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Egypt

Egypt

Big call for proposals coming this year -- Egypt picking up the pace

To improve security of supply and maximise oil and gas exports, Egypt aims to generate 20% of its electricity from renewables by 2020, up from less than 1% today. Of this, wind is expected to meet 12%, requiring 7.2 GW and a build rate of 600 MW a year. The government is to call for 2.5 GW of wind power this year, to be built on a build-own-operate basis by the private sector.

Egyptian wind power today amounts to just 365 MW, following a mini spurt in 2008 with the addition of 135 MW of Spanish Gamesa 850 kW turbines to the existing Zafarana complex on the Red Sea coast (table). In the next two years, total new capacity will amount to just 185 MW added at Zafarana, 65 MW in 2009 and 120 MW more in 2010, all of it under turnkey contracts with Gamesa's wind project division. When complete, the Zafarana project, which was launched in the 1990s by the New and Renewable Energy Authority (NREA), a division of Egypt's energy ministry, is to reach 600 MW. So far, 360 MW is turning, built with financial and technical assistance from Spain, Germany, Denmark and Japan. The remaining 5 MW of grid-connected wind power in Egypt is at a nearby test facility at Hurghada, also from the 1990s.

To speed up development, the government is in the throes of creating a competitive electricity market in which private sector investors can participate. A long- awaited law is supposedly going to parliament this session, which will allow third party access to the grid and long term power purchase agreements. The government also says it wants to remove all energy subsidies by 2017. Even before the law is in place, NREA is preparing its call for proposals for 2.5 GW of wind. The first prequalification round should take place this year.

The exact locations for the wind plant have yet to be decided, but most likely are around Saidi, in the Nile valley south of Cairo, and on the Gulf of Suez. Here, at Gabal El-Zeit, NREA has already designated 700 square kilometres as suitable for up to 4 GW of wind power; average annual wind speeds reach over 11 m/s, with a capacity factor of nearly 70%, it claims.

Various projects are being developed, including 200 MW in cooperation with the German development bank, KfW, and the European Investment Bank, and 220 MW with Japanese help. A number of private companies have also expressed interest in building large-scale wind plant at Gabal El-Zeit. Among them, Italy's Italcementi signed a memorandum of understanding with the Egyptian government in 2006 to install 120 MW, with the possibility of expanding it to 400 MW. The output would partly feed Italcementi's cement factories in the Suez zone. Global energy company BP, however, has decided not to pursue its proposal for 500-1000 MW of wind power in Egypt, preferring to concentrate on the US market.

South of Suez, near the Red Sea port of Ain El Sokhna, El Sewedy Cables, a global cable and electric products manufacturer, should start producing turbine towers this year in a 50-50 joint venture with German tower manufacturer SIAG. The facility is part of El Sewedy's broader strategy to assemble and later manufacture turbines in Egypt. Last year, the company bought a 30% stake in M Torres Olvega, a small Spanish company producing direct-drive wind turbines.

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