Building the Institutional Capacity Case of Egypt

Transcription

1 Building the Institutional Capacity Case of Egypt Mohamed Salah Elsobki (Jr.) Professor, Cairo University; Former Founding Managing Director of the Egyptian Electric Regulatory Agency, Egypt MENA Regional Conference on Infrastructure Reform an Regulation Amman, Jordan, December 7-8, 2009

2 Building the Institutional Capacity Case of Egypt Energy market motivations, challenges, choices and targets. Electricity Market Development in Egypt. Past, Current and Potential future electricity Market in Egypt. Pros and Cons

3 Energy market motivations, High energy demand and gross rates Limited finance Captive market Pre mature commercial rules challenges

4 Expected / Targeted Future Energy Status up 2022 (conservative) Reduce energy consumption by 8,3% Nuclear up MW (6%) Renewable - current 3000 MW and target MW (energy up 20%) (9%) Retain Oil and NG levels of production (40%)

5 Million toe Expected / Targeted Future Energy Status up 2022 (ambitious) Retain Oil and improve on NG levels of production (5% annually) (61%) Still need additional energy to get from else where (15%) / / / / / / / / / / / / / / / /22 From fuel products From N.G. From Hydro From Wind From Nuclear Local energy needs Local energy needs w ith energy eff. Additional needed energy

6 Energy market motivations, challenges, choices and targets. High energy demand and gross rates Limited finance Captive market Pre mature commercial rules Alternative resources of energy Attract finance Gradual change to commercial market Acceptance of commercial rules

7 Evolution of the Egyptian Electricity Sector Private Nationalization MOEE 7 Discos Into Busi. Sec. Regulatory Law EEHC Unbundling PECE EEA Law 100 BOOT Law 18 Discos in to Elec. Sec. Current Regulatory

8 MOEE/EEHC Generation Co.(s) Trans Co(s) Dis Co(s) MV & LV Gov. PP BOOT(s) UHV HV MV Exports & Imports LV customers ISP Electricity Market in Egypt Started in 2001

9 MOEE/EEHC ISP Generation Co.(s) Trans Co(s) Trans Co(s) Dis Co(s) MV & LV Gov. PP BOOT(s) UHV HV MV Exports & Imports Private Distributor LV customers ISP Target Market Current phase one

10 Independent Power Producers Three BOOT projects Quasi governmental 100% private investment only allowed to sell to public owned grid sale to public grid does not affect end users tariffs Around 10% of the capacity and energy ISP in the pipe line small in size In relatively remote areas Growing in number Getting into geographical competitive areas

11 MOEE/EEHC NG ISP IPP expansion Generation Co.(s) Trans Co(s) Dis Co(s) MV & LV Gov. PP BOOT(s) UHV HV MV Exports & Imports Privat Distributo LV customers ISP Target Market Proposed phase two

12 emand Bilateral contracts New customers, New service providers & old service providers 00 % 20 % X % 0% Near future (0-3 years) Time Slide

13 emand Bilateral contracts New customers, New service providers & old service providers 00 % X % 20 % Bilateral contracts Old customers, Old service providers & new service providers 0% Near future (0-3 years) Time

14 MOEE/EEHC NG ISP IPP expansion Generation Co.(s) Trans Co(s) Dis Co(s) MV & LV Gov. PP BOOT(s) UHV HV MV Exports & Imports Privat Distributo LV customers ISP Target Market Proposed phase three

15 IPP expansion Ministry of Electricity and Energy MOEE/EEHC RE: Gov PP & IPP.. Generation Co.(s) Trans. TSO co. Dis Co(s) MV & LV BOOT(s) UHV HV MV Exports & Imports Independent Merchant Transmission & Distribution ISP(s) EEUCPRA Target market proposed phase four

16 Renewable energies (wind)

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18 Wind Energy in Egypt

19 EGYPT'S WIND ENERGY PROJECTS

20 Renewable Energy Authority Private Sector With total share about 63 % MW \ \ \ \ / / / / / / / /2020 Year

21 Renewable Energy Development Business Models Item NAREA Competitive Bidding Feed-In-Tariff Program size 2200 MW 2500 MW 2500 MW Single Wind Farm Size Large ( MW) Large ten Modules each (250 MW) Medium and Small below 50 MW Developer NAREA Private (most probably international) Private (focus on local and small and medium size developers) finances Governmental and soft financing from international development agencies Commercial finance Commercial finance Tariff Setting Proposed by Egypt era and approved by the cabinet of ministers According to the bid outcome proposed by Egypt era and approved by cabinet of ministers Contracting 20 years Long term PPA mostly for 20 years years Off taker Grid Grid or distribution system O/M NAREA Developer Developer Construction Responsibility NAREA through EPC Developer Developer

22 Measures Adopted for Renewable Energies in the New Electricity Law Guaranteed third party access. Phase 1: Competitive Bids The state owned grid will issue tenders requesting supplying power from renewable energies resources This will be done within the scope of the following criteria: Control the increase in RE capacities with reference to the capacity of transmission system and capacity of the market to absorb. Increase local manufacturing Increase private investment Achieving the lowest possible prices. Provide the investors with guarantees through long term power purchase agreements

23 Measures Adopted for Renewable Energies in the New Electricity Law (Contd.) Phase 2 (after the adoption of the New Electricity Law) Feed in Tariff will work hand in hand with the competitive bids mechanism. International experience has showed that feed-in tariff is more attractive for smaller investors like farmers, cooperatives and private investors. To prevent intersection between the two mechanisms competitive bid will be for large size installations (250 MW wind farm), while feed in tariff will be restricted from small capacities (less than 50 MW installations).

24 Renewable Energy Fund Establishment of RE fund: The fund could cover: Full/partial deficit between the RE cost and market prices Exchange rate risk in case of transferring cost full or partially to consumers. Guarantee of the transmission company payments Financial support to pilot projects. Research and development for RET. The main sources of finance of the fund will include: Subsidy currently given to the fossil fuels used in power generation. State Budget. Donations Investment of the fund money

25 Support of Egyptian Government 1. Central Bank of Egypt will guarantee all financial obligations of EETC under the PAA. 2. Signing long term PPA (20-25) years. 3. Reduction of custom duties from 5% TO 2% for all renewable energy equipment and spare parts. 4. An area of about km2 has already allocated for establishing W.E. projects 5. Signing usufruct agreement. 6. All permits for land allocation are already obtained.

26 Support of Egyptian Government 7. The project will benefit from carbon credit. 8. Preliminary EIA including Bird migration study will be prepared by NREA in cooperation with international consultant and financed by KfW. 9. A general Authority for Investment GAFI provides assistance to all investors through one window operation for obtaining all permits and licenses. 10.The project company shall get license for power generation from Egyptian Electricity Regulatory Agency.

27 Morocco Spain Europe Algeria Western Arabian countries Tunisia Libya EGYPT Turkey Lebanon Jordan Eastern Arabian countries Syria Iraq Arabian Gulf Countries Kuwait Sudan African Countries Ethiopia Saudi Arabia Emirates Oman Bahrain Qatar 27

28 Ministry of Electricity and Energy IPP expansion MOEE/EEHC RE: Gov PP & IPP.. Generation Co.(s) Trans. TSOco. Dis Co(s) MV & LV BOOT(s) UHV HV MV Exports & Imports Independent Merchant Transmission & Distribution ISP(s) EEUCPRA Target market proposed phase four

29 Thanks for your attention