“Exporting electricity from Egypt comes as a result of its massive reserves of various energy types – including gas, electricity, and renewable energy – contributing to increased national income and making Egypt an attractive market for energy investment,” a statement from the Egyptian Cabinet in September 2020.
However, Egypt has once again returned to an era of frequent and prolonged power outages, facing a severe crisis in electricity supply, with daily power cuts becoming a common occurrence in most Egyptian governorates. According to official government data, “power cuts will not exceed one hour per day,” but in reality, power outages have extended to approximately six continuous hours in some populous areas and villages and one hour in some major cities. This comes amidst a heatwave, with temperatures approaching 50 degrees Celsius on some days.
The current crisis began around two months ago but has worsened significantly in recent weeks, with the average daily power outage duration reaching around 3 hours in several regions across Egypt.
Causes of the Crisis
The reasons behind the electricity outage crisis in Egypt trace back to the Egyptian Ministry of Electricity’s necessity to “load shedding” due to increased consumption amid a shortage of natural gas and petroleum products needed to operate some units, as stated by the Egyptian Minister of Electricity, Mohamed Shaker.
Analysts say that Egypt’s liquefied gas exports are facing challenges amidst mounting local demand pressures and declining spot gas prices. In order to increase gas exports, Egypt resorted to reducing gas supplies to local power plants and replaced them with more polluting fuel oil, which is less costly for electricity generation. Additionally, Cairo reached an agreement with Tel Aviv to allow the latter to increase gas supplies by 50% through a new route passing through Jordan.
These measures brought promising news for the Egyptian gas sector and the country’s economy, as Egyptian liquefied gas exports soared to record levels, reaching 7.4 million tons in 2022, marking a 12.1% annual increase. However, these measures have directly impacted the electricity sector and, subsequently, the citizens. The sudden power outages have resulted in negative effects on household appliances, with several citizens reporting malfunctions of appliances such as refrigerators, televisions, and others.
Energy expert and lecturer at “Loughborough” University in the UK, Sherif El-Feky, stated in press statements that despite this historic consumption, the Ministry of Electricity claimed to have a surplus of over 9,000 megawatts. He emphasized that the government is reluctant to decrease its gas export ratio, which worsens the dollar crisis. Thus, the government resorted to load shedding by cutting off electricity in various provinces.
El-Feky added that the problem is that Egypt prioritizes export policies over the local market, and despite the increase in Egypt’s gas exports last year, there was no noticeable improvement in the domestic market. On the contrary, prices have increased significantly.
However, the Egyptian Prime Minister stated that the problem is not a shortage in our natural gas reserves or any depletion in the “Zohr” field and its extracted gas amounts. He denied that the Egyptian state prefers exporting natural gas instead of providing it to its citizens or that there are inefficiencies in the giant electricity projects established in recent years. He stated that according to the state’s plan, natural gas exports are completely halted during the summer months when local consumption is high. Instead, gas exports take place during the winter, spring, and autumn when domestic consumption is lower, allowing the export of surplus natural gas.
Mostafa Madbouly clarified that, scientifically, the large projects implemented by the state in the electricity sector have enabled them to stand firmly in this crisis. He considered that without these projects, they would have faced the opposite situation, enduring electricity outages for only a few hours per day. The available capacities without these projects would have allowed electricity for only a few hours, leaving the rest of the day without power.
Government’s Plan to Address Electricity Outages
The Egyptian government has taken several measures, including:
1. Load Shedding: Cutting off electricity for one to two hours daily when the temperature exceeds 35 degrees Celsius, with a daily crisis committee meeting to monitor the implementation of these decisions.
2. Work-from-Home Policy: Designating Sundays (the first official working day in Egypt) for online remote work. This measure will be applied every Sunday throughout August for government employees and non-public service buildings not directly involved with public interaction. The aim is to reduce electricity consumption, as observed lower during weekends and holidays.
3. Private Companies’ Support: The Prime Minister urged private companies operating office-based and non-production service work, which allows employees to work remotely from home, to adopt work-from-home policies to alleviate the electricity burden on their premises.
4. Additional Diesel Imports: Importing extra shipments of diesel in the coming days, with an estimated additional cost of 250 to 300 million dollars, to achieve grid balance. These figures were not accounted for in the budget, and the government will cooperate with the central bank to secure this volume.
5. Public Lighting Rationalization: Rationalizing public lighting in all places, including streets, government buildings, and service facilities.
6. Football Matches Scheduling: All football matches will be played before dusk, and the games will conclude at dusk directly to reduce electricity consumption in sports facilities.
The Egyptian government also calls for raising awareness among all segments of society about the importance of conserving electricity and adopting more energy-efficient usage patterns.
The Impact of Electricity Outages
The electricity outage crisis has resulted in significant negative effects on various segments of society and vital sectors in Egypt.
At the popular level, citizens have suffered disruptions in their daily lives due to frequent and prolonged electricity outages, leading to widespread frustration and anger.
In the economic sphere, businesses and industries have incurred substantial losses, especially factories that were forced to reduce working hours and invest in costly electricity generators to compensate for the power shortage.
Sherif Al-Fiqi, an energy expert and lecturer at the University of Loughborough, stated that the government aims to convince Egyptians that it still supports electricity while shifting the responsibility for the crisis onto citizens by cutting power during heatwaves. However, in reality, the citizens bear a higher cost of electricity production in Egypt than the actual expenses, as the general budget does not allocate any funds to support electricity.
Despite the surplus in electricity production since 2019 and the global increase in gas prices following the Russian-Ukrainian war, citizens have not experienced any improvements in electricity bill rates. In fact, the government fully cancelled electricity subsidies for households using over 650 kilowatt-hours per month, charging them the actual cost. On the other hand, subsidies remain for consumers using over 1000 kilowatt-hours per month, meaning they receive electricity at a price higher than the actual cost, favouring the less consumption-intensive sectors.
In July 2014, the Egyptian government began a plan to gradually remove electricity subsidies, initially scheduled to be completed by 2019. However, in June of the previous year, it extended the subsidy program until June 2025 to alleviate the impact of the COVID-19 pandemic on citizens.
It is worth mentioning that there have been discussions in recent years about the necessity of exporting Egyptian electricity surplus, reaching up to 13,000 megawatts daily. Egypt’s national electricity grid is connected with Jordan, Palestine, Libya, and Sudan, with plans to connect with Saudi Arabia through a three-gigawatt capacity line by 2025.
A report issued by the Central Agency for Public Mobilization and Statistics revealed an increase in electricity exports to $108.9 million in 2022, compared to $71.3 million in the previous year, marking a 52.7% increase.
Egypt’s ranking in the international index for electricity access improved to 77 in 2020, up from 145 in 2014, thanks to increased generation capacities exceeding 59,000 megawatts, according to official figures announced by the Ministry of Electricity in December 2020, along with improved capabilities of high-voltage and ultra-high-voltage transformer stations.
