Energy Efficiency Improvement & Greenhouse Gas Reduction Project Dr. Ibrahim Yassin Project Technical Director October, 2010

Introduction The energy sector is playing a vital role in Egypt's economy. However, the Egyptian government currently faces a real challenge to make a strategic choice between satisfying the ever increasing national primary energy demand (depending by more than 94% on oil and gas) that is being offered to end-users with subsidized prices, and maintaining a certain level of hard currency revenues from oil and gas exports at world prices, even with a growing risk of accelerated depletion rates of national proven reserves. For the electricity sector, the load and energy demand grows by more than 10 % per year where the load is expected to reach 39703MW and the energy 220450 GWh by year 2020.

Supply and Demand Sides Meeting the ever increasing demand on electricity with a high degree of reliability and sustainability has been one of the main issues addressed by the strategy developed and implemented by the Ministry of Electricity and Energy. The Egyptian Electricity sector has adopted strong measures in order to improve energy efficiency at both the supply and demand sides, this resulted in reducing the overall average specific fuel consumption from 340 gm to 217.6 gm of oil equivalent per kWh, reducing losses from 18 % to14% in 2008/2009. Comparable efforts have been conducted on the demand side to effectively utilize the electrical energy.

Electricity Sector Strategy The national strategy for Egypt’s power sector includes among others the following: Optimize use of available energy sources and minimize environment pollution Provide electricity with minimum price and best quality Restructure electricity sector to optimize investments and improve electrical services Utilize modern and sophisticated technical systems in electricity sector's operation and activities Develop the expertise and skills of engineers and technicians working in the electricity sector. Energy Efficiency Improvement

To continue the electricity sector efforts, EEIGGR Project, was started in 1999, fits very well into this strategy: The Project with the overall objective to reduce the long-term growth of greenhouse gas emissions from electric power generation and from consumption of non-renewable fuel resources is mainly based upon higher efficiency of equipment in the sector and better know-how of the professional staff through capacity building and learning. The Project’s aims were specifically to assist Egypt in loss reduction in the electricity transmission system and in load management, enhance the end-use efficiency by market incentives and provide further information and support for co-generated electricity.

Energy Efficiency Improvement & Greenhouse Gas Reduction Project Component 1 EEIGGR Reduce Transmission Losses Set Priorities for Dynamic Response of Generating Unit. Network Analysis & Control Strategies 0.17 MTOE Energy Savings CO2 0.48 MTons LOSS REDUCTION, LOAD SHIFTING AND LOAD MANAGEMENT IN THE UPS Load Shifting through (TOU) Tariff Reduce transmission losses from 7% to 5%

EEIGGR Calibration and maintenance of measuring devices using high accuracy (0.01%) calibrating equipment Program set up in cooperation with the power sector for periodical calibration of measuring equipment according to manufacturers Assessment of dynamic response of generating units and take mitigation actions to improve their performance. Tuning units to work under Automatic Generation Control AGC). Component 1 Maximum use of reactive power of the generating units. Improve the power factor through installation of capacitor banks

Beni Suef cement company EEIGGR Optimization of network planning using the up to date software Load redistribution: The cement industry is a heavy consuming one therefore 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. Component 1 Daily load curve of Beni Suef cement company   

EEIGGR Percentage %

Fuel Saving and CO2 Reduction from component 1 EEIGGR All these activities lead to a reduction of percentage losses up to 33 kV to reach 3.8% by year 2008/2009. Accumulated Fuel Savings from the start of the project in 1999 to 2008/2009: 7.2 MTOE. Accumulated CO2 reduction from the start of the project in 1999 to 2008/2009 : 21.5 MTons

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

EEIGGR Energy audits using different technologies have been accomplished in industrial and commercial facilities. Training of 60 engineers in the field of energy audits. Some audits have been implemented. Undertake a program for the diffusion of CFL by the DCs through replication of the leasing program. Encourage the Local manufacturers to manufacture CFL locally (6 factories were established). Public awareness program for the diffusion of efficient lamps through media and conferences Encourage NGOs to implement energy efficiency projects. Organizing Exhibitions for the Diffusion of CFLs Component 2

Loan Guarantee Mechanism EEIGGR Loan Guarantee Mechanism The developed scheme provide the necessary finance for the energy service companies (ESCOs) through providing guarantee to these companies to get loans from the banks 7 ESCOs have been selected and energy efficiency technologies have been adopted which can payback in less than 3 years. Up to date 46 projects are either implemented or ongoing with a total cost of L.E. 68 million and a guarantee of LE 30 million. Component 2

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

Efficient Lighting Initiatives EEIGGR Efficient Lighting Initiatives In Egypt, the share of lighting accounts for nearly 24 % of the total energy sold in the country. The residential and commercial sectors consumes nearly 25% of their energy {estimated at 47% of the total energy} for lighting purposes, the lighting consumed by the industrial sector accounts for 10%, while the public lighting and government buildings lighting accounts for nearly 7% Sector % of total consumption % of lighting out of sector consumption % of Lighting out of the total consumption Residential 39.2 25 9.8 Commercial 7.8 1.95 Industrial 33.4 10 3.3 Governmental 5.1 38 1.9 Public Lighting 6.2 100 Total 91.7 23 Component 2

Development of Egyptian Market for CFL’s EEIGGR Development of Egyptian Market for CFL’s 2000 To 2009 No. of CFLs 13.5 Million Year

Decrease of Lamp Price (L.E.) EEIGGR Decrease of Lamp Price (L.E.) from 1999-2009 Price LE Year

Fuel Saving and CO2 Reduction from Lighting Applications EEIGGR Fuel Saving and CO2 Reduction from Lighting Applications Accumulated Fuel Savings from the start of the project in 1999 to 2008/2009: 3.3 MTOE. Accumulated CO2 reduction from the start of the project in 1999 to 2008/2009 : 9.7 MTons Component 2

Cooperation with NGOs EEIGGR Cooperation with GEF Small Grants Program (SGP) to assist 9 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 Alex; Headquarter offices, garage and some offices in EEHC (total of 620 lamps); Electricity compounds and power plants in Cairo.

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 EEIGGR Application of leasing program for CFL (revolving fund) in Cairo, Alexandria and Beheira DCs These achievements encouraged other NGOs to submit proposal to get grants through the second stage of the project where 4 projects have been approved and other are presented.

Governmental Buildings Public lighting and governmental buildings consumes 7% and 5.5% respectively. EEIGGR A study has been implemented to find out opportunities of energy savings in these two sectors. The Ministry of Electricity and Energy has taken the initiative of applying energy efficiency measures in its own buildings. The DCs have started implementing EE measures in their administrative buildings where real savings have been achieved. Up to date energy efficiency projects implemented in governmental buildings reached more than 2000 buildings

Governmental Buildings EEIGGR Recommendations to be applied in Gov. Builds: Short term : Appointment of an energy manager for each governmental building in addition to awareness programs Medium term : Implementing retrofits of the current governmental building facilities especially for the lighting system, in addition of improving power factor for these buildings. Long term : 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.

Ministry of Electricity & Energy Building EEIGGR Replacing 1650 Incandescent lamps by CFL: 57,750 L.E. Investments 418 MWH Energy Saving 86,335 L.E. Cost of Energy Saving 8 Months Payback Period Mounting of capacitors to improve power factor Case Study 500 KVAR Capacity 60,000 L.E. Investments Avoid Annual Penalty of 80,000 L.E. Benefit 9 Months Payback Period

Ministry of Water Resources & Irrigation EEIGGR # Old Fixture Details New Fixture Details Demand Reduction % Reduction 900 3 × 36- watt (120CM) fluorescent with three magnetic ballasts (150 watts) 2 × 36- watt (120CM) fluorescent with one electronic ballast (66watt) 84 watts 65% 2 × 36- watt (120CM) fluorescent with two magnetic ballasts (97 watts). 2 × 36- watt (120CM) fluorescent with one electronic ballast (66watt). 31 watts 32% 1000 4 × 18- watt (60CM) fluorescent with two magnetic ballasts (101 watts). 4 × 18- watt (60CM) fluorescent with one electronic ballast (69watt). 32 watts 300 100- watt incandescent 23- watt CFL 76 watts 76% reduction in electric demand rating between 32% and 76%. The total cost of the upgrade was $ 83,700 average monthly savings yield a reduction in energy bills by approximately $3,300 Simple pay back period 2.1 years

Supreme Council Decisions Supreme Energy Council’s Technical Secretariat Cabinet of Ministers EEIGGR Supreme Council Decisions The Supreme Council of Energy has taken a decision to develop energy efficiency programs to be applied on National Basis in the following sectors: Street Lighting Governmental buildings Public utilities Residential sector

Initiatives Taken By the Egyptian Power Sector to diffuse the use of efficient lighting equipment The Ministry of Electricity and Energy has started an ambitious program for the diffusion of CFLs through the electricity distribution companies As a first phase, 6.5 million lamps 20 watt sold to customers, the price of the lamp was 12 L.E . The customer got one lamp free against one purchased lamp which means a reduction of 50% that bared by the electricity distribution companies. The customer was allowed to pay the price through installments collected through the electricity bills over a period of one year

Energy Efficiency Program for Street Lighting Energy consumption of street lighting in Egypt reached 6.9 TWh in year 2008/2009 representing 6.2% of the total electricity consumed by the country with a cost of about L.E 2.8 billion. A study has been implemented by the Ministry of Electricity and Energy which recommended the measures to be taken for increasing energy efficiency of street lighting and the achieved savings. Upon recommendations of the Supreme Council of Energy, based on the results of this study, an energy efficiency street lighting program is currently implemented in coordination between the Ministry of Finance, Ministry of Local Development and Ministry of Electricity and Energy

Energy Efficiency Program for Street Lighting The total cost of the program is M.L.E 260 and expected to be implemented over a period of two years. The first phase is implemented in great Cairo Governorate with a cost of M.L.E 20 The general features of this program consist of: Replacing sodium and mercury lamps by CFLs depending on the types of streets and in accordance with international standards Restriction of the use of mercury vapor lamps

Energy Efficiency Program for Street Lighting Expected yearly savings from this program: Energy savings: 1800 Million KWh Load reduction: 450 M.W Decrease of the electricity bill bared by the local authorities by: M. L.E 600 Fuel saving: 390 MTOE

Standards & Labels Program EEIGGR A ministerial decree of the Minister of Industry was issued for applying the specifications and the energy efficiency labels for: Refrigerators, Air Conditioners, Washing Machines, CFLs . Accredited Energy Efficiency Testing Laboratories have been erected at New and Renewable Energy Authority premises for: Refrigerators Air conditioners washing machines Efficient lighting equipment Electric water heaters

Annual Energy Consumption for No Frost Refrigerator Energy Efficiency Testing Labs. EEIGGR Level Annual Energy Consumption for No Frost Refrigerator A to 1.54 ≥ A B 1.84≥ B ≥ 1.54 C 2.14≥ C ≥ 1.84 D 2.43≥ D ≥ 2.14 E 2.73≥ E ≥ 2.43

Number of tested appliances at NREA Lab till June 2009 Energy Efficiency Testing Labs. Number of tested appliances at NREA Lab till June 2009 EEIGGR In addition to 126 Air-conditions and more than 2000 CFLs and 500 electronic ballasts

Savings achieved from efficient equipment: EEIGGR Lighting loads represent 34% of the total residential consumption followed by the refrigerators 22%, washing machines 10%, and air conditioning 12%. Since the residential consumption is 39% out of the total consumption, then the consumption of these appliances represents 15% of the total energy consumption Saving 10% from the use of efficient appliances, could achieve around 0.36 MTOE and 1 MTons of CO2

Proposed measures to enhance the S&L Program 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.

Building Code EEIGGR 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, and (190/2009) for E.E. commercial buildings code Developed administrative building code has been incorporated in the Unified Building Law. Legislation is needed to ensure enforcement mechanisms for adoption of energy efficiency building codes where the expected savings from S& L program and EE building codes could reach 20 to 25% of the consumption.

Energy Efficiency Center Analysis of the previous studies in the field of energy efficiency in Egypt to assess the energy efficiency potential. More than 25 seminars were prepared at different establishments in addition to radio, television programs and press articles. Establishing a database for consumers of over 500 kW, as well as energy audits conducted through the project. Establishing website for Energy Efficiency Center in English and started the Arabic version www.eeiggr.com Establishing a database for energy consumption of governmental buildings for all distribution companies. EEIGGR

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

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. EEIGGR

Agriculture Waste EEIGGR 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

Maximize the utilization of the existing cogeneration capacity EEIGGR An Agreement with Arab Contractors Co. has been signed to develop the cogeneration unit at Alu Misr for its parallel operation with the grid. The unit load factor has improved and reached 80% instead of its present value of 57%

Cooperation with similar projects in some Arab countries EEIGGR Cooperation with similar projects in some Arab countries HBRC training on residential and commercial building codes to 25 engineers from Palestine, Jordan and Lebanon. Alexandria D.C training to 65 engineers from Syria in the field of energy audits. IRP/DSM training to 20 engineers from Saudi Arabia

Cooperation with similar projects in some Arab countries Arab Republic of Syria in the field : - Specifications for energy efficiency electrical appliances - The financial rules applicable in the United Nations Development Programme(UNDP) - Preparing energy efficiency code for residential and administrative buildings - Training to improve energy efficiency in electric power stations Kingdom of Jordan in the field : - Training on the energy efficiency code in partnership with Housing & Building Research Center (HBRC) Kingdom of Saudi Arabia in the field : - Training on energy audits and cogeneration projects Republic of the Sudan in the field: - Preparation of joint seminars in the field of energy improvement in public lighting

Preparation for the project second phase EEIGGR Due to the satisfactory outputs of the current project a second phase including 2 components is expected to start early 2011, A Project Preparation Grant (PPG) of US$ 100,000 was allocated to cover the following activities: Updated Market Study of the CFL (GFK- Local Consultant) Updated assessment of the market potential within the main target sectors Assessment of local production capacities Analysis of the key barriers to phase out inefficient lighting Identification and evaluation of the feasibility of the possible distribution and financing mechanism for accelerating the market transformation

Market Study of the S&L for the rest of appliances (GFK-LC) Updated assessment of the level of implementation and enforcement of S&L program Decide of selected criteria for S&L more appliances Compilation of the market information Review of testing facilities Preparation of the second phase project document (International Consultant) Finalizing the project document and CEO endorsement request of the project in accordance with UNDP/GEF formats

Efficient Lighting Phase 2 EEIGGR Facilitate a sustainable market transformation with the objective to completely phase out inefficient lighting in both residential and governmental sectors through: An enabling regulatory frame work for phasing inefficient lighting. Develop innovative and attractive financing mechanism for energy efficiency lighting projects Improve energy management of public buildings Increase awareness through public campaigns Enhance capacity of local manufactures to improve the quality of their products

Efficient Lighting Phase 2 EEIGGR Expected energy savings from 70% GLS phase out or complete GLS phase out

S & L Program Phase 2 EEIGGR It will strengthen the regulatory and institutional framework, develop monitoring and enforcement mechanisms, provide training to public authorities, appliance professionals, energy suppliers and other relevant stakeholders Due to the lack of consumers’ awareness, the demand for the efficient appliances is still low, and the retailers don’t grasp the meaning of energy labels and how it can be used to recommend better energy performing products. The project will promote the awareness of both retailers and consumers of energy efficient appliances. The project will strengthen the capacity of the local manufacturers to produce appliances complying with the new standards.

S & L Program Phase 2 EEIGGR Expected energy savings from refrigerators as a result of a strengthened S&L scheme

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