The Ministry of Electricity Mohamed Shaker has developed a plan that includes many investment opportunities in the energy sector in all its fields, including the production of new and renewable energy, electrical interconnection and water pumping and storage projects to produce electricity.
The government aims to transform Egypt into a pivotal centre for energy trade between Europe, Africa, and the Middle East.
Daily News Egypt sat down for an interview with Shaker to talk about future projects and means of utilising surplus production. The transcript for which is below, lightly edited for clarity:
Amount of electricity sector future investments?
Total current investments being implemented in the sector amount to EGP 515bn until the end of 2018, aside from the cost of the Dabaa nuclear plant. This includes EGP 433.5bn for energy production, EGP 54.5bn for transmission network, and EGP 27bn for energy distribution.
Future investments for electricity production projects amounted to EGP 153.5bn, including the cost of establishing a water pumping storage power plant in Ataqa with a capacity of 2,400 MW and a coalfired power plant in Hamrawin with capacity of 6,000 MW.
Can you share latest developments on coalfired power plant in Hamrawin?
Shanghai Electric won the tender with investments of $4.4bn. We are also negotiating AlNowais Investment Company to establish another coal station in Oyoun Moussa.We are now discussing the final tariff.
The UAE company will implement the project in return for the Ministry of Electricity to purchase the energy produced from the project. The cabi- net had approved the establishment of a coal-fired thermal power plant, with a total capacity of up to 2,650 MW using supercritical pressure technology, which would also output 4,500 cubic meters of water per day.
When will contracts for pumping, storage station get signed?
Agreement is under way to establish a water pumping and storage project to produce energy in Ataqa with a capacity of 2,400 MW through eight units, each producing 300 MW.
It is expected to complete the agreement with the Sinohydro company before the end of the year with a cost of $2.6bn.
Have studies of nuclear station been completed?
Work is under way to complete the survey and environmental studies to develop the designs of the Dabaa nuclear station in preparation for obtaining the license to start construction. According to the timetable set in the contract with the Russian company Rosatom; the first reactor will be ready in 2026 and the remaining units will enter gradually until 2029.
The nuclear reactors that will be implemented will follow all standards for nuclear safety and an unprecedented level of protection against internal events and external factors.
The design of the reactor bears the collision of a large passenger plane in the outer shell of the station in addition to earthquakes, floods, storms, snowfalls, and external explosions.
President Abdel Fattah Al-Sisi and his Russian counterpart Vladimir Putin witnessed the signing of the contracts in December to establish four nuclear reactors in Dabaa.
The agreed programme includes design and construction, securing the supply of nuclear fuel, consultancy, and maintenance services, and managing, and processing exhausted fuel.
The Russian Ministry of Finance provided a financing loan for the project worth $25bn, including 85%
of the project’s costs. Al-Sisi approved the loan and its was published in the official gazette in mid May 2016.
Amount of debt owed by, to Electricity Ministry?
Late dues for Electricity Ministry at government agencies amount to EGP 27bn, while the ministry’s debts owed to the petroleum sector amount to EGP 115bn.
When will auctions systems become introduced to renewable energy projects?
The auction system will be adopted after the completion of the feed-in tariff projects. A tender was floated to establish projects for photovoltaic cells in the West Nile with a capacity of 600 MW, which will see an auction to reach the price of the tariff.
The government announced the renewable energy feed-in tariff projects in 2014. There are 32 companies in the first and second phase of the project that are implementing solar energy production plants with a capacity of 1,500 MW, where each plant outputs 20-50 MW.
What about status of reserve, surplus of electricity production on national grids?
Electricity production reserves are currently up to 25%, which meets all future demand and help exchange feed with neighbouring countries, in addition to supporting all development projects needed in the coming period. This means stable feed for all investors.
We always seek to rely on the units of higher efficiency and less fuel consumption while upgrading the efficiency of old units.
Can you share latest developments on interconnection project with Saudi Arabia?
We are preparing the project for electrical connection with Saudi Arabia, at an investment cost of up to $1.56bn, including $626m from Egypt.
The pilot phase will start in April 2021 and full operation by April 2022. The financial envelopes for the Badr- Madinah-Tabuk transformer substation tender will be opened before the end of the year.
The electricity sector depends on foreign currency to meet needs such as fuel, spare parts and construction and strengthening of networks and therefore any movement of foreign exchange rate affects the sector. The economic reform decisions were necessary.
Have you started installing smart metres?
A pilot project is under way to install 250, 000 smart meters across six distribution companies. The first phase of the project has been completed.
We are preparing to start the installation of the following stages. The project will be expanded as part of the ministry’s plan to replace old meters with smart and prepaid meters. Installation in the second phase has reached 10%. The phase will be completed by December or January 2019.
The mechanism of installation of the coded meters has been approved by the cabinet for the buildings that violate permits but receive electricity without ownership. These buildings must adjust their situation.