Egypt as A regional technology test centre
Wind power capacity in Egypt now stands at 310 MW after the recent commissioning of 80 MW at Zafarana on the Red Sea coast (table). This is the latest phase of a huge development managed by the New and Renewable Energy Authority (NREA), a division of Egypt's energy ministry, planning of which began in the mid-1990s. The first turbines were installed over a decade ago. NREA foresees up to 600 MW spread over an area of 80 square kilometres. Of this, 305 MW is up and running, built with financial and technical assistance from Denmark, Germany and Spain. The remaining 5 MW of grid-connected wind power belongs to a pilot project at nearby Hurghada.
Zafarana, however, is just the beginning. The government's energy strategy is focused on security of supply and maximising its oil and gas exports. Renewables have a big role to play. The aim is for them to provide 20% of electricity by 2020, excluding large hydro production, up from just 0.3% today. Of the estimated 10 GW of total renewable energy capacity required by 2020, wind power will be called on for around 7.2 GW, which means installing over 600 MW a year.
The latest extension at Zafarana consists of 94, 850 kW turbines supplied by Spanish Gamesa. The company has also been selected to build the next two 120 MW phases, due on line in mid-2009 and early 2010, this time with Danish and Japanese assistance. The entire Egyptian electricity sector is highly subsidised and electricity from the Zafarana wind plant, also built with capital subsidies, receives the flat rate paid by the transmission company of just EGP 0.12/kWh (EUR 0.015).
Times are changing, however. Now that Egypt is rated as a middle-income country by the OECD, it will no longer be eligible for grants to help fund development. The government is working towards creation of a commercial market for electricity supply, also from wind power, in which private sector players can participate. To make renewables investment in Egypt attractive, it is also counting on revenue flowing to wind plant owners from the sale of carbon emissions certificates (CERs).
A law to allow third-party access to the grid and long term power purchase agreements is on its way. The law will also provide for priority access to the grid for renewables and priority dispatching when possible, technical support and rules for purchase of electricity from autonomous producers that is excess to their needs.
The first private sector projects are destined for Gabal El-Zeit, south of Zafarana on the Gulf of Suez, where the best sites record average annual wind speeds of over 11 m/s. Theoretical capacity factors close on 70% are reported as achievable. NREA has designated 700 square kilometres as suitable for the development of 3000-4000 MW of wind power. Among several companies bidding for the generation and distribution licences for these projects are BP, for a possible 500-1000 MW, and Italgen, a subsidiary of Italy's Italcementi.
Back in November, Italgen signed an initial memorandum of understanding with the Egyptian energy ministry to carry out a detailed feasibility study for 120-400 MW at Gabal El-Zeit. Wind measurements and the environmental impact assessment are now well under way and Italgen hopes to launch the project mid-2009, according to CEO Giuseppe De Benti. The company will feed some of the output to its local cement factories and use the CERs to offset its emissions.
Other studies in the area are for a 200 MW project with assistance from the German overseas development bank, KfW, and the European Investment Bank, and a 220 MW development in co-operation with Japan.
Whether Egypt's target for renewable energy is attainable or not, there is no denying it is way ahead of its neighbours in its green ambitions. The country is even setting itself up as something of a renewable energy hub for the Middle East and North Africa. With this in mind, the government recently established a Regional Centre of Excellence for Renewable Energy and Energy Efficiency in Cairo, with support from the European Investment Bank, the German Agency for Technical Cooperation and the Danish International Development Agency. In addition to conducting research, the centre will provide consultancy services, promote technology transfer and run training programs. A wind turbine research and test centre is already sitting in the desert near Hurghada, built with Danish government aid ten years ago.