(AFP Photo)
Amusement parks, poultry farms, and clubs receive electricity at low prices in the face of rising energy costs, according to the head of Central Performance Supervision at the Ministry of Electricity Mohammad Salim.
“The price of 1 KW hour for Dream Park amounts to EGP 0.19 while poultry farms obtain the same amount of electricity at EGP 0.17. Clubs receive a 75% subsidy of the value of electricity consumed.”
According to Salim, the cost of 1 KW hour is EGP 0.48.
He feels that since these centres sell their services at exorbitant prices to the public and earn vast profits, they “cannot continue to receive electricity at these prices or consume such great amounts”.
Between 10-12% of electricity is stolen from Egypt’s national grid, according to Salim, who added that these figures are borne by municipalities on a monthly basis.
Salim mentioned that the rationalisation campaign launched by the ministries of Electricity and Petroleum nearly three months ago were not successful, as the ministry hoped to decrease consumption rates by nearly 5% annually to arrive at a 20% reduction by 2020.
Salim stated that “Egyptians are largely indifferent despite the worsening crisis, and the deficit has reached 6,000 MW per day.”
According to Salim, serious participation in the rationalisation campaign and tightening control of theft will reduce consumption by at least 10% this year.
The power outage crisis has worsened over the past two weeks due to increased loads caused by growing consumption rates, and the deficit exceeds 6,000 MW per day.
Salim demanded that ministry employees and distribution networks be granted judicial control in order to cope with the crisis.
He explained that malls, hotels, and commercial centres do not adhere to technical specifications for lighting systems, which serves to increase consumption: “The issue is not that you are paying for what you consumed, but that we are facing a crisis that we all must come together in order to solve.”
Power plants currently require urgent repairs but the current situation alongside a consumption increase has prevented this from taking place, Salim said.
“Expanding the use of fuel oil recently exerted a negative impact on power plants’ capacities,” he added.
“Some stations in Ismailia and 6th October ceased operations while four stations in Alexandria and Cairo lost 70% of capacity due to the use of fuel oil that failed to conform with specifications.”
The price of 1m BTUs of gas ranges from $8-12 while the price of 1m BTUs of fuel oil ranges between $18-28. Diesel is worth $22 per 1m BTUs.
“Egypt’s power crisis will persist until the root of the problem is addressed and temporary solutions abandoned,” an official at the Ministry of Electricity said.
The official, who preferred to remain anonymous, explained that treating the root of the problem may take the form of speeding up the imposition of a special tariff for new and renewable energy.
The official believes that the Ministry of Electricity continues to determine the cost of one KW hour of electricity at EGP 0.48 while the actual cost is EGP 1.40, which throws competition with investors in the new and renewable energy sector.
Investors offered to the Ministry of Electricity the sale of 1 KW hour of wind energy at approximately EGP 0.80 and EGP 1 for solar energy, the official said.
Allocations for electricity for 2014/2015 fiscal year budget amount to EGP 27bn and will be reduced to EGP 20bn, according to press statements made by Electricity Minister Mohamed Shakir.
“Using solar energy to generate electricity can begin immediately without a need for huge investments or the construction of stations which can take between 3-5 years,” Shakir said.
Minister of Trade and Industry Mounir Fakhry Abdelnour has said in press statements that “the electricity crisis will transform without expanded investments”.
According to Mohammed Morshedy, Chairman of the Chamber of Textile Industries at the Egyptian Federation of Industries, power outages will increase and will amplify costs and losses in light of the already difficult conditions experienced by Egypt’s economy.
