Electricity Ministry will shift to auctions to encourage investment

CAIRO – 17 October 2017: The Egyptian government will auction renewable energy plants after the end of the second phase of the feed-in-tariff (FiT) scheme, Minister of Electricity Mohamed Shaker said during an event organized by the British Egyptian Business Association (BEBA).

Power plants will be built with the help of private sectors. "We have many proposals to build plants under the BOO (build, own, operate) system... but we prefer to use auctions later on," Shaker said.

Reviewing progress made so far in the FiT scheme, Shaker said: "The first round wasn't successful, but the second one is more successful as we signed a number of 25 power purchase agreements (PPA) so far."

By 2025, around 37.2 percent of Egypt's power will be generated from renewable energy resources, Shaker noted.

The 14,400MW of capacity expected from three Siemens-led power plants in the New Administrative Capital, Beni Suef and Burullus, prompted the Ministry to delay implementation of projects.

"BOO projects in Ayoun Mousa, Luxor and Qena were shifted to 2022-2027 plan for example," the minister said.

As for the Dabaa nuclear plant, Shaker said contracts will be signed by the end of 2017, adding that the contracts will be followed by several studies.

"The first reactor of Dabaa is expected to be ready after eight years, the second reactor a year after that and the third and fourth reactors to be completed a year later," Shaker said.

The agreement with the Russian developer of the project, state-owned Rosatom, includes a 13-year grace period. "This means that the project will start operations and sell power before the end of the grace period," he said.

Shaker stressed that the electricity sector has seen improvements over the past three years. "In 2014, Egypt was suffering from severe power outages as there was a deficit of 25 percent of the peak load, and around 6,000MW of deficit," he said; highlighting that the country didn't suffer from power blackouts since June 2015 until now.

To reach that, Shaker said the ministry conducted maintenance operations for 70 percent of power plants, which resulted in generating 1,961MW of electricity.