By Mohamed Farag
The Ministry of Electricity and Renewable Energy will add 14,400 MW to the national grid within two years, in collaboration with German engineering conglomerate, Siemens, according to minister Mohamed Shaker.
This will come from the three new power plants implemented by Siemens in Beni Suef, Burullus, and the new administrative capital.
The projects represent approximately 40% of the total capacity of the national electricity grid, according to Shaker, in statements during an exclusive interview to Daily News Egypt.
When will the new projects implemented by Siemens begin?
The first phase of the project will begin in November 2016, to add a capacity of 800 MW. It will increase to 5,600 MW in May 2017. The grid will then add 7,600 MW in November of the same year. The final stage, scheduled for April 2018, will make the total added capacity amount to 14,400 MW. The German company, Siemens, has spent €650m so far, though no binding contract was signed between both parties. However, they did so due to the mutual trust between the company and the Ministry of Electricity. The three projects are worth total investments of approximately €6bn. The Ministry of Electricity will repay the cost over several years, to be agreed upon at the conclusion of contracts between the two parties, which sector sources considered very important in light of the lack of investment in the electricity sector.
How will the projects’ financial requirements be provided?
The cabinet agreed to provide the financial requirements of the Egyptian Electricity Holding Company for the implementation of its contracts with Siemens and its local partners. They will establish three power plants running on the combined cycle system. In addition, they will implement gas lines and reduction stations for the three power plants, to keep pace with the timeline of the project. The cabinet will also secure natural gas for the three projects, which will be a daily size of 22m cubic metres.
The total targeted capacity output of the new capital power plants is 4,800 MW, the same to be generated from the Burullus power plant. Moreover, a large complex of electricity generators will be established in Beni Suef. This complex will be of the same capacity, and will produce one-third of it without fuel by depending on the exhaust of gas units. It will include eight gas units and three steam ones.
Will the ministry put forward IPOs for power plants?
The Ministry of Electricity is considering holding partnerships with private companies, Egyptian or Arab, to co-fund capital needed for the establishment of power plants constructed by Siemens. We presented a proposal to the cabinet about putting up power plants for IPOs, which was welcomed by the government. We are currently studying procedures and controls necessary to launch projects in the stock market.
What are the ministry’s means in the implementation of the projects?
We followed unconventional ways and technology to escape the crisis as soon as possible. This was done through cooperation with the sovereign institutions that have facilitated the action, especially with regards to the two companies implementing the urgent plan, namely General Electric (GE) and Elsewedy Electric. They have been handed the sites to begin the implementation before signing the contracts. It was agreed upon to provide 143m cubic metres to produce nearly 28,500 MW by July. This has been increased by approximately 4m cubic metres in August, to produce 31,00 MW.
Power plants fuel needs will begin to decline in September to reach 146m cubic metres, then to 139m cubic metres in October and November. Further decline will occur in December to reach 132m cubic metres. There are currently negotiations with a number of Chinese companies to set up water pumping and storage stations to produce energy, next to coal plants, and new and renewable energy stations. Securing the power supply is the ministry’s main objective.
Will the company retrieve the renewable energy projects’ tariff?
No, the decision will not be rolled back on the implementation of new and renewable energy projects, according to the feed-in tariff system. The German consulting office, Fichtner, finished the power purchase agreement and will be signed with investors soon.
What are the latest developments in the Dabaa nuclear project?
The state has made great strides in the negotiations with Russia and China in this regard, to reach the best deals and the latest technologies.
