Emad Hassan* argues that this summer's power cuts highlight the need to rationalise energy consumption No one can deny the fact that the power outages we all suffered this summer were inconvenient, frustrating and simply unacceptable, especially considering that electric bills have steadily risen over the years. No doubt everyone wants to know why this problem is coming back from the past to haunt us though we are well into the 21st century. Instead of arguing over who caused the problem, this challenge should be viewed as an opportunity to start placing demand side efficiency at the heart of Egypt's electricity plan. Regardless of whether the number of air-conditioning units has increased, or heat waves reaching over 40 degrees Celsius persisted for longer periods, or whether there were problems with power generation units and transmission networks, the most important issue is what can be done to avoid future incidents. The facts suggest that next year neither will the demand for electricity shrink, nor will the summer be cooler. Three key trends should be kept in mind when examining Egypt's future electricity needs. First is the fact that growth requires energy. Egypt has enjoyed relatively strong economic growth amid a global downturn, with a growth rate in the upper four per cent even while the rest of the world was struggling to stay afloat. Economic growth means a rising energy demand. So long as the economy continues to grow, demands on energy resources will too. In developing countries, economic growth also comes with an increase in electricity consumption per capita. There is a relationship between economic productivity and energy consumption. Egypt's Energy Intensity indicator of units of energy input to generate $1 of GDP is about 0.51 according to the International Energy Agency . The United States, for instance, shows an energy intensity of 0.21, which means that the US's energy is being used 2.5 times more efficiently than Egypt's. This is a clear indication that there is room to improve the ratio of our energy consumption to our economic productivity. The second consideration is the reality of global warming. Those of us old enough to have experienced the true four-season climate in Egypt can attest to the fact that summers are now getting hotter each year, with the difference between seasons becoming less pronounced. This summer, Egypt had persisting 40-degree weather for several weeks running, instead of days as the case used to be. Maintaining our thermal comfort now comes with a higher demand on air-conditioning. Recently announced figures about the number of air-conditioning units in Egypt showed the number jumped from 600,000 in 2006 to three million in 2010. This is a real testimony that summers are getting warmer and longer, and it is only reasonable to expect that this trend is likely to continue. The third factor is that Egyptian households are becoming more technologically advanced. Not too far back in the past, a typical household in Egypt had much less electrically operated equipment than today, and smaller segments of the population lived in urban areas with a lower dependency on electricity than today. A typical family owned one television set, at most one window air-conditioning unit (1 HP), and a refrigerator, and wall electric sockets could host one or two pieces of equipment. Now, if we take a quick look around a typical urban home, the number of electrical appliances has grown more quickly than the building industry can accommodate. Multi-socket adaptors are now part of most urban households, as families look for ways to accommodate the growing number of electrical appliances and devices that they use. The young average age of the Egyptian population is also an important element to consider in the planning phase, as the younger generation is more likely to use new technologies, most of which depend primarily on electricity. In all, our needs are growing as electricity enters more and more areas of our lives and as our average income increases. But development comes with a price. Current trends boil down to one reality: demand on electricity is likely to grow at rates that surpass the current ones, and Egypt needs to increase its demand side efficiency to face this challenge. The managed power outage approach Egypt witnessed this summer is not new, neither is it specific to developing countries. It is a tactic used by many electrical utilities around the world to face the challenge of demand exceeding supply during peak periods. When utilities face these challenges and the supply-reserve margin is exhausted, they resort to what is known as a rolling black-out. They switch off certain areas in a sequential pattern to control the demand below the system's capabilities. It is not a desirable solution by any means, but a last resort. So the question is then, why can't officials forecast future electricity needs and build the necessary generation to match and even exceed them by a margin? The answer is not simple, given that demand on electricity will continue to grow. Building a power generation facility takes a long time, typically between three and four years from the early planning stages until the facility is operational. It is also costly, both economically and environmentally. A typically sized gas-fired power station delivering about 650 megawatts would cost between $650 and $800 million, and would emit to the atmosphere a significant amount of greenhouse gases, which are among the main causes for global warming. To clarify the situation further, the problem lies in establishing a supply and demand balance during peak periods, and is not just a matter of over-consumption. The summer electrical peak in Egypt typically happens in August at 8-9pm, and usually extends for two to three hours. Residential consumption is at its highest at these hours with air-conditioning constituting the main load. Street lighting, commercial retail outlets and multi-shift industrial establishments are also key contributors to the demand crunch. With the supply and demand challenge experienced for a few hours each day in the summer, the option of building additional power plants is simply not economically feasible. This would tax the economy instead of supporting its growth. Egypt's energy policy has for a long time been supply-side oriented, with a focus on providing power to all consuming sectors, despite the fact that the government was bearing the cost difference between production and subsidised end use prices. Demand side efficiency is a less expensive option that could meet some of these demand crunches. It is more cost-effective to reduce peak consumption and shift some of the less critical loads to non-peak hours than building power plants. All end-use sectors should be reviewed for potential efficiency gains including housing, commercial establishments, street lighting, government buildings, industrial facilities and agricultural use. Furthermore, energy indicators should be set for each end use with a plan to move these indicators towards efficiency over time. Indeed, there is much to be done on the demand side. To mention a few of the necessary measures, enabling demand side efficiency pricing schemes should be introduced to alter consumer behaviour. Other incentive mechanisms and mandatory regulations can be used to encourage demand side efficiency. The use of natural gas air-conditioning in homes and in commercial establishments, solar energy for water heating and other domestic use, LED lighting for streets and public areas and industrial efficiency for large and multi-shift operations should be pursued in the various stages of long-term planning. Experts in the field of energy efficiency and demand side management would agree that the annoying summer 2010 power outage incidents came like spark to ignite the need to increase demand side efficiency. End-users and policy makers understand that the challenge is unlikely to go away, and that quick supply side solutions cannot be sustainable. There is an opportunity here to be seized to raise demand side efficiency both for the existing consumer base as well as for future growth. A well designed integrated programme for demand side management should be a priority item in the energy policy framework. Such a programme should include a national awareness campaign educating the public as to what options they have to reduce or alter their electric consumption patterns. In short, the recent summer power outage problem gives us an incentive for the long-awaited push to increase energy efficiency and to give it pride of place on Egypt's energy policy agenda. * The writer is energy efficiency advisor at the Cabinet.
