WindEnergyinEgypt

MohamedSalah Elsobki (Jr.)

EnergyEfficiencyandRenewableEnergiesManager
IndustrialModernizationProgramme
AdjunctProfessor FacultyofEngineering
CairoUniversity Egypt
 WindEnergyinEgypt
AnoverviewoftheenergysectorinEgypt.
Anoverviewof thewindenergysectorinEgypt.
Pastandcurrent
ImmediateandnearfuturePlans
Addressingissuessuchasthenationalpolicy/legislative
frameworkthathasbeenputinplacetosupportthe
developmentofthemarket;thepotentialforgrowth;
The winwin opportunitiesfor:
Business/manufacturersand
Alsofromanenvironmentalpointofview;
ChallengesthatEgyptmightbefacing in thisparticular
sector.
Anoverviewoftheenergysectorin
Egypt
Anationalenergytargetwere
declaredbytheendof2007;
stating:
Diversityofenergyresources
Confirmingthecontinuationof
activitiestowardsliberalization
ofenergymarkets Development
Settingtargetsfortheenergy &Energy
mix;includingrenewable,
energy efficiency andnuclear
 CurrentEnergySituationinEgypt
Bytheendof2007 twoboundingforecastsforanational
energysupply/demandscenarios weredeveloped.
Thescenarioswerebasedon:
Anoverallaverage7%annualdevelopmentrate.
Astartingenergysupplymixofaround2007/08:
94% fromfossilfuelandNG
5% hydro
1% fromwindandothers
Expected/TargetedFutureEnergyStatus up2022(conservative)

Byyear2022 othernationalresourcesbecomeavailable:
Thefirstscenariowasbasedon:
Supply of fossil based energy production will remain at the
same level.
Windenergygrows,leadingtoabout20%contributionto
electricitygenerationfromrenewable(hydroandwind).
Nuclearenergywouldcontributeabout6%.
Theenergysupplymixaround2021/2022becomes:
40%from(20%fossilfueland20%NG)
8%fromenergyefficiencyimplementations
9%fromrenewable(2%hydroand7%wind)
6%fromnuclear
%37additionalenergyisneeded
Expected/TargetedFutureEnergyStatus up2022(conservative)

160

140
Reduceenergyconsumptionby 12 7
13 5

8,3% 12 0
113
120 10 7
Nuclearup40005000MW 95
10 1

100 90
85
80
75
80 Renewable
63
current3000MW
67
71

andtarget13500MW(energyup
56
60

60
20%)
40
RetainOilandNG
levelsofproduction t ogetf r om else
20
n ergyneede d
A dditional e
la r &ot hers)
0
where(so
2006/ 07 2007/ 08 2008/ 09 2009/ 10 2010/ 11 2011/ 12 2012/ 13 2013/ 14 2014/ 15 2015/ 16 2016/ 17 2017/ 18 2018/ 19 2019/ 20 2020/ 21 2021/ 22

Fr om f uel pr oducts Fr om N.G. Fr om Hydr o Fr om Wind

Fr om Nuclear Local ener gy needs Local ener gy needs wit h ener gy ef f . Addit oi nal needed ener gy
Expected/TargetedFutureEnergyStatusup2022
(ambitious)

Byyear2022othernationalresourcesbecomesavailable:
Thesecondscenariowasbasedon:
Supply of Oil based energy production will remain at the
same level, NG supply will grow at an annual 5% rate.
Windenergygrows,leadingtoabout20%contributionfrom
renewable(hydroandwind).
Nuclearenergywouldcontributeabout6%.
Theenergysupplymixaround2021/2022becomes:
61 %from(20%fossilfueland41%NG)
8%fromenergyefficiencyimplementations
9%fromrenewable(2%hydroand7%wind)
6%fromnuclear
Only15%additionalenergyisneeded
 Expected/TargetedFutureEnergyStatusup2022
(ambitious)
160
RetainOilandimproveon 135
140 127
NGlevelsofproduction 120
113
120 (5%annually) 101
107
95
90
100 85
Million toe

80
75
71
80 67
60 63
56
60

40
Stillneedadditionalenergytoget
fromelsewhere
20

0
7

2
/0

/0

/0

/1

/1

/1

/1

/1

/1

/1

/1

/1

/1

/2

/2

/2
06

07

08

09

10

11

12

13

14

15

16

17

18

19

20

21
20

20

20

20

20

20

20

20

20

20

20

20

20

20

20

20
From fuel products From N.G. From Hydro
From Wind From Nuclear Local energy needs
Local energy needs w ith energy eff. Additional needed energy
 WindEnergyinEgypt
AnoverviewoftheenergysectorinEgypt.
Anoverviewof thewindenergysectorinEgypt.
Pastandcurrent
ImmediateandnearfuturePlans
Addressingissuessuchasthenationalpolicy/legislative
frameworkthathasbeenputinplacetosupportthe
developmentofthemarket;thepotentialforgrowth;
The winwin opportunitiesfor:
Business/manufacturersand
Alsofromanenvironmentalpointofview;
ChallengesthatEgyptmightbefacing in thisparticular
sector.
WindEnergyinEgypt
 ISP
MOEE/EEHC

Generation
Trans Co(s) Dis
Trans Co(s) MV & LV
Co.(s) Co(s)
Customers

Gov. PP

Private
BOOT(s) Distributor
HV Exports
UHV MV
Customers & Imports
Customers Customers

Target Market
LV
customers
ISP Current phase one
 WindEnergyinEgypt
AnoverviewoftheenergysectorinEgypt.
Anoverviewof thewindenergysectorinEgypt.
Pastandcurrent
ImmediateandnearfuturePlans
Addressingissuessuchasthenationalpolicy/legislative
frameworkthathasbeenputinplacetosupportthe
developmentofthemarket;thepotentialforgrowth;
The winwin opportunitiesfor:
Business/manufacturersand
Alsofromanenvironmentalpointofview;
ChallengesthatEgyptmightbefacing in thisparticular
sector.
EGYPT'SWINDENERGYPROJECTS
 RenewableEnergyAuthority

PrivateSector Withtotalshareabout63%

MW
700

600

500 200 200 200 200 200 200 200 200

200

400 200 200

300
200
300 300 380 400
200 400 400 400 400 400 400 400
200
100

0
0 5
201 011 201
3

0
12 13 14 016 017 018 019 020 021
9

01

01

01

01

01

01

01

02
/ 0 0 0 /
00

01

01

01

09 0/2 /2 /2 /2 14 /2 /2 7/2 /2 /2 /2
1 2 3 20 5 6 8 9 0 Year
201
/2

/2

/2

/2

/2

/2

/2

/2
20 201 201 201 201 201 201 201 201 202
\2

\2

\2

\2
10

11

12

13

14

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21
20

20

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20

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20
 WindEnergyinEgypt
AnoverviewoftheenergysectorinEgypt.
Anoverviewof thewindenergysectorinEgypt.
Pastandcurrent
ImmediateandnearfuturePlans
Addressingissuessuchasthenationalpolicy/legislative
frameworkthathasbeenputinplacetosupportthe
developmentofthemarket;thepotentialforgrowth;
The winwin opportunitiesfor:
Business/manufacturersand
Alsofromanenvironmentalpointofview;
ChallengesthatEgyptmightbefacing in thisparticularsector.
 RenewableEnergyDevelopmentBusinessModels
Item NAREA Competitive Bidding Feed-In-Tariff
Program size 2200 MW 2500 MW 2500 MW

Single Wind Farm Large ten Modules each (250

Size Large (100-400 MW) MW) Medium and Small below 50 MW

Private
Private (focus on local and small and
Developer NAREA (most probably international) medium size developers)

Governmental and soft financing

from international development
finances agencies Commercial finance Commercial finance

Proposed by Egypt era and

approved by the cabinet of proposed by Egypt era and
Tariff Setting ministers According to the bid outcome approved by cabinet of ministers

Long term PPA mostly for 20

Contracting 20 years years 15 -20 years

Off taker Grid Grid or distribution system

O/M NAREA Developer Developer

Construction
Responsibility NAREA through EPC Developer Developer
 ImplementationPlanforRenewableEnergies
Inadditiontothemarketreformwhichguaranteethirdpartyaccess,power
generationfromrenewablesourceswillenjoypriorityindispatching
whenevertheyareavailable.
Theproposedpolicesconsistsoftwophases
Phase1:CompetitiveBids
Accordingtothisapproachthegridwillissuetendersrequesting
supplyingpowerfromrenewableenergiesresources
Thiswillbedonewithinthescopeofthefollowingcriteria:
ControltheincreaseinREcapacitieswithreferencetothe
capacityoftransmissionsystemandcapacityofthemarketto
absorb.
Increaselocalmanufacturing
Increaseprivateinvestment
Achievingthelowestpossibleprices.
Providetheinvestorswithguaranteesthroughlongtermpower
purchaseagreements
 MeasuresAdoptedforRenewableEnergiesintheNew
ElectricityLaw(Contd.)

Phase2(aftertheadoptionoftheNewElectricityLaw)
FeedinTariffwillworkhandinhandwiththecompetitivebids
mechanism.
Internationalexperiencehasshowedthatfeedintariffismore
attractiveforsmallerinvestorslikefarmers,cooperativesandprivate
investors.
Topreventintersectionbetweenthetwomechanismscompetitivebid
willbeforlargesizeinstallations(250MWwindfarm),whilefeedin
tariffwillberestrictedfromsmallcapacities(lessthan50MW
installations).
 RenewableEnergyFund

EstablishmentofREfund:
Thefundcouldcover:
Full/partialdeficitbetweentheREcostandmarketprices
Exchangerateriskincaseoftransferringcostfullorpartiallyto
consumers.
Guaranteeofthetransmissioncompanypayments
Financialsupporttopilotprojects.
ResearchanddevelopmentforRET.
Themainsourcesoffinanceofthefundwillinclude:
Subsidycurrentlygiventothefossilfuelsusedinpower
generation.
StateBudget.
Donations
Investmentofthefundmoney
 Support of Egyptian Government
Central Bank of Egypt will guarantee all financial obligations of EETC under the PAA.

Signing long term PPA (20-25) years.

Reduction of custom duties from 5% TO 2% for all renewable energy equipment and
spare parts .
An area of about 1228.7km2 has already allocated for establishing W.E. projects
Signing usufruct agreement.
All permits for land allocation are already obtained .
The project will benefit from carbon credit .
Preliminary EIA including Bird migration study will be prepared by NREA in cooperation
with international consultant and financed by KfW.
A general Authority for Investment GAFI provides assistance to all investors through
one window operation for obtaining all permits and licenses.
The project company shall get license for power generation from Egyptian Electricity
Regulatory Agency.
 WindEnergyinEgypt
AnoverviewoftheenergysectorinEgypt.
Anoverviewof thewindenergysectorinEgypt.
Pastandcurrent
ImmediateandnearfuturePlans
Addressingissuessuchasthenationalpolicy/legislative
frameworkthathasbeenputinplacetosupportthe
developmentofthemarket;thepotentialforgrowth;
The winwin opportunitiesfor:
Business/manufacturersand
Alsofromanenvironmentalpointofview;
ChallengesthatEgyptmightbefacing in thisparticular
sector.
 LocalManufacturingofREEquipment

AparallelapproachtoincreasingREgenerationcapacityisthelocal
manufacturingofREequipment.Thiswillincreasetheaddedvalueto
theeconomy.
Thisprogramsnecessitates:
Largescaletechnologytransferprogram
Largescaleprogramtosupportresearchanddevelopmentprogram
forREtechnologiessimilartothatconsideredinChinaandIndia.
IncentivestolocalactivitiessupportinglocalizationofREtechnologies
 EGYPTS WELL LOCATED
GEOGRAPHICAL LOCATION
IndustryRegulations
EUAgreement
Nocustoms
imposedon ArabFreeTrade
someREEgyptian Agreement
industriesexports EgyptsRE Nocustoms
fromEgyptto industries imposedon
Europe,whereas REEgyptian
Europeanimports industries
intoEgyptare exportsfrom
subjecttotariffs COMESAAgreement Egypttoall
(limited) Arab
Nocustomsimposed countries
onREEgyptian
industriesexports
Egyptianindustriesenjoysa
numberoftradeagreements fromEgypttoall
betweenEgyptandEurope, Africanmember
Arabcountries,andAfrican
countries countries,whereas
ArabandEuropean
competitorsdonot
enjoythisprivilege
ProposedPolicestoSupportLocalManufacturingof
RenewableEquipment

Policies
toSupportLocal
Manufacturing

Requirementsfor FinancialSupport Weighing

National/
Progressive ToLocally Conditions
International
Increase Manufactured ForBidsorfor
Partnership
InLocalShare Equipment Prequalification
EconomicGrowth
EstimatedTurnOverinEgypt ofEuro10.6Billion (Appx.Egp 80Billion)by2020
(estimationbasedontodaysprices!(Source:RCREEE2009)
Expectedatleast3potentiallocalwindturbinemanufacturers& 10potentiallocal
IPP/developersby2020(Source:currentmarketsituation)
Approximateindirectdevelopmentof30localsubsuppliers&relatedsupporting
industries

CleanEnvironment
With322MWwindenergyinstalledZaafarana saved190,000T.O.Eandreduced
emissionsofabout450,000TCo2in2007(Source:NREAstatistics)
With7200MWwindenergyinstalled,EgyptwouldAppx.save4.25MillionT.O.Eand
reduceemissionsofabout10MillionTCo2(Source:ProjectiononNREAstatistics)

JobCreation
WindenergyinEgyptwouldimpactdirect(e.g.manufacturers,IPP/developeretc)
andindirect(RM,relatedservicesetc)employment
ThewindenergyindustryinEgypt couldparticipateforthecreationof75,000direct
jobs by2020 (Source:RCREEE2009)
 WindEnergyinEgypt
ChallengesthatEgyptmightbefacing in this
particularsector
Financing.
Networkcapacity.
Attractionofinvestors.
 Ministry of ElectricityMOEE/EEHC
and Energy
IPP expansion

Generation Trans. Dis

Co.(s)
TSOco. Co(s)
MV & LV
Customers
RE: Gov PP
& IPP
..

BOOT(s)
HV MV Exports
UHV Customers Customers & Imports
Customers

Independent Merchant Transmission & Distribution

ISP(s) Target market

proposed phase
four
EEUCPRA
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