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Egypt fixes feed-in tariffs for domestic and commercial renewable energy

After hints from Egypt’s energy regulator that the country was ready to fix feed-in tariffs for renewable energy, the government has approved a pricing structure for consumers and businesses to sell excess power to the grid, local media reports.

Electricity minister Mohamed Shaker told a press conference that tariffs are scaled according to production categories with EGP0.848 (US$0.12) for each kilowatt (kW) per hour produced by households, EGP0.901 (US$0.13) for commercial producers of under 200 kW, and EGP0.973 (US$0.14) for producers of 200-500 kW.

Large-scale projects are calculated in US dollars but will be paid in domestic currency according to the exchange rate at the time of payment, said the minister.

Projects producing 500 kW-20 megawatts (MW) will be paid 13.6 cents per kilowatt per hour and those producing 20-50 MW will be entitled to 14.34 cent per kilowatt per hour.

The government capped projects at 50 MW but said it will consider requests for larger-scale developments.

Financing renewable energy

The finance ministry announced last week it will subsidise the funding of the projects, offering 4 per cent rates for household and commercial productions under 200 kW, and eight per cent for commercial producers of 200-500 kW.

Land will be provided to private investors through usufruct agreements priced at the value of 2 per cent of the electricity produced.

For solar energy projects, land will be offered for 25 years whereas wind energy projects will have 20 years of land use.

Investors will also be charged only 2 per cent customs on material imported for the projects.

Power outages

The setting of feed-in tariffs comes as Egypt has suffered increasingly frequent electricity cuts during the past few years with some Cairo districts seeing up to six blackouts a day during peak hours this summer.

Earlier this month, Egyptian President Abdel-Fattah El-Sisi said that electricity production and distribution were not developed enough to keep up with consumption.

He estimated that Egypt needs 2,500 MW annually for the next five years to meet rising demands, at a total cost of US$12.5 billion.