On 10 August, the government of Prime Minister Mustafa Madbouli announced a plan to rationalise energy consumption nationwide, seeking to save 15 per cent of the natural gas used in processing power stations.
The country seeks to save large amounts of gas to export and to get foreign currency amid the global crisis that all countries around the globe are currently facing including an energy shortage that has impacted many European countries, Madbouli said.
The plan includes applying daylight savings time settings in malls which are to close at 11pm, and reducing electricity consumption in government buildings, public spaces and sports facilities, in addition to not setting central air conditioners less than 25 degrees in buildings as well as malls.
Ayman Hamza, spokesman for the Ministry of Electricity, told Al-Ahram Weekly that it is important to note that the plan aims at rationalisation “which does not mean cutting power generation”.
Hamza said the plan includes replacing natural gas used in power stations to produce electricity with mazut, Currently, 60 per cent of natural gas production is used in electricity generation.
“Power stations can be easily run by diesel and mazut. Last October, we tested this and replaced natural gas in power stations with mazut, and it saved us 100,000-150,000 per month,” he said.
The electricity sector buys natural gas from the Petroleum Ministry for $3 every MBtu whereas it is exported for more than 30 per MBtu. Thus, economically speaking it is better to export it and receive hard currency, Hamza said.
Egypt has an electricity surplus of more than 25 per cent and is self-sufficient in natural gas.
After achieving self-sufficiency in natural gas in 2018, Egypt sought to use its position on Europe’s doorstep to become a major supplier of liquefied natural gas (LNG) to the continent, which is transitioning away from other fossil fuels.
This is based on Egypt’s huge gas discoveries and production in recent years, most notably the giant Zohr gas field off the Mediterranean. The gas field holds an estimated reservoir of 30 trillion cubic feet (tcf) of gas.
Speaking on the already existent surplus, Hamza said that it is a must to have reserves to meet the country’s demands, which allows the electricity sector to utilise the most efficient units and rely on clean resources. By global standards, there should be a surplus of around 25-35 per cent, according to the spokesman, so Egypt having a 25 per cent surplus is only natural, he added.
The new power-saving decisions, according to Hamza, will not lead to more price hikes in the sector. On the contrary, the government already has a plan in place not to raise prices for the coming six months or until the end of the year.
The government said it will postpone any periodic rise in electricity prices to 2023 in an attempt to “alleviate the suffering of citizens” amid high prices.
Economic expert Ali Abdel-Raouf told the Weekly that if Egypt were able to save around 15 per cent of electricity consumed, natural gas exports would increase by roughly $450 million per month or $5.4 billion per year.
Energy expert Medhat Salama Sabek told the Weekly that if the government really wants to rationalise consumption, it should turn to alternative resources and clean energy, adding that Egypt has the capacity to be dependent on other resources to save natural gas.
While most power in Egypt is generated by gas, the country plans to increase the supply of electricity generated from renewable sources to 42 per cent by 2035.
Moreover, according to Sabek, 25 per cent of electricity generated is being wasted during the production process due to inefficient transmission and distribution networks. “The government should work on rebuilding the network and redistributing electricity across the power grid. Reorganising the network will save more than one-fifth of the electricity generated by the grid, equivalent to 60k megawatts,’’ Sabek said.
*A version of this article appears in print in the 18 August, 2022 edition of Al-Ahram Weekly.