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Egypt eyes power self-sufficiency with megaproject

Powerhouse: Material is moved by a crane at the construction site of a gas-powered combined cycle power plant in Bei Suef, Egypt, on Monday

Fedina S. Sundaryani (The Jakarta Post)
Beni Suef, Egypt
Fri, May 26, 2017

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Egypt eyes power self-sufficiency with megaproject

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span class="inline inline-center">Powerhouse: Material is moved by a crane at the construction site of a gas-powered combined cycle power plant in Bei Suef, Egypt, on Monday. Three gas-powered combined cycle power plants with a total installed capacity of 14.4 gigawatts are being built in Egypt by German powerhouse Siemens. (Antara/Andika Wahyu)

A set of three power plants developed by German powerhouse Siemens is expected to help Egypt gain electrical self-sufficiency and end the frequent blackouts that have hindered growth in Africa’s second-largest economy.

All three are gas-powered combined cycle power plants with a total installed capacity of 14.4 gigawatts (GW), making it one of the world’s largest megaprojects of its kind.

The facilities are expected to start operating by next October and will add to to the North African country’s current national capacity of around 35 GW.

Siemens Egypt CEO Emad Ghaly said he remembered almost complete blackouts in the country that lasted two to three hours a day starting from the summer of 2012 and reaching a peak in 2014.

The state of the country’s power sector during those years pushed the government to recruit Siemens — alongside local manufacturing firm Elsewedy Electric — to establish a 650 megawatt (MW) power plant in Attaqa in a mere six months.

This set the precedent for the current megaproject, with an investment of 8 billion euro (US$8.97 billion), which will be completed in a mere three years if the firms can stick to their deadline.

Since the project signing in 2015, the Beni Suef and Burullus power plants have started partially operating with a capacity of 4.8 percent, while the New Capital plant has yet to start operating.

The city of Beni Suef is located around 150 kilometers south of Cairo, while Burullus is some 200 kilometers north of the capital city.

In addition to boosting Egypt’s national power capacity, the megaproject will also help increase the reserve margin to around 10 to 15 percent depending on the number of ageing power plants the government decides to decommission by 2018. The International Energy Agency (IEA) states that the ideal reserve margin is around 30 percent.

“The 14.4 GW will help the government operate with a reserve. We were operating at the edge before. Before there was no reserves but after 4.8 GW in January 2017, now they have a reserve in the range of 10 percent,” Siemens’ Ghaly said recently in a press conference.

While the Beni Suef and Burullus power plants are being constructed by Elsewedy Electric, the New Capital power plant is being developed in cooperation with another local company, Orascom Construction.

All three power plants will have eight gas turbines and 12 diesel generators. The liquefied natural gas (LNG) used for fuel will be imported until at least 2020. Siemens boasts that the power plants are equipped with H-class gas turbines, Siemens’ most powerful and efficient type, which is estimated to boost fuel consumption efficiency by around 60 percent, or $1.3 billion.

Ghaly also confirmed that each of the three power plants needed 600 million metric square cubic feet of gas per day (mmscfd), with gas in the country priced around $4 to $7 per million metric British thermal unit.

The electricity is expected to provide electricity in remote and rural villages as well as supply electricity to heavy industries such as the cement sector and the upstream oil and gas sectors. Moreover, the New Capital power plant will power up Egypt’s upcoming new administrative capital. In total, it will provide electricity for 2.4 million citizens.

Official data from 2016 shows that 45 percent of all electricity consumers in Egypt are households, with an average consumption rate of 10,000 kilowatt hours (kWh) per annum.

Elsewedy Electric president and CEO, Ahmad El Sewedy, said that while the 2012-2014 blackouts had been a mere nuisance for households, they had caused huge problems for the industrial sector at a time when the government was attempting to frame the country as a manufacturing hub for the whole region.

El Sewedy also emphasized that the short development period for the megaproject was unprecedented. Before the construction of the 650 MW Attaqa power plant, the country had been “building 1,000 to 2,000 MW every year, but never 15,000 MW in three years”.

In addition to the power plant megaproject, the $8 billion contract also includes the construction of 12 wind farms with a total capacity of 2 GW and 11,500 kilovolts of gas-insulated substations.

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