By Emad El-Din Aysha, PhD
It appears that the renewable energy industry in Egypt previously had been managed in a similar way as other sectors in the country, such as transportation or retail. Analogies with the taxi transportation system may help to draw a clearer image of the conditions for renewables.
Taxis in Cairo use two kinds of electric meters, the older green model with a racing horse that can be tampered with, and the new orange kind from Taiwan. The latter was pre-programed, tamper-proofed and it had to be registered with the central authorities controlling the warranty. This also meant that the repairs were the sole job of the warranty holder. The green ones were exempt from the registration and their warranty was not controlled. The transportation system was lagging behind due to a series of regulatory issues. Similarly, the renewables sector is currently facing difficulties, not of a technical or even an economic nature, but related to the regulatory environment.
An energy expert, who prefers to go unnamed, explains that to create an incentive structure for renewables will not be enough, if smart meters for measuring the consumption are not introduced. The Ministry of Electricity is supposed to issue and register the meters to be able to accurately measure how much power of the national grid was consumed from renewables. But the ministry has been so far been dragging its feet over this measure. This step, in turn, opens up legal issues as consumers may claim that the readings on their meters, which they purchased on the free market, do not match estimates done by the ministry.
In a similar fashion, businessmen in Egypt have filed cases at the constitutional court with regard to sales tax imposed on their enterprise showing that their companies were in fact exempted from this category of taxation. Many won those cases and were compensated, a process that saps money from state coffers.
The Ministry of Finance, the expert adds, had to approve loans for renewables projects, which had been occurring with usual bureaucratic delays. But that was in the past, and currently the situation has changed. In the present, the government has committed itself to generating 20% of the country’s energy from renewables by 2020 and aspires to a loftier goal of energy self-sufficiency by 2022, following the Eni mega gas find.
If the aforementioned regulatory hurdles are removed, will these goals be attainable in principle, on the technological and economic levels? What measures have to be adopted at the policy level in order for such feasible solutions to be taken up and implemented on a national scale by government agencies, the public sector, businesses, and by the common man? What kind of renewable technologies are the most suitable for a country like Egypt? What kind of a mix of renewable, conventional and alternate sources of energy should Egypt shoot for? And what can we learn from comparisons and experience with renewables that other countries have had?
Solar Power: Jewel in the Crown
An energy and petroleum expert, Dr. Magdi Nasrallah, says that an ideal energy mix for Egypt consists of 40% from oil and gas, 20% coal, 20% nuclear, and 20% renewable energy (solar, wind, hydro, biomass, geothermal, etc). Solar power should be the main source of renewable energy, as wind power, while being a cheaper alternative, is not as reliable, and therefore less suitable on the national scale. Wind power is only beneficial at a certain wind speed that Egypt enjoys merely on a narrow strip along the Red Sea coast. Additionally, the ideal wind speed is between 5 to 8 meters per second, as stronger winds may burn turbines and damage blades.
Egypt is strategically located on the world’s solar belt, says Dr. Ehab Abdel-Rahman, a physicist and the Vice Provost for Research at the American University in Cairo. He explains that in pursuing solar power in the country you also must decide what kind of solar power is the most suitable to be utilized on the national scale: Photovoltaic (PV) or Concentrated Solar Power (CSP)?
PV transforms light into electricity directly, whereas CSP focuses solar rays onto a heat-engine to generate electricity through turbines that utilize vaporized water. Great advances have certainly been achieved in recent years, says Nasrallah, specifically in the area of photovoltaic (PV) technology, upping the efficiency level of solar energy from 25% to 50%. PV technology is more reliable and generates more electricity; however, it is also technologically more sophisticated, therefore more costly as the solar cells are made out of rare materials like arsenic and selenide, Abdel-Rahman specifies. PV technology was developed in the North and so works better in cold weather. PV solar cells invariably wear out in a hot climate, as Egypt enjoys. On the other hand, CSP technology is much cheaper and low-tech, based on sand and metal. It relies on focused light reflected off mirrors, and mirrors are sturdier in a hot climate. But what is more important, CSPs can be manufactured locally, while factories that produce PV panels in Egypt still have to import the solar cells and other components from abroad, depriving the country of much needed hard currency. This is not to discount PV technology, Abdel-Rahman says, but it appears to be more of a long-term option.
The existing Feed-in-Tariff (FiT) system may help to fill the gap by introducing long-term fees for electricity generated by renewables. Dr. Mohamed Shaker, Minister of Electricity and Renewable Energy; Dr. Hafez A. El-Salmawy, Managing Director Egyptian Electricity Regulatory Authority; and Dr. Mohamed El Sobki, Executive Chairman of the New and Renewable Energy Authority developed the scheme to reward higher KW electricity producers in an effort to draw in large foreign investors with easy access to the PV, and thus free Egyptian investors from costly high-tech imports. Abdel-Rahman adds that solar power cannot function at the national level without paying attention to national policy considerations.
As Abdel-Rahman explains, the elementary problem with any kind of solar power is its intermittency, as solar radiation levels vary even during the daytime. To store the energy through batteries is too expensive and unreliable to be feasible; therefore, it is better to transmit electricity to the national grid immediately, under a precondition that this will be a smart grid capable of balancing intermittent flow of electricity from the solar power source.
Planning for Scale and Size
A renewables expert and environmental scientist, Dr. Mohamed Bayoumi of the UN Development Program (UNDP), points out that while governments tackle large scale solar projects connected to national grids, non-profit organizations can also contribute by developing small scale, off-grid strategies.
The UNDP specializes in bringing in inexpensive, tried-and-tested technologies such as bio-energy from India, and affordable solar panels for homes and office buildings. In particular, biomass energy can sufficiently fuel households that are currently dependent on butane gas cylinders for cooking and heating water, Bayoumi added.
Small-scale energy projects are also more suitable for smaller, isolated populations, says solar power expert, Ahmed Zakaria. Stand-alone power plants (solar, wind-farms, biomass) are ideal for isolated villages and far-off desert settlements, where the population is too small to garner profits, given the expenses involved in supplying energy for a national grid. They serve as an alternative, a decentralized source of power, which rids the grid off additional pressure. Stand-alone plants have an advantage as they can also hedge against power failures at any renewable facility, leaving conventional power sources to maintain power levels if and when such eventualities occur. In addition, installing solar panels for Egyptian homes and buildings islimited by the size of rooftops. An average size of 120cm by 80cm is needed to generate 100W. But the houses in Egypt are not big enough to provide that, even in the countryside.
An added benefit of the small scale approach is that it creates new jobs and contributes to indigenizing technological knowledge, explains Bayoumi. If there are 1,000 to 3,000 homes with PV panels, a ready-made market for solar technicians, repair and maintenance services emerges, as the existing reality for the Egyptian satellite dish market shows.
Funding for solar power research is the ultimate priority, according to Adel-Rahman, so that nations in the South would then be able to develop their own PV technologies suitable for their climates and resources. In addition, he concludes, two more prerequisites are important in order to successfully implement solar power strategies: specialized training for technicians in the field and a guidelines for quality standards of solar cells imported to Egypt.
In line with this argument, Egyptian solar power and renewables firms raise similar complaints. They say that provincial universities often lack of qualified professors and relevant engineering curricula on solar energy. The companies are thus forced to take on an educational function themselves and train graduates from scratch. They also face logistical problems as they are invariably located in the countryside or desert, which multiplies their expenses for connections to the national grid over long distances. Nonetheless, the companies are optimistic as the number of small and medium-sized Egyptian firms has increased recently and the quality of their production can withstands foreign competition in the sector. True to form, they were also increasingly relying on CSP technology that has been already developed locally with successful applications in the manufacturing sector.
AUC physics professor Dr. Salah Arafa’s experience lends credence to the small-scale approach towards promoting solar energy. Arafa was the first to introduce solar panels to the Egyptian countryside in the village of Basaysa (in the Al-Sharqiya governorate) as far back as 1974. His key contribution was that he demonstrated an indispensable need for the integration of technologies towards local needs and capacities. He showed that technologies needed to be developed side-by-side, and local needs and resources be gauged through an active, participatory dialogue with villagers. “Sustainable Development cannot be achieved without an active participation of all stakeholders,” therefore energy projects have to be based on the grass-roots level. In his opinion, volunteer experts from among students and engineers need to tackle the problems of illiteracy and brain-drain from villages to cities. This necessarily feeds back into the implementation processes of renewable energy as people thus become more receptive to power conservation.
Similarly, a targeted training builds up a pool of technicians with relevant qualification to design and repair locally suitable technologies. As technological solutions developed in field projects tend to emerge gradually, Arafa explains, an integrated approach can help in constructing hybrid energy systems as well. One such technology is to use solar power also for de-salination and water purification purposes. The very first piece of solar technology that Arafa had invented for the village connected a solar panel to a 12V car battery to power a TV set in the evening. The Basaysa model has since gone global, pursued by international aid agencies and developing nations alike, earning him the Man of the Year for Environment and Development honor rewarded by the Society of Writers on Environment and Development in 2009.
Renewable also smooth the path toward offloading population growth into the Desert. Hence Arafa’s contribution in the New Basaysa desert settlement in Sinai, developed through a combination of organic agriculture, bio-gas plants, and solar energy for households. The Basaysa model is now being taken up by non-governmental organizations like Ain El-Bee’ah and Gamiyat Al-Khashaba as well as by renewables companies like Onera Systems, KarmSolar and EFREgreen. They are implementing the model in multiple locations in Egypt stretching from Cairo’s slums to Al-Minya, Sinai, and the Red Sea coast.
Possible Rebounds for Renewables
Renewables energy strategy will need another boost in order to take off in Egypt – a removal of energy subsidies. By increasing the price of conventional fuels through subsidy cuts, the economic viability of renewable projects may likely jump from the current time frame estimated at 15 years to merely 5 years, according to the anonymous expert mentioned above. However, the downside of this measure, he warns, is that it will drive up unemployment, since cheap energy represents a competitive edge for small and medium-sized production facilities in Egypt. He adds that in a comparison with China, the labor force of the Asian country is equally cheap as that in Egypt, but incomparably more skilled, thus the country is successfully siphoning international investments away from Egypt.
While energy subsidies can and should be phased out, in the meantime, it is possible to boost energy efficiency levels and achieve almost the exact savings as subsidy cuts by introducing relevant training of the labor force and providing qualified supervision.
Energy efficiency, moreover, is a critical factor for the renewable projects as well. The problems posed by unqualified workers and equipment failures at conventional power plants may afflict on the production and transmission of energy at renewable facilities as well. Economic incentives for foreign investors seem critical as the Malaysian example shows. According to Reegle, the Clean Energy Info Portal, Malaysia provides import duty exemptions on energy-efficient equipment that is not produced locally, and sales tax exemptions on the purchase of equipment from local manufacturers. The policy means to insure that energy-saving methods are incorporated into renewables projects. However, the expert emphasizes, despite a plethora of economic incentives, foreign investors are likely to pull out of a country, if they find their projects are losing money over carelessness and waste caused by unqualified labor and inefficient facilities.
Making renewables energy efficient multiplies the competitive advantage of this energy source in comparison to conventional sources such as coal. The anonymous expert explains that coal is highly problematic in terms of efficiency, as fluids burn invariably better than solids, because oxygen can penetrate deeper into liquids in the burning process. It is possible to improve the efficiency of burning coal by grinding it up into dust, however, it results in yet more pollution, even with good grades of imported low-sulphur coal. Nevertheless, we should not do away with coal. Instead, as Arafa insists, we should improve the process of filtration of fumes from both high- and low-sulphur coal. An anonymous source adds that the Maghara coal mine in Sinai is not as high-sulphur as many think as the Israelis exploited it amply in the 1960s-70s, giving Egypt another avenue out of a dependency on energy imports.
Although renewable energy projects are a sustainable vision for the future, the centrality of fossil fuels should not be detracted, some experts note. To some degree, renewable sources of energy are dependent on the conventional ones. Wind power, for instance, is an oil-hungry technology, reveals Abdel-Rahman, as 20 gallons of lubricants are needed for every 1.5MW produced by a wind turbine. Wind power plants cannot function without lubricating oil. Wind power thus presumes well-developed petroleum and chemicals industries. It appears that fossil fuels are here to stay, at least for the foreseeable future, the expert says.
A complementary relationship between conventional and renewable sources of energy certainly exists between the oil industry and geothermal energy, the anonymous expert adds. In the course of exploration work, oil companies collect geothermal data regularly by tapping into volcanic heat that can often be found some 35km below the seabed with active underground volcanoes. Geothermal heat is a major source of power for New Zealand, for instance.
A problem with geothermal data in Egypt is of a bureaucratic nature. The collected data are not readily handed over to the Ministry of Petroleum with seismic and well data, when concession contracts expire. A source from the business sector explains that the ministry’s priority is to minimize its cost-recovery, and thus the authority tends to derogate the importance of geothermal data. A petroleum expert adds that even when the geothermal data is collected it is not necessarily shared with other ministries and government agencies, as was the case at the time of Sameh Fahmi. This policy undoubtedly slowed down the drive for the utilization of geothermal resources. Currently, the GANOPE company is working in this domain in cooperation with Emirati Inmaa Al Ain in the new Gulf of Suez annex.
A lack of available data may be alleviated using satellite surveys to collect information from quarries and mines. But transparency in the process is also called for. Having a good technological and regulatory support system in place beforehand is what allows for conventional sources of energy to be able to work in parallel with and even support renewables. In turn, renewables free up oil, gas and even coal from electricity production and redirects the resources towards chemicals processing industry and export potential.
Following the recent Eni-mega-gas find in the Mediterranean Sea, and a trend to pursue clean coal as a viable industry for the country, environmentalists in Egypt fear that the renewables era may be delayed further. An energy transformation in Egypt will thus remain at risk, unless the government becomes aware that policy is the fulcrum towards pursuing a balancing act that incorporates renewables and conventionals into a single sustainable mix.
Special thanks to James Ridgeway, Mohamed El-Aswad and Khalil Eid.