Egypt’s government is set to discuss establishing an independent entity for the transmission of electricity in a move that would allow private sector participation in the market, so that businesses can sell electricity directly to the consumer at market price, says an official.
The plan is to change the electricity market from the current single buyer model, by which the state-owned electricity transmission company (EETC) operates the national grid by buying the electricity from producers then selling it to consumers at government-subsidised prices.
The cabinet will discuss a new electricity law on Wednesday designed to open up the electricity market to the private sector, Hafez El Salmawy, head of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) told Ahram Online on the sidelines of the Future of Energy in Egypt conference, hosted by Al Ahram and EBA on Tuesday.
Egypt has been suffering from an acute energy crunch as foreign oil companies suspend extraction works on the back of growing arrears as political turmoil rose in the aftermath of a popular uprising in 2011. Parts of the national grid are also in need of renovation.
In September of last year, the government set feed-in tariffs at which it would buy electricity generated by the private sector via renewable energy projects.
Initially, there will be two markets- one competitive and one in which prices are set by the state, but with the gradual liberalisation of electricity prices over the coming five years the competitive market will expand to include more consumer segments.
"It will start with the largest consumers and end with households," said El Salmawy.
Egyptera was established in 1997 to be the regulator and watchdog of all activities of electric power generation, transmission, distribution, and sale.