Bidding for a 1,000 megawatt wind farm has begin, and shows the Egyptian government's intent to meet its ambitious renewable energy target.
Egypt shows faith in renewable energy with wind farm tender
A tender for a 1,000-megawatt wind farm signals intent by the Egyptian government to meet its ambitious target for tapping renewable energy sources.
Bidding for the complex is under way, with the farm expected to come online in 2016, Hassan Younis, Egypt's minister of electricity, said at a wind energy conference in Cairo last month. The contract will be awarded before the year is out, Professor Galal Osman, the president of the Egyptian Wind Energy Association, told The National yesterday.
The tender represents one of several wind energy projects that are intended to provide a total of 7,200 megawatts by the end of the decade. Egypt generates only 550 megawatts from wind.
Yet the Egyptian government hopes that, together with solar and thermal power, wind energy will cover 20 per cent of all domestic electricity demand by 2020. Wind turbines will provide 12 per cent of all alternative energy, said Prof Osman, as the government is looking to capitalise on its vast potential.
"The wind conditions in Egypt are among the best in the world," said Stefan Gsänger, the secretary general of the World Wind Energy Association, which organised the Cairo conference.
Existing capacity is state-owned, but a two-step plan is in place to introduce private ownership. While 33 per cent of the added capacity will be owned by the government, the remaining 4,825 megawatts will be generated by private companies under the build-own-operate (BOO) model.
Experts believe that private investment in wind energy will depend on the introduction of a feed-in tariff, which reimburses producers for the cost of production not covered by electricity prices. Feed-in tariffs are in place in virtually every country that generates electricity from wind or solar power. In the Middle East, where fossil fuels are heavily subsidised, renewable energy would not be competitive without financial incentives. "With existing subsidies, investment in renewables is not viable without compensation," Mr Gsänger said.
Egypt is working on a feed-in tariff, scheduled to come into existence next year. It will be based on the prices quoted by private companies bidding for the BOO contracts, Mr Osman said.
Investing in wind power not only diversifies Egypt's electricity sources, it will also provide the government with an opportunity to create much-needed jobs. High unemployment, especially among the young, was the primary reason behind the popular unrest that unseated Hosni Mubarak, the president, after 31 years in power.
"A well-established wind energy industry can create tens of thousands of jobs," Mr Gsänger said.