Potential for Local manufacturing of Wind Turbines in Egypt Adel Khalil and Amin Mubarak Cairo University Presented at Wind Energy and Grid Integration Symposium University of Kassel October16th, 2007
Renewable Energy Sector in Egypt A Study by IMC/ERC Global, MENA and National Review of RE Technologies, Markets and Policies. Industrial survey of current and future potential for Manufacturing RE systems. Positioning of RE technologies Future scenario analysis Development strategy and action plan. Role of Research and Development
SELECTED RENEWABLE ENERGY TECHNOLOGIES (RET) Wind Energy Solar Thermal Applications PV Applications Biomass
Investment Learning Curve for Different RETs Technology Summary Cost (kw/$) 2006 2010 2015 2020 2022 Wind Technology (WT) 1400 1200 1100 1000 900 CSP Technology 4500 4200 4000 3800 3200 Hydropower (HYP) 950 850 800 750 750 PV 6000 5500 5000 4300 4000
Costs and Characteristics of Renewable Energy Technologies (Source: IEA) Technology (for Power Generation) Large hydro Small hydro On-Shore Wind Off- shore Wind Biomass Power Geothermal Power Solar PV Typical Energy Costs Cents/kWh 3-4 4-7 4-6 6-10 5-12 4-7 20-40 Solar Thermal (CSP) 12-18
POSITIONING OF RE TECHNOLOGIES ( factors affecting positioning) 1. Average annual growth rate & size 2. Value Added for industry 3. Competition Strength 4. Technology requirements 5. Technology perspective future 6. Technology Maturity 7. Environmental impacts 8. Technology Provisions 9. Implementation Satisfaction
Positioning of Renewable Energy Technologies in Egypt 5.00 Low Medium High H 4.00 7 8 9 Market Attractivene 3.00 2.00 4 5 6 M 1.00 L 0.00 1 2 3 0.00 1.00 2.00 3.00 4.00 5.00 Technology Positioning Wind CSP PV Biomass SWH
Wind Energy Resources Assessment Egypt enjoys excellent wind regime, particularly in the Suez Gulf where the wind speed reaches 10.8 m/sec. The wind atlas for the Suez Gulf Coast shows that the region can host about 20000 MW of wind farms. Economic Potential 90 TWh/Y
Wind Farms in Egypt Zafarana, Gabal El Zeit, Hurghada 230 MW implemented 320 MW under implementation 850 MW planned by 2010
Wind Energy System Costs Feasibility Study Development Engineering Turbines Balance of plant 0% 20% 40% 60% 80% Portion of Installed Costs
Value Chain Analysis R&D&D Egypt SWOT (compared with international best standard) Component manufacturing VA in % of RET life-cycle cost Cost reduction potential Egyptian share of VA, SWOT Potential for Increase in Eg. share RET system manufacturing VA in % of RET life-cycle cost Cost reduction potential Egyptian share of VA, SWOT Potential for Increase in Eg. share Sales & installation VA in % of RET life-cycle cost Potential for cost reduction SWOT After- Sales Service VA in % of RET lifecycle cost Cost reduction potential Egyptian share
Potential of Egyptian Industry for RE Local Manufacturing A) Local manufacturing B) Research and Development needed C) Technology Transfer/Joint Ventures/Import
Wind Energy Systems Component A B C Tower X Blade X X Yawing system X X Gear-box X X Generator X X Control systems X X Cables X Transformers X X Auxiliaries X X X Operation and maintenance X X
Potential Share of Local Manufacturing Technology Wind energy Solar water heaters Photovoltaic systems Biomass Concentrated solar power Reactive Policy 40% 70% 20% 50% 30% Pro-active Policy 65% 95% 30% 95% 50%
SCENARIO ANALYSIS Reference scenario (liberated fuel cost) Low scenario (MOEE Plan) Med. scenario (RE: 15.5% of inst. Electric power and 10.8% of Elect. Energy Generation by 2022) High scenario (RE: 22.3% of inst. Electric power and 16 % of Elect. Energy Generation by 2022) Scenarios can also be classified as Reactive scenario (business as usual) Proactive Scenario
Projected Power Generation Costs versus RESPG Costs
Power Generation Needs and Recommended Energy Technologies High Scenario Installed Capacity (MW) 60,000 50,000 PV Hydropower (HYP) CSP Technology Wind Technology (WT) Thermal Power Plants (TPP) High Scenario 40,000 30,000 20,000 10,000 - TPP WT CSP HYP PV Renewables wo HYP Installed Power Sharing 2005 2010 2015 2020 84.4% 82.6% 75.1% 70.7% 0.8% 6.5% 13.7% 17.8% 0.0% 0.6% 2.0% 3.9% 14.8% 10.3% 9.2% 6.9% 0.0% 0.0% 0.0% 0.7% 0.8% 7.1% 15.7% 22.3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year
Energy Generation Needs and Recommended Energy Technologies High Scenario Generated Energy (GWh) 300,000 250,000 PV Hydropower (HYP) CSP Technology Wind Technology (WT) Thermal Power Plants (TPP) High Scenario 200,000 150,000 100,000 50,000 - TPP WT CSP HYP PV Renewables wo HYP Energy Sharing 2005 2010 2015 2020 87.0% 86.0% 80.3% 77.5% 0.5% 4.6% 10.1% 13.4% 0.0% 0.3% 1.2% 2.4% 12.5% 9.1% 8.4% 6.5% 0.0% 0.0% 0.0% 0.3% 0.5% 4.9% 11.3% 16.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year
Evolution of Installed Wind Technology in Power Generation of Egypt MW 12,000 10,000 High Scenario Medium Scenario Low Scenario 8,000 6,000 4,000 2,000-2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year
Local Manufacturing Investment, R&D, and Market Volume for Wind Technology (million US$) Scenario WT 2006-2010 2011-2015 2016-2022 Total Market Volume 2,032 3,857 5,208 11095.88 Share of Local Manufacturing 55% 65% 75% Investment in Manufacturing Processes 750 931 1,689 3,370 R&D Investment 23 28 51 101 Market Volume 1,547 2,233 4,061 7,840 Share of Local Manufacturing 55% 65% 75% Investment in Manufacturing Processes 571 402 1,641 2,614 R&D Investment 17 12 49 78 High Medium Low Market Volume 891 1,119 1,389 3,399 Share of Local Manufacturing 55% 65% 75% Investment in Manufacturing Processes 329 159 540 1,028 R&D Investment 10 5 16 31
Projected Power Generation Costs and Loss in Revenues from CER and Gap Costs
Projected Additional Revenues Due to RETs Implementation in Power Generation High Scenario (million US$) CER Costs Gap Costs Year 2006-2010 2011-2015 2016-2022 WT 60 290 902 CSP 4 33 155 HYP 5 20 105 PV - - 19 Total 69 344 1,180 Annual Average WT 581 2,461 94 7,164 CSP 38 283 1,231 HYP 48 170 835 PV - - 148 Total 667 2,914 9,378 Annual Average 762
Development strategy targets To achieve 22.3 %RE target by 2022, a proactive policy to promote RET should be adopted. Installation of 10335 MW of wind Energy (WE). Installation of 2550 MW of concentrated solar power (CSP). Installation of 500 MW photovoltaic (PV) arrays. Installation of 1.2 million sq.m of solar water heaters (SWH). Saving of 4 million ton oil equivalent by utilizing biomass. Acquiring 0.5 % share of European Union RET market by 2012 which Represents 0.625 billion US $ manufactured components of RE systems. These estimates are based on the high RET scenario and the EU RET market of 100 billion Euros.
Strategy for Manufacturing Renewable Energy Equipment (Objective: 23 % RE Inst. Power share by 2022) Component 1 Financial Instruments Component 2 Research, Development and Innovation Program Component 3 Legislations for Feed in Law and Feed in Tariff Component 4 Market Enhancement and Infra-Str Development Component 5 Information Service, Awareness and Capacity Building Strong Sustainable National Industrial Program for Local Market and Export of RE Equipment and components
Removal of Barriers To Rets Implementation In Egypt Economic & financial barriers, Awareness & information barriers Technical barriers Market barriers Social barriers Institutional & policy barriers
Financial Instruments Soft Loans Commercial loans Revenue bonds Ownership certificate Developing RE Projects as CDM-Projects RE fund
Innovation R&D program Fostering Innovation Culture Establishing A Framework Conductive To Innovation Gearing Research To Innovation National research plan including solutions to problems facing the five selected RETs Establishing a center of excellence for RET
RCREEE-Activities Think Tank (RE-policies & instruments Regional cooperation & Cross-regional Cooperation) Management of Regional R&D&D Programs for RE RCERE RE-Training Courses & post-graduate RE-education RE-Information Services Testing & Certification
RCREEE-Target Groups Private Project Developers Manufacturers of RE- Technology Consulting Firms RCERE Government Policy Makers Students Service Providers (Installers, O&M)
RCREEE as Network of Institutions ANMEA Tunisia.. Yemen Centre de Développement de l Énergie Renouvelable Marocco RCREEE.. Lybia.. Algeria.. Syria.. Jordania
Tailored Legislation Objective: The creation of a legal, institutional and incentive framework to stimulate and support large scale annual investments in RE in fulfillment of Government policy objectives for the energy sector: Scope: Feed-in Law and Feed in Tariff in order to secure the RET market Liberation of fuel prices Removal/reduction of taxes and duties RE Incentives
Information Service, Awareness and Capacity Building Program Awareness and promotion programs such as: demonstrations of systems, brochures, training courses, Workshops, seminars and presentations for targeted users. School/University educational materials
Action Plan for Wind Technology
RENEWABLE ENERGY FUND This fund can cover the gap between RE feed in tariff and the average price of generated electricity by thermal power plants. The RE fund could finance R&D for RETs systems and their components design for local manufacturing activities. Cost savings resulting from electricity generation by hydropower plants as compared to thermal power plants, could also finance the deficit for feed in tariff and R&D for RETs if any.
Expected savings in fossil fuel resources and emission reduction due to the implementation of the action plan for local manufacturing of RET systems and components. High Scenario Medium Scenario Low Scenario Technology of Power Generation Anticipated Savings TOE (million) CO 2 (million tons) Anticipated Cost Savings (million US$) Opportunity Cost for Export Certified Emission Reduction Anticipated Avoided Subsidy (million US$) *Business as Usual **Fuel Prices Liberation to close the Gap Generated Energy via RET (million kwh) Wind 67 179 17,299 1,789 13,311 5,292 293,608 CSP 10 27 2,656 275 2,043 751 45,070 PV 1 3 258 27 199 62 4,380 Total 78 209 20,213 2,090 15,553 6,105 343,059 Wind 46 122 11,830 1,223 9,103 3,648 200,776 CSP 7 17 1,680 174 1,293 485 28,514 PV 0.6 1.5 142 15 109 34 2,409 Total 53 141 13,652 1,412 10,505 4,167 231,699 Wind 22 59 5,728 592 4,408 1,840 97,222 CSP 4 10 975 101 751 283 16,556 PV - - - - - - - Total 26 69 6,704 693 5,158 2,123 113,778
Decree by the Supreme Council of Energy (10/4/2007) Strategy to reach 20 % of generation capacity from renewable energy by 2020. The strategy includes a plan for local manufacturing, legislations to encourage investments in RE, plan for tendering and electricity market liberation.