Germany

Germany

Five countries asked to tender wind aid

Egypt at long last seems to be making progress with its much vaunted plans to install 600 MW of wind power by 2005. In the first stage of a two part program, the Egyptian government is asking five countries to each undertake a 60 MW wind farm. To date Denmark and Germany have accepted the invitation while the Netherlands is conducting feasibility studies before making its commitment. Spain is also considering the Egyptian offer and Canada and Japan are said to have been approached too.

Egypt has long been the recipient of Danish overseas aid in the wind sector, but little has been achieved beyond the construction of a 5 MW pilot project and an impressive Wind Technology Centre, both at Hurghada on the Red Sea coast. Plans mooted in the early part of the decade for a 60 MW wind farm north of Hurghada at Zafarana failed to progress beyond the selection of a short list of four Danish companies (Windpower Monthly, April 1996). German efforts to build a 20 MW project at Zafarana have also yet to materialise in installed kilowatts. Discussions over the terms of aid packages to Egypt seem to have been the reason for the lack of progress.

Two timEs 300 MWResponsibility for realising the 600 MW target lies with the New and Renewable Energy Agency (NREA), a division of the ministry of energy, set up in 1986 in Egypt's first rush of enthusiasm for wind. The 600 MW is intended to meet 5% of the country's electricity needs. Domestic demand is increasing by 5-6% annually and the government also has an eye to substantially increasing electricity exports to neighbouring countries.

NREA is splitting the 600 MW target into two 300 MW tranches, starting with a series of five, 60 MW wind plants. The first tranche is to gain practical experience with different sorts of wind technology. The second tranche will apparently be put up for international tender in 2000, although it is not clear at present whether the tender will be for the whole amount or for smaller contracts. Word is that the Egyptians have earmarked this phase for a Build-Operate-Transfer approach.

Denmark has reacted to the new invitation by granting more aid, this time in the form of a "supplementary" grant of DKK 52 million to "support a project which is to demonstrate the productive and economic potential of large wind turbine plants near the Suez Gulf in Egypt." Denmark earlier donated DKK 210 million to building a wind farm at Zafarana, but local costs and costs associated with technology transfer to Egypt are considerably higher than estimated, according to aid agency Danida. This is the reason for the extra grant to cover the current project phase, to last five years, from 1998-2002, adds Danida.

Germany's role

As one of the five countries taking part in the 600 MW wind aid program, Germany is taking a three step approach to its 60 MW contribution, all of which is aimed at utilising the wind resource at Zafarana. Planning of the first 20 MW, being financed by the Kreditanstalt für Wiederaufbau (KfW), Germany's development bank, is underway. A request for proposals for turbines was issued on June 23 with a September 22 deadline. KfW expects construction to start next year. Feasibility studies have been completed, Decon of Bad Homburg has been chosen as project consultant after a competitive tender, and negotiations between the Egyptian and German governments over the loan are complete.

The tender specifies 500-600 kW machines and includes an obligation for the manufacturer to supply a three year guarantee and training for local technicians. The KfW is supplying credit of DEM 65 million for this stage, of which about DEM 15 million is to be spent on a transformer station for a new 220 kV overhead line stretching as far as Suez. The other wind turbines to be built in the Zafarana area will also feed into this line.

The second 20 MW step is moving ahead with a pre-feasibility study, says KfW. The third stage, however, is no more than a distant prospect. Progress on the Zafarana wind farm has been slow, admits KfW, but this has been due to the care taken in the planning and preparation stages. Swifter progress is difficult, if not impossible.

According to the KfW, only countries prepared to make a significant aid commitment to Egypt's wind program will have the opportunity of installing turbines at Zafarana. The lower limit is apparently 60 MW and NREA will direct smaller projects to other areas of Egypt. One of the projects being discussed between Egypt and the Netherlands possibly falls into this category, says KfW.

Dutch foothold

The Netherlands Energy Research Centre (ECN) has joined forces with three Dutch wind turbine manufacturers, Lagerwey, NedWind and Windmaster, to begin feasibility studies for two major wind farms in Egypt. According to ECN, Zafarana has been earmarked for a 60 MW project, while East Oweinat in the south west is being considered for a further wind plant of an as yet unspecified capacity.

Zafarana has been the focus of Egyptian wind plans for a number of years. Average wind speeds of 10 m/s, a recently completed substation, and a 40 kilometre link to Egypt's main electricity grid, make the location a prime wind farm site in a country with one of the best wind resources in the world. The East Oweinat region was recently designated an economic development zone following the discovery of underground water reserves.

ECN project leader, Theo de Lange, is optimistic about the technical feasibility of the project and does not doubt the political will behind the latest initiative. He feels, however, that the political goodwill is unlikely to be backed by any financial support. The Danish and German involvement is being funded through "soft-loan" constructions, he says, and he hopes the Dutch will be able to arrange a similar construction even though Egypt is not among the countries officially recognised as a recipient of Dutch overseas aid.

The Dutch feasibility studies are being conducted in three phases. The first covering legal and tax issues; the second, the technical aspects of the project; the third, questions of finance and organisation. They cover both the nominated sites and are being partly financed by government agency Senter under the auspices of the Program for Economic Co-operation (PESP). The project has also received the support of the Dutch ambassador to Cairo and the Ministries of Foreign and Economic Affairs. Given a favourable outcome, construction should be able to begin early in 1999, ECN believes.

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