With power outages encompassing nearly half of Cairo residents on May 23, more scheduled cuts are expected over the first week in June. The US Embassy announced, “The South Cairo Power Plant is having trouble generating enough electricity to meet the demand, reportedly due to a shortage of natural gas used to run the steam turbines.” As a result, rolling electrical blackouts within various neighborhoods are expected to last from May 31-June 6.
Opportunities exist in Egypt to combat the natural gas shortage, and a variety of companies are meeting to look for prospects to propel the country’s energy sector as well as maintaining a firm footing within Egypt. One option could be to follow in the footsteps of Uganda and Tanzania, forging contracts for emergency power generators supplied from companies like Aggreko. Tanzania signed a $37-million contract with the UK firm to supply 100 MW of emergency power for 12 months. The company built three plants beginning in 2005, worth about $666 million, but extensions forced the price Uganda paid for emergency power to skyrocket. Egypt faces opposition every time it attempts to end fuel subsidies, and the country is currently too unstable to tackle a situation like the one in Uganda.
Other companies that could be at an advantage are wind turbine suppliers like those already established within the North African country: Gamesa, SIAG, Siemens, and GE. In mid-November, Egypt’s Minister of Energy Hassan Younes announced a new tender for the installation of wind farms on the Gulf of Suez, totaling 1,000 MW. The first phase was awarded in June, but with the latest power crisis, it would seem plausible that the government might push up the bid process for the remaining two phases.
This could also provide more local content with companies like Orascom and its solar ventures (including Egypt’s first ISCC plant, Kurymat) as well as the JV created between Germany’s SIAG and Egypt’s El Sewedy, SWEG, manufacturing wind turbines. There is also the possibility that more grassroots efforts could result like the Solar House Complex project.
Egypt planned to meet 20% of its total energy demands via renewable energy resources by 2020, but many had doubts as to this being a realistic goal. Jayesh Goyal, Areva Solar’s VP of global sales, told Alternative Energy Africa that energy demand was the driving force behind renewable energy projects. He compared the US to African nations saying that the North American superpower did not have the underlying energy demand, but North Africa has a “tremendous demand and need to reduce foreign imports.” The opposite is true for Egypt, with over 95% of its population having access to the national grid (as opposed to the most populated African country, Nigeria, with less than 40% of its population with access to reliable electricity).
Egypt has a plethora of hydrocarbons which underlies the rapid expansion of renewable energy compared to other African counterparts. With the recent power outages, it would appear that the country’s Energy Ministry is actively – or should be – working to meet energy demand with sustainable resources, and relying heavily on its natural gas seems to be faulty maneuver.
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