Increasing demand for energy by industry and reduced subsidies on the electricity provided to factories are important reasons behind looking for further renewable energy sources. Solar power is promising because of Egypt's advantage in terms of sunlight and the recent reduced cost of the technology. Solar power is a promising energy source for the industrial sector in Egypt and factories can reap its benefits, regardless of the types of products they manufacture, according to Hassan Abul-Ata, an industrial sector engineer at the Federation of Egyptian Industries Office for Environmental Compliance and Sustainable Development (ECOSD). “For the first time in Egypt there are five factories getting ready to integrate solar power in their energy systems for heating and electricity generation,” he said. The conversion of sunlight into electricity is done either directly using photovoltaic cells (PVCs), which convert light into electric current, or indirectly using concentrated solar power (CSP), which uses mirrors to focus energy from sunlight and turn it into heat to create steam that can be used to drive turbines generating electric power. To generate one kilowatt per hour (kWh) of solar energy through PVCs, eight to ten square metres of PVCs are required, and the investment cost is between LE8,000 and LE10,000. The present cost is relatively low compared to previous years when solar technology was still very expensive. “In the long run, industries using solar energy will save money and become more environmentally friendly,” Abul-Ata said, adding that they can even benefit from the feed-in tariff system to sell excess power generated from renewable resources to the Ministry of Electricity and Energy (MOEE). Through the feed-in tariff, the ministry buys electricity generated from solar PVCs and windmills at LE0.96 per kWh. The feed-in tariff is a special pricing system whereby the government is obliged to buy electricity generated from new energy installations by the private sector at a fixed tariff. It has resulted in solar photovoltaic and wind projects that will add a capacity of 4,300 MW to the system by 2018. Egypt aims to make the share of renewables in the electricity grid's capacity reach 20 per cent by 2022. Current capacity is more than 37,000 MW, with maximum consumption recorded last summer at 28,000 MW. According to the Egyptian Electrical Utility and Consumer Protection Regulatory Agency, energy-intensive industrial consumers pay LE0.54 per kWh during peak consumption hours, which start at 6 pm and last for four hours. Otherwise, the cost is LE0.36 per kWh. Industries consuming less than 500 kWh pay LE0.37 during peak hours and LE0.24 at normal times. These prices are increasing yearly as part of the government's plan to gradually remove subsidies on energy. The energy subsidies bill is about LE61 billion for this fiscal year, compared to over LE100 billion in the 2014-2015 fiscal year. Factories that consume more than 500 kWh of electricity are listed by MOEE as energy-intensive and pay more for their electricity supply, Abul-Ata said. The ECOSD encourages factories that are slightly over the 500-kW point to install solar panels through which they can power devices that require a relatively small amount of electricity, such as lighting and air-conditioners. By doing so, total electricity consumption can stay below 500 kW, allowing the factories to buy electricity more cheaply since they will not now be considered energy-intensive. Natural gas prices are also rising in Egypt, and there have been shortages. These have affected electricity supplies to industry, causing factories to lose money as a result of halts in production. Since 2011, economic difficulties following the 25 January Revolution have led to shortages in the natural gas supply to electricity power stations, causing power outages across the country, especially in summer when consumption reaches peak levels. Gas supplies were secured last summer, and the power cuts have been scarce since then. Regarding finance for solar projects, Abul-Ata said that the ECOSD offers special loans for industries wanting energy efficient solutions. Such loans can vary from LE100,000 to LE3 million without interest. After the approval of the feed-in tariff last year many factories applied for loans for the installation of solar PVCs and CSP. “Solar energy can be very feasible for industries that use energy mainly for heating, like textiles and food industries,” Abul-Ata said, adding that electrical heating through renewable and sustainable energy came from CSP technology. Martin Scheuerer, commercial director of Protarget, a German company specialising in solar power systems, agreed that solar power can be used for heating, cooling, distillation, water treatment and desalination, in addition to electricity generation. About 40 per cent of total industrial energy demand in the Middle East and North Africa (MENA) region is used to produce steam from heat, he said. Replacing oil boilers with solar boiler systems, he pointed out, could reduce fuel consumption and carbon dioxide emissions by 80 per cent and was a great environmental advantage of CSP. Scheuerer said that Egypt's climatic conditions allow for the economical use of CSP technology, as most of the country enjoys direct solar irradiation. However, the availability of inexpensive land was the key to the economical usage of CSP, he added. He said that CSP projects for electrical generation are more useful on large-scale projects because they cost more to install and required a larger land space. There is currently only one large-scale CSP project in Egypt, and it has produced 140 MW of electricity since it started operation in 2011. According to Klaus Hennecke of the Institute for Solar Research at the German Aerospace Centre, CSP will be an essential part of future energy supplies, especially in countries like Egypt that have solar irradiation almost all year round. However, Hennecke said that for CSP projects to grow in Egypt, a stable framework like the feed-in tariff is needed. CSP is not yet included in the feed-in tariff system, but the MOEE has announced it is currently studying taking CSP into account in order to encourage the private sector to invest in it. CSP is important for Egypt, according to Hennecke, because peak demand for electricity is at night, and heat stored from solar thermal plants can be used to produce electricity and help secure the grid. “This can play an important role in meeting growing energy demand in Egypt,” he said. More than 1,500 MW of electricity generated from solar energy will be added to the grid by the end of 2016, according to Mohamed Al-Sobki, chairman of the New and Renewable Energy Authority. “The potential of solar energy projects in Egypt is great, with a total of 55 gigawatts being generated on Egyptian land that enjoys all-year sun,” he said. Sixty-five per cent of the country's electricity could come from solar power stations by 2050, according to long-term government plans, he added.
