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News Analysis: Egypt mulls energy diversification amid fuels shortage

English.news.cn   2014-04-20 02:00:56

By Mahmoud Fouly

CAIRO, April 19 (Xinhua) -- The shortage of natural gas and the huge energy subsidies provided to large factories in Egypt are behind the recurrent power outages in the most populous Arab country, Egyptian energy experts said.

Egypt has been exporting gas to Israel, Jordan and other countries since 2005, for allegedly below-market prices, which lead the country to suffer shortage of the gas provided for operating power stations.

"Power outages in Egypt started in 2008 when the country had to use diesel for power stations as alternative for natural gas, causing maintenance issues that cost about 10 billion Egyptian pounds (around 1.4 billion U.S. dollars)," said international energy expert Ibrahim Zahran.

Sources at the electricity ministry said power stations in Egypt now generate together 21,000 megawatt instead of the maximum of 24,000 megawatt every day, while consuming about 75 million cubic meters of gas and 25,000 tons of diesel on a daily basis.

However, Zahran noted that the capacity of power generation in Egypt is 30,000 megawatt per day while the amount produced is only 18,000 megawatt, causing the ongoing crisis.

Experts said the country lacks at least 20 percent of the natural gas required for operating power stations and lost about 10 billion dollars from 2005 to 2011 due to exporting natural gas to Israel, Jordan and Spain.

"Solution for Egypt's ongoing energy crisis lies in stopping all sorts of gas exports, properly maintaining power stations, cutting energy subsidies provided to large plants, and using alternative fuel, like coal, to operate power stations," Zahran told Xinhua.

He said the whole world is using coal instead of oil products for power generation now. "There are 1,165 power stations across the world operating by coal and generating 1,200,000 megawatt every day."

Official sources said the energy subsidies will be reduced by 29.2 percent in the new general budget, from 18.3 to 12.8 billion dollars, and the state will introduce smart cards for oil products to face the ongoing energy crisis.

"More than half the energy subsidies go to the rich and factory owners, represented in cement, steel, ceramic and fertilizer factories," Zahran told Xinhua.

The expert argued that since they sell their final products to Egyptians or export them at international prices, they should get energy for international prices too instead of subsidies, insisting that halting such subsidies would save the state billions of dollars.

Hamdy Seif al-Nasr, former chief of nuclear authority in Egypt, agreed with Zahran that coal is the best and fastest option for Egypt to use as fuel for power generation.

He cited that the United States, China, India, Southeast Asian countries and most European countries use coal for power generation while observing the international standards for environment protection.

"There are three types of coal-based power stations -- ordinary ones, clean coal power stations and super clean coal power stations. Egypt can go for the second type due to the high cost of the third," Nasr told Xinhua.

The expert added that coal can be safely used in new stations to be established in desert areas as long as the international environmental standards are met, responding to concerns voiced by many officials and activists.

He recommended also nuclear power stations as clean and fast source of power generation, arguing that coal is the best, fastest and cheapest option for Egypt to deal with energy crisis until a nuclear station is established in the country, which may take 10 years to come to being.

"If we use nuclear stations, power generation will be increased by 30 percent," Nasr said, noting that Egypt can not use solar or wind power stations for the time being due to their extremely expensive technology.

Although energy and industry ministers see coal as a key solution for the crisis, environment minister said Egypt lacks coal resources and does not have the seaport infrastructure required for its importation, transport, storage and distribution. The tourism minister also said "coal and tourism do not conform."

Editor: Mu Xuequan
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