Energy Efficiency Improvement & Greenhouse Gas Reduction Project

1. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Energy Efficiency Policy in Egypt and its perspectives Dr. Ibrahim Yassin

2. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Energy Efficiency Improvement & Greenhouse Gas Reduction Project Contents • Introduction & Organization Chart • Long Term Policy & Overall Objective • Project Activities • Component 1: • Loss Reduction & load Shifting in the • Unified Power System (UPS) • Component 2: • Energy Efficiency Market Support • Component 3: • Cogeneration

3. Reduce Transmission Losses 0.17 MTOE Set Priorities for Dynamic Response of Generating Unit. Energy Savings Network Analysis & Control Strategies CO2 Load Shifting through (TOU) Tariff 0.48 MTons Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR LOSS REDUCTION, LOAD SHIFTING AND LOAD MANAGEMENT IN THE UPS

4. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR The project target is to reduce the transmission losses of the UPS from7% – 5%, reduce energy consumption by0.17 MTOE and 0.48 MTons of CO2.

5. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Improving Network Losses Measurement Capability • The project has set a plan for calibration and maintenance of measuring devices in order to get accurate measurements of losses. • All measuring devices of the power sector have been calibrated using the high accuracy (0.01%) calibrating equipment procured by the project. • Capacity Building for engineers and technicians to improve their capability in the field of measurements, and calibration.

6. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Improve Dynamic Response of all Thermal Stations: • Measuring dynamic response of all thermal stations (37 units) with a total power of 10,000 MW • Assessment of dynamic response of generating units based on original specifications and take mitigation actions to improve their performance. • Tuning of 24 units to work under Automatic Generation Control (AGC) • Capacity Building of engineers and technicians from control centers and power plants.

7. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Improve Transmission Losses through Network Analysis and Control Strategies: • Maximum use of reactive power of the generating units. • Improve the power factor through installation of capacitor banks at selected locations. • Optimization of network planning by using the up to date software program “Optimum Power Flow (OPF)”.

8. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Percentage Losses for the period 98-2007 Up to 33 K.V Percentage %

9. Fuel Saving and CO2 Reduction • All these activities lead to a reduction of percentage losses to reach 3.68% by year 2006/2007. • Accumulated Fuel Savings from the start of the project in 1999 up to year 2006/2007: 3.2 MtOE. • Accumulated CO2 reduction from the start of the project in 1999 up to year 2006/2007: 9.59 MTons

10. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Load Shifting using Time of Use (TOU) Tariff • Carrying out study with different scenarios of TOU tariff. • Implementing a pilot load shifting project at a cement factory. • Implementing Integrated Resource Planning Study for the cases of distribution companies ( Alex, Canal, Cairo and Delta South). • Training of 160 engineers from Electricity sector on Integrated Resource Planning (IRP), Demand Side Management (DSM) and Load Shifting. • Study options for Incentive to encourage load shifting.

11. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Adoption of TOU Tariff • The electricity sector is analyzing the different scenarios to select the optimum adoption for Time of Use tariff

12. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Industrial Customers Load Shifting • Until the TOU tariff adopted, a pilot project has been implemented to demonstrate the effectiveness of applying this tariff. Daily load curve of Beni Suef cement company    • The cement industry is a heavy consuming one therefore the pilot project was implemented at Beni Suef Cement Company where 4 MW representing 20% of the company peak load has been shifted from the system peak load.

13. 80 Energy Efficiency Industry Support 2.95 MTOE Energy Standards & Labeling Energy Savings Energy Codes for New Buildings CO2 Energy Efficiency Center 8.25 MTons Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Energy Efficiency Market Support

14. 80 Obstacles preventing Implementation Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Energy Audits • Total of 190 energy audits using 10 different technologies have been accomplished in industrial and commercial facilities (200 target). • Training of 60 engineers in the field of energy audits. • 20 audits only have been implemented. • Under capitalized ESCO (problems to access to finance). • Unfavorable lending terms. • High prices of efficient equipment. • Exchange rates of the currency led to reduction of the economical attractiveness of the E.E. projects. • Unchanged prices of electricity (highly subsidized energy prices).

15. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Project Initiatives to face these obstacles: • Study for the reduction of custom duties of two selected equipments : CFL from 30% to 5% and efficient motors from 30% to 10%, ( not yet approved). • Undertake a program for the diffusion of CFL by the DCs through replication of the leasing program. • Encourage the private sector to manufacture CFL locally (4 factories were established). • Public awareness program for the diffusion of efficient lamps which led to the increase of the market size of CFL from 434 million/2001 to 4 million/2007 • Encourage NGOs to implement energy efficiency projects.

16. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Development of Egyptian Market for CFL’s 2000 To 2007 4 Million No. of CFLs Year

17. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Decrease of price lamp from 1999-2007

18. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Loan Guarantee Program • EEIGGR project has developed a new scheme for the loan guarantee mechanism to provide the necessary finance for the energy service companies (ESCOs) through providing guarantee to these companies to get loans from the banks. • An agreement has been signed between the Egyptian Electricity Holding Company and the Credit Guarantee Company and an approved list of projects are expected to benefit from this mechanism.

19. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Loan Guarantee Program • 7 ESCOs have been selected and energy efficiency technologies have been adopted which can payback in less than 3 years. • It is required to leverage additional funds to facilitate implementation of large size projects.

20. Egyptian Sustainable Loan Guarantee Mechanism Technical Support 100% loan guarantee Partial guarantee (50-70%) Bank CGC EEIGGR Reporting Loan Loan payment Registration Techno-economical feasibility Subcontracted Legal, accounting and administrative support ESCO ECC EEIGGR: Energy Efficiency Improvement and Greenhouse Gas Reduction project CGC: Credit Guarantee Company ESCO: Energy Service Company EEC: Egyptian Consulting Center Installment EE Project END USER Marketing

21. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Cooperation with NGOs • Cooperation with GEF Small Grants Program (SGP) to assist 7 NGOs in financing energy efficiency lighting programs. • Promoting the use of efficient lighting equip. many demonstration application have been executed at different locations: • Some street lighting, in Cairo and Alexandria; • Headquarter offices, • garage and some offices • in EEHC building • (total of 620 lamps); • Electricity compounds • and power plants in Cairo.

22. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR • Within the cooperation with NGOs training of 60 electric technicians and lending them money for buying and mounting CFL and electronic ballasts to customers thus their increasing awareness • Application of leasing program for CFL (revolving fund) in Cairo, Alexandria and Beheira DCs

23. 80 Public Lighting and Governmental Buildings Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR • Public lighting and governmental buildings consumes 7%and 5.%% respectively. Two important studies were carried out: • Energy efficiency opportunities in governmental buildings, • Public lighting energy efficiency through the use of efficient lighting systems.

24. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Energy Efficiency Initiatives in Governmental Buildings • Study recommendations: • Short term recommendations: Appointment of an energy manager for each governmental building in addition to awareness programs • Medium term recommendations : Implementing retrofits of the current governmental building facilities especially for the lighting system, in addition of improving power factor for these buildings. • Long term recommendations: Developing governmental procurement guidelines to take into consideration energy efficiency concept. This stage will rely on the results and experience gained from the medium term recommendations.

25. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR • The Ministry of Electricity and Energy has taken the initiative of starting by its own buildings. • The electricity distribution companies started already implementing energy efficiency measures in their administrative buildings where real savings have been achieved Energy Efficiency Initiatives in Governmental Buildings

26. Implemented Power Projects in Governmental Buildings

27. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Expected Energy Savings from Governmental Buildings • The governmental buildings consumption for year2005/2006 is 4206 GWh representing 5.5% of the total consumption and costs 842 M L.E. (tariff is 20 pts /KWh ) • The equivalent fuel consumption is 2.05 MtOE and the CO2 emissions is 6.1 MTons. • Saving 10% of this consumption means saving: 0.2 MTOE,0.61MTons of CO2 and 84.2 ML.E • National program for extending this activity is required to increase the savings with considerable value.

28. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Expected Energy Savings from Public Lighting • The public lighting consumption for year 2005/2006 is 6489 GWh representing 7% of the total consumption and costs 2.14 Billion L.E. (Tariff for public lighting is 33.1pt /KWh) • The equivalent fuel consumption is 3.16MtOE and the CO2 emissions is 9.5 MTons. • Saving 10% of this consumption means saving: 0.3 MTOE, 0.95MTons of CO2 and 214 ML.E

29. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Expected Energy Savings from Both Governmental Buildings and Public Lighting • Annual savings realized from just 10% of the consumption: • 0.5 MTOE • 1,56 MTons of CO2 • 300 M.L.E. • Legislations are needed at the national level to apply energy efficiency measures in each governmental buildings. • Coordination with the local authorities to use efficient lighting system

30. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Energy Efficiency Labels and Standards: • A ministerial decree of the Minister of Industry was issued for applying the specifications and the energy efficiency labels for three selected appliances (Refrigerators, air conditioners and washing machines). Accredited Energy Efficiency Testing Laboratories have been erected at New and Renewable Energy Authority premises: • The Testing lab. for Refrigerators, Washing Machines has been completed • The Photometric Testing Lab. for Efficient Lighting Equipment has also been completed • The testing lab for Air Conditioners will beready by end of 2007.

32. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Refrigerators and Washing Machines Energy Efficiency Testing Labs. atNREA Component 2 EEIGGR Energy Efficiency Labels and Standards:

33. Energy Efficiency Improvement & Greenhouse Gas Reduction Project

34. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR The electricity savings are calculated based on energy consumption of the current appliances’ models as well as the Egyptian energy efficiency standard limits for the years 2003 and 2005. Energy Savings from Labels and Standards Program:

35. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Residential energy pattern consumption survey reveals that: • Lighting loads represent the highest energy consuming application with around 34% of the total consumption followed by the refrigerators 22%, washing machines 18%, and air conditioning 12%. • Since the residential consumption is 36% out of the total consumption, than the consumption of the three selected appliances represents around 15% of the total energy consumption • Starting by a saving of 10% from the use of efficient electrical appliances, the following could be achieved: 0.05 MTOE 0.15 MTons of CO2

36. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR • Legislation for checking label presence in the shops and enforcement steps of gradually increasing severity. • Propose a program for the incentives and penalties regarding the commitment towards the developed standards and labels. • Set a strategy and recommendation plan to ensure that local manufacturers will be able in the future to produce and (or) assemble appliances in compliance with the Egyptian efficiency standards. Substantial savings could be achieved subjected to legislations:

37. 80 Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 2 EEIGGR Residential Energy Efficiency Building Code • A ministerial decree (482/2005) by the Ministry of Housing Utilities & Urban communities has been issued on 20/12/2005 for enforcement of E.E. code for residential buildings. • The Ministerial decree for the commercial buildings will be issued within the next few months. • Work is undergoing for developing an energy efficiency code for the administrative buildings. • Legislation is needed for ensure enforcement mechanisms for adoption of energy efficiency building codes where the expected savings could reach 20 to 25% of the consumption.

38. 1.08 MTOE Legal Framework Energy Savings Agriculture Waste CO2 3.00 MTons Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 3 EEIGGR Cogeneration

39. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 3 EEIGGR Legal Framework • Establishment of small power group within the EEHC to sustain the cogeneration activities beyond the project lifetime. • Training engineers from DCs on cogeneration applications. • Final version of the cogeneration system guidebook. • A power purchase agreement as well as agreement for and energy transfer from cogeneration projects, the agreement is understudy by the legal department of Egyptian Electricity Transmission Company. • Preparing the technical specifications for safe interconnection equipment.

40. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 3 EEIGGR Agriculture Waste • An assessment study to investigate the possibilities of using the agriculture waste (bagasse and rice straw) for electricity generation. • Report on the potential capacity and proposals for agro-waste fired small and medium CHP projects • Complete contract proposals legal aspects and incentives for the development of the CHP based on agro-wastes

41. Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 3 EEIGGR Maximize the utilization of the existing cogeneration capacity • Two pilot projects were proposed for implementation but due to the increase of fuel prices, the payback period of the cogeneration pilot projects increased to 5 – 7 years. • A new approach is proposed for executing a national program for updating the database of the existing cogeneration capacity.