Egypt: Giant solar park in the desert jump starts renewables push

Near the southern Egyptian city of Aswan, a swathe of photovoltaic solar panels spreads over an area of desert so large it is clearly visible from space, reports Reuters.

They are part of the Benban plant, one of the world’s largest solar parks following the completion last month of the second phase of the estimated $2.1 billion project.

Designed to anchor a renewable energy sector by attracting foreign and domestic private-sector developers and financial backers, the plant now provides nearly 1.5 GW to Egypt’s national grid and has brought down the price of solar energy at a time when the government is phasing out electricity subsidies.

In 2013, Egypt was suffering rolling blackouts due to power shortages at aging power stations. Three gigantic gas-powered stations with a capacity of 14.4 GW procured from Siemens in 2015 turned the deficit into a surplus.

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National installed electricity capacity is now around 50 GW and Egypt aims to increase the share of electricity provided by renewables from a fraction currently to 20% by 2022 and 42% by 2035.

“They have plans to bring out renewable energy, private sector invested, across the Red Sea in wind and throughout the deserts for solar power,” said Christopher Cantelmi of the International Finance Corporation (IFC), a lead backer of Benban along with the European Bank for Reconstruction and Development.

The Benban project’s 32 plots were developed by more than 30 companies from 12 countries, including Spain’s Acciona, UAE-based Alcazar Energy, Italy’s Enerray, France’s Total Eren and EDF, China’s Chint Solar and Norway’s Scatec. Developers of the plant, around 40 km (25 miles) northwest of Aswan, are guaranteed a feed-in tariff price for 25 years.

“It really introduced a lot of them to Egypt for the very first time, to project finance and to infrastructure finance,” said Cantelmi.

A third phase at Benban could add more than 300 MW, though nothing has been decided yet, while another large scale solar development is planned 45 km north of Aswan at Kom Ombo.

Egypt has struggled to attract foreign investment outside the oil and gas sector, despite winning praise for an IMF-backed economic reform programme since 2016.

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At Benban, developers visited by an IFC team last month raised the issue of a stand-off over a government demand that they collectively pay an extra 1.9 billion Egyptian pounds ($118 million)in infrastructure costs. There had also been some curtailment of supplies to the grid as they waited for new transmission lines to be added.

But operations were generally going well, and the Egyptian Electricity Transmission Company was paying on time, they said.