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.”
