Siemens aims to boost economy through power plants

Daily News Egypt speaks with the German company's CTO about its new electricity generation projects in Egypt

Siegfried Russwurm is chief technology officer of the German technology company Siemens, which is among the global leaders in electricity generation solutions.
Earlier this year, Siemens signed an agreement with the Egyptian government to build three combined-cycle gas-fired power stations, promising a significant contribution to the national electricity-generation plan. The company is also planning to build wind-power plants in Egypt, helping to support the energy diversification effort.
Russwurm spoke with Daily News Egypt about the Munich-based company's plans for investment in the Egyptian energy sector.
Tell us more about Siemens' energy projects in Egypt?
As Joe Kaeser, CEO of Siemens, said during the Innovation at Siemens conference, Siemens' projects in Egypt are a perfect example of the company's business-to-society approach. Through these three power plants, located at Beni Suef, Borollos and the New Administrative Capital, Siemens will significantly increase Egypt's power-generation capacities by adding an additional 14.4 GW to the national grid, supporting the country's rapid economic development and meeting the power needs of its growing population. On top of that, we have agreed to add an additional 2 GW worth of wind-power plants.
We are currently building the gas-turbine-equipped power plants with our local Egyptian partners, in close cooperation with the Ministry of Electricity and the Egyptian Electricity Holding Company as the owner and operator of the project.
I just came back from a visit to Egypt, where I met our project manager in charge of these mega projects. During our meeting, he told me about the excitement, but also about the challenges in connection with building these plants, which will be the largest gas-fired combined-cycle power plants in the world when completed.
For example, he told me that in order to build each of these plants 400,000 tonnes of various material and equipment have to be shipped from different locations.
However, we believe that the solid cooperation between all local and international stakeholders is the cornerstone of building these power stations within such a tight timeframe.
The Egyptian president and the Minister of Electricity have mentioned negotiations with Siemens aimed at reducing power station costs. How do you view these negotiations, and do they affect Siemens' profit margin?
It appears to be common knowledge that the Egyptian president has good negotiation skills. However, the price of the power station is not the decisive factor. Rather, it is our commitment to supplying the country with much-needed electricity supply to power its long-term economic development.
We were impressed with president's determination to provide reliable and sustainable power supplies to the Egyptian people and businesses, out of his belief that providing these supplies is essential to power development projects and boost efficiency in different economic sectors.
The president understands the pivotal role played by energy in the prosperity of society. This was clear from his involvement and engagement, along with Electricity Minister Mohamed Shaker, in all the project's negotiations and discussion steps. But please understand that, in principle, I cannot comment further on any negotiations.
We are committed to supporting the country, and our objective is to establish a reliable, eco-friendly and affordable energy supply.
What are the technologies applied in operating these power stations, and what is your timeframe for implementation?
The three new stations will each be powered by eight so-called "H-Class" natural-gas turbines from Siemens. These turbines are selected for high productivity and efficiency. The plants will also re-use hot gas exhaust in producing steam to drive steam turbines for additional electricity production in the attached generators. This is the state-of-the-art technology in the power-generation industry.
The first units, in the three power plants, will start supplying power to the grid in the winter of 2016/2017, in so-called "open-cycle" configuration.
Transmitting massive amounts of generated electricity will be another challenge. We need to develop and increase the capacity of the national electricity network to absorb and distribute the enormous amounts of energy from where it is generated to where it is needed. Discussions on this matter with the Egyptian Ministry of Electricity are ongoing.
Our experienced experts are continually analysing Egypt's energy system. Therefore, we are sure of our ability to support Egypt in its goals along with our local partners.
In your opinion, how will Siemens' projects affect the local energy sector and the Egyptian economy in general?
We are totally aware that each generated megawatt will have a positive impact on the economy. Secure energy supply is a must to Egypt, not only to overcome the hot summer months, but more importantly to meet the growing demands of different industrial sectors and businesses in Egypt. Nobody wants to lose air-conditioning during a hot summer night due to a blackout. But the consequences for industry could be much more severe.
A 10-minute power cut can severely damage product quality, leading to many defects in manufacturing processes and harming the manufacturers' competiveness and profitability.
Therefore, Siemens' power projects in Egypt support the country's economic development through supporting local industry and national projects.
What about training and building Egyptian technical staff in this field?
We are currently cooperating with the Ministry of Electricity in training the trainers who will provide the training to Egyptian engineers and technicians. As I speak with you right now, preparations for that training are taking place in Berlin, covering different aspects of power production, turbine operation, and maintaining and improving the efficiency of current power stations in Egypt.
If anything sets Siemens apart from other international companies, it's that we at Siemens are always committed to know-how transfer, education and localisation.
Could you provide more information about Siemens' wind-energy projects?
As per the agreements between Siemens and Egypt, Siemens will build up to 12 wind farms in the Gulf of Suez and West Nile areas, comprising around 600 wind turbines with an installed capacity of 2GW. Each wind farm will have electricity generating capacity of between 100 MW and 200 MW.
We are currently looking into the first projects in cooperation with the electricity ministry and the New and Renewable Energy Authority (NREA). Once we have more details, we will share them with you.
In addition, Siemens will establish a rotor-blade manufacturing facility in the Ain Sokhna region. This factory will not only be the first in Egypt to produce wind-energy technology, but also the first in the Middle East, leading to fast transfer of know-how for wind technology. We will celebrate the groundbreaking of the factory in early 2016.
What is the price of energy generated by these farms? Some renewable energy companies complain that the purchase price is in EGP, while the components and equipment are purchased and supplied in foreign currency.
The NREA will have an agreement with the EETC (Egyptian Electricity Transmission Company) for the purchase price of electricity generated from the wind farms. Egypt owns huge potentials of wind energy. Undoubtedly, expanding these farms will diversify the energy mix and secure the future energy needs.
Are you participating in improvements to Egypt's existing power stations?
The government has offered various opportunities to develop the existing power stations in the country. Siemens is certainly participating in the modernisation in a couple of power plants, for example, the Attaqa steam and Damietta combined-cycle plants.
Have you faced any particular obstacles while implementing these projects?
We are at the beginning of these enormous projects. It is clear to everyone that these are very ambitious. Therefore, it is necessary that all partners work together in close cooperation. With the government having a clear goal of boosting the Egyptian power supply, our local partners and our experience as an Original Equipment Manufacturer (OEM), we are confident that we will have a great success.
Of course, there are technical complexities inherent to the construction of power plants, such as pumps, high-pressure pipes and the other major components. But for us, that's not rocket science – we have the know-how. Transferring and shipping these components is a challenging process that involves many logistical details.
Recently, I came to know that Beni Suef station lies several metres higher than Nile level. This means we must transport materials and then raise them upwards using special equipment, with the help of specialised international experts. The same applies to the Borollos and New Capital plants.
Do you think that the terrorist threats witnessed by the Middle East will threaten your investments in the region?
The security and safety of our employees who work in locations all around the world is Siemens' highest priority. Concerning the Middle East, we cooperate with the local authorities in every country to ensure the safety and security of our employees.
We monitor the current conditions and developments in cooperation with our local partners while we are working on our energy projects, which will benefit the Egyptian people and economy. However, we take precautions to avoid such hazards and protect our employees.
What are the other Egyptian sectors in which Siemens participates?
We are currently helping to develop systems and solutions for the Egyptian National Railways through developing the signal systems to ensure railway safety and security. In addition, we are working on strengthening and increasing the capacity of the national electricity network, providing automation and digitisation solutions to industrial and healthcare sector solutions.