Egypt hopes to make progress with renewable energy

Egypt's Ministry of Electricity and Renewable Energy (MERE) has a plan to boost the country’s use of renewable energies.

The MERE plans to hit a benchmark of 20 percent by 2022, when the group expects renewables to provide one-fifth of all power used domestically.

Recent events, however, tell a complex story of a nation struggling to make progress in the face of financial headwinds.

Egypt had a variety of investors on board for solar development and other projects, but after the devaluation of Egypt’s currency, some of those deals fell through. Still Egypt is acting with a “feed-in-tariff” scheme to promote these types of international contracts, while cutting tariff rates to $0.084 per KWh for smaller-scale solar PV plants and $0.078 per KWh for some larger facilities. There’s also an option of variable exchange rates for repayment.

The move comes after the country added 6.9 GW of installed capacity to its grid last year. Egypt is also easing electricity subsidies.

For more on the outlook for Egyptian energy leadership, Gulf News Journal spoke with Daniel Armanios, assistant professor of Engineering and Public Policy at Carnegie Mellon’s Scott Institute for Energy Innovation.

“While Egypt's move to lower tariff prices on solar and allow for international arbitration of local contracts is trying to attract both renewable energy consumers and investors, it is unclear whether these measures will overcome these recent slowdowns, especially given the passage of recent austerity measures that Egypt has put into place as part of a recent $12 billion bailout plan approved by the (International Monetary Fund).” Armanios said.

If the country can pull its plan off, he said, it could have significant benefits for citizens.

“In terms of the Egyptian economy, increases to the local renewable sector should also increase the availability of high-paying jobs,” Armanios said. “The Egyptian economy has not adequately recovered from the recent social unrest, and there are some indications that this has worsened.”

Armanios cited unemployment rates that were about 9 percent prior to the revolution; and recent figures of approximately 12 percent.

“Youth unemployment prior to the revolution was around 26.3 percent;” Armanios said. “Now, depending on the data source, the most recent figures and estimates note this rate to hover around 27 percent and some even argue it to be as high as 34 percent. The hope then is that as the renewable sector expands, this could be a steady source of high-paying jobs that could help reverse these unemployment trends.”

Egypt isn't the only country in the region working toward this kind of innovation.

“In terms of renewables in the region, strong moves have recently been made by Morocco, Jordan, and the UAE in renewable energy, so these new investments are likely ones aimed at maintaining Egypt's competitiveness in the region around renewable energy,” Armanios said. “Moreover, these moves are particularly important given Ethiopia's recent moves in hydroelectricity via the Grand Renaissance Dam (GERD), which will impact Egypt's hydropower capacity.”



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