewable energy tariff model for companies did not succeed, but after the improvement and issuance of a second version, 33 companies were attracted to work in the field and have already signed contracts. The agreements are worth $450m to develop 2,000 kilometres of the national network, to be completed within two years.
“New towers are being built on both sides of the Nile to transfer the high pressure, each weighing 400 tonnes. We are also constructing 20 control centres at the highest standards, to be finished in one year. It will not take more than five minutes to solve any problem and the experts at the centres will be of high expertise,” he added
Shaker said, during his lecture at the seminar, that 5m prepaid electricity metres are already completed and 11.3m LED lamps have already been distributed and lighting will be changed at 3.9m street lighting points across Egypt.
The new increase in electricity prices is to be implemented in July
Negotiations are underway to sign an agreement for electrical interconnection with Sudan and Cyprus of about 200 MW with an output of about 450 MW
The first version of the renewable energy tariff model for companies did not succeed, but after the issuance of a second version, 33 companies were attracted to work in the field
Al-Sisi asked me to resolve the electricity crisis before mid-2015 and we succeeded in the task