The blackouts are back as Egypt swelters: The state-owned Egyptian Electricity Holding Company (EEHC) said Saturday that it will continue regular power cuts in response to pressure on the country’s electricity network triggered by the current heatwave.

We know (kind of) when to expect them: The EEHC said it will cut the power for up to an hour any time during the 20-minute window between 10 minutes before the hour and 10 minutes past. The company didn’t specify how many times the power could be cut per day or how long it expects to have the measures in place. Anecdotally, it has been going out 2-3 times a day in capital city districts including Maadi, Mohandiseen and Zamalek.

Avoid elevators: The EEHC advised people to avoid using elevators during the 20-minute period.

WHAT’S GOING ON?

It’s all about the gas: High temperatures have added pressure on gas supply available for power generation, Electricity Ministry spokesperson Ayman Hamza told us , adding that the ministry is limited by the quantity of natural gas it receives from the Oil Ministry. An unconfirmed report last week in Asharq Business suggested the deficit in gas availability meant we had about 35 GW of demand, but stocks to generate just 32 GW.

There won’t be more natural gas for domestic use (as distinct from export) unless production ramps up: The Oil Ministry is contractually required to provide a certain amount of gas to some of its major international partners, preventing it from diverting more of its production to local power plants. Accordi ng to our sources , the Electricity Ministry receives smaller volumes of natgas for power generation than it provides to international oil and gas firms.

The Madbouly government has put a hold on its own exports, with Bloomberg quoting Oil Minister Tarek El Molla as saying last week that state natural gas exports will only resume this fall. Egypt didn’t export any LNG in June “and has dispatched only one shipment so far in July,” the business information service says, citing its own data. International energy companies, meanwhile, can still continue to process and sell abroad their portion of local production.

The difference a year can make: Last year, we exported higher LNG volumes during the summer as global gas prices jumped on the back of the Russia-Ukraine war, while relying on heavy fuel oil imports to fulfill domestic needs, according to the minister. Natural gas prices have fallen back since last year, impacting our gas revenues, as we sell LNG on the spot market rather than under long-term agreements. “The decline in international prices this year makes it more economical to consume [LNG] domestically,” Bloomberg quotes El Molla as saying.

Gas production has also been on the decline: Local natural gas output has declined in recent months and has only partly been compensated by rising imports from Israel, a veteran insider told us earlier this month. Gas output from Eni’s giant Zohr gas field — whose discovery in 2018 helped Egypt wean itself off gas imports and become a net natural gas exporter — dropped 11% y-o-y to 2.5 bn cf/d in 2022.

AND- High temperatures decrease efficiency: Higher temperatures make simple cycle power generators — the most common type of power plant in Egypt — 16% less efficient, industry sources tell us.

This wasn’t supposed to happen: The government recently restored daylight saving time and last year began rationing the use of electricity in moves designed to reduce power consumption.

KEEPING THE LIGHTS ON-

The lights could be on full time by mid-week, says the PM: “We are currently implementing temporary load reductions to reduce pressure on the gas network,” Prime Minister Moustafa Madbouly said during last week’s cabinet meeting. The rolling blackouts could bring loads down to normal levels by the middle of this week, he said.

Pressure is easing: “Load reduction has reached 3.2k MW during the past few days,” Electricity Minister Mohamed Shaker told Youm7 on Thursday . “The only solution currently to get out of the crisis … is to rationalize electricity consumption to reduce pressure on the gas network,” he said, adding that the measures will likely remain in place until the middle of the week.

We apparently need this much fuel to restore full power: The Electricity Ministry needs to secure around 135 mn cubic meters of gas and 10k tons of mazut a day to support current consumption, according to the official who spoke to Asharq.

The ministry is turning to mazut: Our sources told us that the ministry is looking to increase imports of mazut to help fill the consumption gap.

THE REACTION-

Pro-government and opposition MPs aren’t happy: Tens of MPs have directed questions to the electricity minister asking that he be transparent about the reasons for the blackouts and how long they will continue for. “Power outages show that the Electricity Ministry is not well prepared for the summer season … and this has caused financial harm to citizens and business,” said Mostaqbal Watan Rep. Mahmoud Qassem. “Are power outages due to short supply of fuel like natural gas or due to other reasons which we do not know?” Meanwhile, Rep. Faridi El Biadi, a member of the opposition Egyptian Socialist Democratic Party, raised questions about the ministry resorting to power cuts “while claiming it has a surplus of electricity production.”

Neither is the general public: People took to social media over the weekend to express exasperation with the power cuts and call on the government to find a solution to the crisis. Businessman Naguib Sawiris made headlines over the weekend for his mocking take on the situation.

This comes as we’re on the cusp of electricity price hikes: Last fiscal year’s freeze on electricity prices expired on 30 June, but the government is yet to announce new tariffs, putting the future of electricity prices in the hands of electricity companies.

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