Thursday,14 December, 2017
Current issue | Issue 1364, (12 - 18 October 2017)
Thursday,14 December, 2017
Issue 1364, (12 - 18 October 2017)

Ahram Weekly

Egypt’s green transition

Egypt is keen on shifting to renewable energy production, reports Ahmed Kotb

 

Egypt’s green transition
Egypt’s green transition

A digital map for solar and wind plant investment opportunities will be launched by the New and Renewable Energy Authority (NREA), said Mohamed Al-Khayat, head of NREA.

During the ninth Egyptian-German Renewables Day held Sunday in Cairo by the German Arab Chamber for Industry and Commerce, Al-Khayat also said there were three new solar power plants starting operation next month under the first round of Egypt’s feed-in tariff system (FiT), and that 20 solar power developers have signed power purchase agreements (PPA) with the Ministry of Electricity to take part in the second round of the FiT system. A total of 34 companies have expressed interest in developing projects under the second phase of the FiT system, Al-Khayat added.

The feed-in tariff is a special pricing system whereby the government is obliged to buy electricity generated from renewable energy installations by the private sector at a fixed tariff. It has resulted in solar photovoltaic and wind projects that will add 4,300 MW in capacity to the system by 2018.

Al-Khayat also said the Ministry of Electricity will issue tenders for generating 36 megawatts (MW) from solar projects under the build, own, operate (BOO) system. The Egyptian Ministry of Electricity aims to generate 20 per cent of Egypt’s energy capacity from renewables by 2022, and 37 per cent by 2035.

Egypt’s Minister of Environment Khaled Fahmi added that Egypt is even targeting 55 per cent of energy from renewable resources by 2050. “Egypt has the tools to undertake the measures taken by the Paris Climate Agreement,” Fahmi stressed. The United Nations Framework Convention on Climate Change (COP 21) in Paris in 2015 reached agreement for the first time ever by the participating countries, including Egypt, to work on limiting global temperature increases below two degrees Celsius.

Fahmi stated that Egypt has acquired a $154 million loan from the Green Climate Fund to finance renewable energy projects, in addition to receiving more loans that might reach $1 billion to implement such projects to achieve the desired goal by 2022. Egypt’s current grid capacity has reached over 33,000 MW. Total consumption was less than 30,000 MW during the peak months of July and August.

“Solar energy is now cheaper than conventional energy sources,” said Yassin Abdel-Ghaffar, managing director of Solarize Egypt. The political will to end energy subsidies is helping the renewable energy sector, Abdel-Ghaffar added, helping the Egyptian market to accept solar power projects, especially after providing needed finances and offering competitive power purchase pricing set by the Ministry of Electricity.

“The private sector, through small and medium renewable projects, is helping the sector to boom,” Abdel-Ghaffar pointed out, adding that Solarize Egypt is planning to carry out solar power projects with a total capacity of 15 MW by the end of 2017.

Egyptian-German cooperation in renewable energies and other fields was highlighted by Andreas Hergenrother, head of the German-Arab Chamber of Industry and Commerce, who said the two countries are ready for more intensive cooperation in renewable energy.

Hergenrother said bilateral trade between Cairo and Berlin increased by 14 per cent during the first seven months of 2017 to reach 3.6 billion euros, and that Egyptian exports to Germany rose by almost 20 per cent against a 12 per cent increase of German exports to Egypt during the same period. “Bilateral trade volume reached 5.6 billion euros in 2016,” Hergenrother added.

Germany’s Ambassador to Egypt Julius George Luy said renewable energy in Egypt has proved its competitiveness compared to traditional sources of energy, and that Egypt should continue to seek an economic viable supply of energy to avoid the negative consequences of climate change.

Germany will support the Egyptian government as much as possible in its efforts to pursue energy efficient programmes, Luy stressed.

Energiewende, or energy transition, is a German political plan to transform the energy system to decarburisation using renewables, and its success has inspired many countries, including Egypt, to accelerate their efforts to shift towards more renewable energies.

During the Egyptian-German Renewables Day, Bernd Wollwerth-Carl, a member of the German delegation and head of solar energy at Germany’s Renewables Academy, listed the reasons behind Germany’s energy transition efforts. These were mainly to phase out nuclear power generation, reduce dependency on energy imports, reduce carbon emissions, develop new technologies as new sources of growth and employment, and reach an energy policy that can be both sustainable and economically successful.

Electricity generation capacity in Germany in 2015 reached 95.9 gigawatts (GW) from fossil fuels against 97.9 GW from renewables. “Renewable energy sources saved Germany 8.8 billion euros in 2015,” Wollwerth-Carl said. Some 150 GW of renewable energy capacity were installed worldwide in 2015 alone.

Stefan Saatmann, asset manager at the German company Stromnetz Berlin, said Egypt and Germany can learn a lot from each other in energy and grid integration of renewable energies. Saatmann added that Egypt can currently benefit from the latest technologies in renewables and their reduced cost compared to previous years.

“Wind energy and solar photo voltaic systems are the winners of German energy transition,” Saatmann pointed out, adding that electrical networks in the future require a dynamic stability of the energy system along with the reliability of supply, and that this will be influenced by a decentralised generation of energy. Germany’s sources of renewable energy are mainly photovoltaic systems, off-shore and on-shore wind mills, along with biomass and hydroelectric power projects.

Shifting to renewable energies has become an important step for many developing and developed countries, but as one recent research paper suggests, the geopolitics of such a shift is important to consider, especially for countries in Africa, including Egypt. “One region where large-scale deployment of renewable energy may have significant geopolitical consequences is Africa,” the paper stated.

The research paper, “The Geopolitics of Renewable Energy”, recently published by Columbia University, Harvard University and the Norwegian Institute of International Affairs, and supported by the German Federal Foreign Office, the Norwegian Ministry of Foreign Affairs and the International Renewable Energy Agency (IRENA), stated that the far-reaching consequences of a global shift to renewables require increasing attention to the geopolitics of renewable energy.

The paper discussed mechanisms through which renewable energy could shape geopolitics, including technology and finance. “Capital for investment and technology may increasingly become sources of international cooperation or rivalry,” the paper stated, and warned that increased tensions between developing and developed countries could build up over the transfer of technology.

Additionally, the paper pointed out that conflict over renewable energy infrastructure could develop, especially if new asymmetric dependencies arise between major producers and consumers of renewable energy. The expansion of renewable energy projects, according to the paper, can involve a more decentralised energy generation, or mainly larger companies with financial and scientific clout to be able to keep pace in an intense global race to continuously improve technology and cost-cutting. Egypt is currently involving both models in its efforts to expand the use of renewables for electricity production.

Nevertheless, renewable energy technologies, and their reduced cost overtime, may lead to greater interconnections between nations, the report pointed out, and a more widespread distributed energy generation. “The potential geopolitical implications are complex,” the report said, explaining that greater cross-border trade in electricity could create geopolitical vulnerabilities for electricity importers. On the other hand, the report added, greater electric interconnection could increase interdependence among nations, reducing risks of conflict.

Another mechanism by which renewable energy can reshape geopolitics is the reduced oil and gas demand. According to the study, the decline in revenue generated from fossil fuel energy exports can provide an impetus for political reform and economic diversification. “Consumer countries would improve their trade balances and their room to manoeuvre in the international system,” said the report.

The paper also stated that a decline in petroleum revenue could also lead to political instability, especially in the short to medium term. However, there is no doubt that the development of renewable energy is a game changer for many countries in terms of energy security.

Reduced greenhouse gas emissions as a result of expanded use of renewables is another important mechanism that the study mentioned, and that this should logically reduce the risk of conflict and instability that climate change would otherwise generate.

The paper stressed that access to modern forms of energy is one of the preconditions for achieving sustainable development, as such access can contribute to lasting solutions to instability and conflict.

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