A gust of wind energy in Egypt
By Christopher Le Coq
Date: May 23, 2010, 2:56 pm
Source: Daily News Egypt
Wind energy is growing leaps and bounds globally, at rate of 31.7 percent since 2001, and wind capacity is doubling every three years. While Africa is having difficulty keeping apace, Egypt seems to be forging full steam ahead.
The actual growth rate for the continent hovered around 28 percent last year, below the 31.6 percent for the world total, according to 2009 World Wind Energy Report by the World Wind Energy Association.
A conference titled “Wind Power Africa 2010” held in South Africa earlier this month, hosted by the African Wind Energy Association in cooperation with African governments and international organizations, brought together stakeholders to discuss the current state and future projections for the wind energy sector.
Eduardo Gonzalez, Spain's representative to the Global Wind Energy Council (GWEC), told Reuters that Africa is faring the worst compared to other regions.
The current world leaders in total capacity are Europe with 47.9 percent, North America with 24.2 percent and Asia with 25.1 percent. In terms of newly installed wind turbines, Asia is leading the way with 40.4 percent, the US with 28.4 percent and Europe trailing in third place at 27.3 percent.
Africa accounts for a mere 0.4 percent of new wind turbine installations, and just 0.5 percent of current total capacity, the report indicates. The figures speak for themselves.
While the continent as a whole seems to be left in the dust by the US, Asia and Europe, Egypt, on the other hand, has made significant strides. In fact, Egypt is helping lead the continent in wind energy: Combined with Morocco, they represent 169 megawatts out of the 770 for the continent as a whole.
Energy in Egypt
Egypt already has wind parks in Hurgada and Zafarana on the Rea Sea coast.
“Egypt is quite advanced in relation to other African countries,” Mohamed Osama, vice president of the Wind Energy Association of Egypt, said.
Several factors explain why Egypt is bucking the trend. In February 2008, the government announced its ambitious goal to generate 20 percent of the country’s energy production from renewable sources by 2020, which equates to about 7 gigawatts of electricity.
The government is concerned about dwindling supplies of oil and gas; according the Wind Energy Association of Egypt’s website, supplies will be exhausted in around 30 years, making renewable sources critical for sustaining the economy.
Osama also said that Egypt has been vigorously pursuing green energy due to outside pressure, notably from the EU, one of the country’s biggest foreign donors.
Between 2007-2010, the EU alone provided Egypt with €140 million in aid per year in various forms, and this figure is set to increase to €150 million annually over the next two years.
“EU governments and its citizens are concerned about the environment, especially climate change, which has an influence on the EU’s development and donor programs in developing countries like Egypt,” Osama explained.
Indeed, the EU has been heavily involved in promoting renewable energy in Egypt, particularly with regards to wind power, explained Gerhard Krause, head of the economic sector at the Delegation of the European Union to Egypt.
The first EU co-financed project was a 200 megawatt wind park situated in the Gulf of Zayt, following other wind farm projects in Zafarana that were co-financed bilaterally with EU members states such as Denmark, Spain and Germany.
For its realization, European Development Institutions provided €271 million in the form of loans, of which €30 million was given as a grant by the EU Delegation.
In the pipeline
Most of the potential for wind turbines is found in the Gulf of Suez, such as the first joint EU-Egypt project, thanks to the strong winds that whisk through the area.
A second EU-Egypt wind farm also in the Gulf of Zayt is currently under discussion, and would contribute 200 megawatts of power.
Egypt being on the forefront of wind energy in Africa notwithstanding, both Osama and Krause believe that more can be done to stimulate growth in the sector. Towards that end, the EU together with German development bank Kreditanstalt fuer Wiederaufbau (KfW) is developing a master plan expected to deliver numerous infrastructure projects for wind and solar energy.
Still, Osama says that the 20 percent objective by 2020 may be overly ambitious. “For this target to reached, the government has to ensure that the same rate of wind turbines is maintained, but this is not guaranteed whatsoever,” he warned.
He added that the rate of wind parks established needs to be accelerated.
Krause was less pessimistic, stating that the 20 percent target “should be attainable” provided that the expansion of power plants continues, while appropriate measures are taken to limit demand growth.
“Egypt has the right prerequisites for achieving the target: It began from a solid starting point, as 12 percent of its energy came from renewable source at the time the target entered into force,” he said, “Also, geographically in places such as the Red Sea, there is great potential for wind parks.”
Both do agree that it is vital to establish a functioning feed-in-tariff law in Egypt.
Currently, the Egyptian government subsidizes electricity for its population of almost 80 million, 40 percent of which live below the poverty line. This, however, results in wind and other renewable sources of energy becoming much too costly to compete with gas and oil.
The introduction of a feed-in-tariff would guarantee that all sources of renewable energy would become competitive with traditional sources of energy.
“Essentially, a feed-in-tariff requires the government to buy renewable electricity at an established rate and then resell to consumers at a reduced, competitive rate,” Osama said.
Krause added, “The feed-in-tariff law works very well in other countries such as Germany, and a similar system would be equally effective in Egypt.”
If such a law is not created, then the private sector has much less of an incentive to undertake renewable energy projects, Krause and Osama affirmed.
Osama also said that for a successful formula, this should be combined with government efforts to create a nurturing economic environment for local businesses in the energy sector as well as increasing citizens’ awareness of the importance of clean energy.
Speaking on behalf of the EU Delegation to Egypt, Krause said that Egypt needs to take advantage of EU best practices and expertise in building a regulatory framework and developing the industry.
Along with instilling investor confidence in the sector, Egypt is primed to continue leading the way in wind energy in Africa.