The electricity and renewable energy sector has attracted Arab and foreign companies to invest in Egypt after providing promising opportunities and legislations necessary to complete the projects.
Daily News Egypt interviewed the Minister of Electricity Mohamed Shaker to discuss the investment opportunities available in the sector, and the challenges facing investors, along with the projects that are being implemented, the transcript for which is below, lightly edited for clarity:
Shaker said that 3,250 MW will be added in the coming two years to the national electricity grid. This includes 1,950 MW from the South Helwan power plant (95% completed), 650 MW from Assiut (35% completed), and 650 MW from West Cairo, which is 30% completed.
He explained that they are preparing to implement projects to produce 13,200 MW with investments of $28.3bn, which includes the Dabaa nuclear power plant, with an output of 4,800 MW at a cost of $21.3bn.
Moreover, the plan includes 6,000 MW from the Hamrawein coal-fired power plant, which is estimated to cost $4.4bn, and the pumped-storage hydroelectricity plant that will produce 2,400 MW, at a cost of $2.6bn.
The 5-year-plan 2022/27 also includes the Oyoun Mousa coal plant with a capacity of 2,640 MW on a build operate own (BOO) scheme, and another combined cycle plant in Luxor of 2,250 MW.
Shaker said that the Pumped-storage hydroelectricity projects under study includes one in North Luxor of 2,000 MW at a cost of $2.4bn and another in Armant, Qena with a capacity of 2,000 MW and a cost of $2.5bn.
He added that he is in contact with international financial institutions to provide funding for the detailed field studies of the sites of North Luxor and Armant.
As a supplement to ensure the electrical nutrition and to avoid blackouts, they contracted with Siemens to build three combined cycle power plants in Burullus, Beni Suef, and the New Administrative Capital, with a collective output of 14,400 MW and investments of €6bn, he explained.
The stations are built on 535 feddan and will save $1.3bn of fuel consumption, if they are used to generate electricity to feed in the main load of the unified electric grid.
Shaker said that the cost of raising the efficiency of the stations and converting them from the simple cycle to combined cycle reached EGP 30bn. The stations under development includes the Shabab plant of 500 MW, West Damietta of 250 MW, Sixth of October of 340 MW, Assiut of 500 MW, and the West Damietta expansion of 250 MW.
The renewable energy is Egypt’s future, where the expected electrical capacity of production from solar power plants and wind farms in the Gulf of Suez and West of the Nile, East Nile, Benban., and Kom Ombo amount to 90,000 MW, he pointed out.
The minister said that the sector’s strategy in new and renewable energies aims to boost the contribution of renewable energy to 20% of the total electricity generated by 2022, through four contractual systems: public tenders, competitive bids, feed-in tariff, and a BOO scheme.
He added that they are studying a number of projects with foreign companies to generate renewable energy of 3,500 MW on a BOO scheme.
The largest solar project in Benban in Aswan is being implemented within the feed-in tariff system to output 1,465 MW. The projects are being implemented by 32 Arab, and foreign companies. to produce 10,000 MW, remarked the minister.
He added that these projects will provide the requirements of comprehensive development and provide opportunities for investment in Aswan, as well as many direct and indirect employment opportunities.
Shaker said that Egemac has completed the establishment of four transformers substations in Benban, Aswan, with a voltage of 22/22/220 kV, to transfer the power produced from solar power plants at a cost of EGP 2.7bn.
The total capacity produced from the wind farms in Zaafarana and the Gabal El-Zeit area reached 1,005 MW, including 460 MW added in 2014, and the wind farm in Gabal El-Zeit of 120 MW will be completed before the end of this year, he highlighted.
“We are proceeding in the contracting procedures for the establishment of wind farms of 1,800 MW,” he added.
Shaker pointed out that the total capacity produced from hydropower reached 2,832 MW. “To maximise benefit from hydroelectric power, the Ministry of Electricity, together with a German company, conducted a study that concluded the possibility of generating capacities ranging from 100-150 MW from the micro hydroelectric power plants,” he elaborated.
In addition, he said that another part of the ministry’s plan is to upgrade the electricity power plants in order to meet the development of the national electricity grid and enhance it to work on a high 500-220 kV.
About 2,673 km have been added to the high voltage 500 kV network between 2014 and 2018, which is almost equal to the length of the network that has been established in the 1960s.
The lengths of the high voltage 500 kV networks will reach 5,454 km by the end of next year.
Shaker explained that this leaves 720 km from the 2025 network plan, which is unloading the capacity of the coal-fired power plant, and the Dabaa nuclear plant, in addition to the growing loads.
He noted that 11 500 kV transformer substations will be completed in the first quarter next year at a cost of EGP 11.2bn. Another set of 10 stations are being prepared with total capacity of 14,000 MVA at an estimated cost of EGP 9.2bn.
Shaker said that work is being done on the establishment of six control centres, including the National Control Centre, Regional Cairo Control Centre, Exchange Control in Abbasia, Regional Alexandria Control Centre, West Cairo Regional Control Centre, and the Canal Regional Control Centre.
Another control centre will be also established in the New Administrative Capital in cooperation with State Grid, He noted.
The Ministry of Electricity sets the principle of raising the efficiency of the services provided to the public as a top priority, where it is expanding in the establishment of distribution networks, and reorganising them to match the increasing capacities, which costs EGP 22.5bn, to be completed next year.
In order to overcome the problems of collecting electricity bills resulting from human errors, the ministry is also expanding the installation of pre-paid, and smart metres.
Shaker explained that 5.9m pre-paid metres have been installed, while 250,000 smart metres will be installed by the first quarter of 2019.
The partial operation of the electricity interconnection project with Saudi Arabia to exchange 3,000 MW will be in September 2021, and full operation in September 2022, due to some adjustments in the route of lines to match the blueprints of Neom city, added Shaker.
The project is also being implemented with Sudan of 300 MW, that may be increased to 600 MW in the future. The project is expected to be completed before the end of this year. Egypt will bear only EGP 1bn of the project’s costs.
He said that the agreement on the electricity interconnection project between Egypt, Cyprus and Greece is underway to exchange 2,000 MW. The Euro Africa company officials proposed beginning the project in November and extending it over 36 months.
He added that he is studying increasing the capacity of the electric link between Egypt and Jordan to reach 3,000 MW, up from 450 MW, to enhance linkage and possibly transfer energy to Syria, Lebanon, and Iraq.
He noted that the annex of the interconnection project with Jordan has been signed for the purchase of at least 10 GWh per month on a Take or Pay scheme.