{"id":654925,"date":"2024-11-10T00:00:00","date_gmt":"2024-11-10T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/higher-energy-costs-push-industry-toward-solar\/"},"modified":"2024-11-10T00:00:00","modified_gmt":"2024-11-10T00:00:00","slug":"higher-energy-costs-push-industry-toward-solar","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/higher-energy-costs-push-industry-toward-solar\/","title":{"rendered":"Higher energy costs push industry toward solar"},"content":{"rendered":"

The industrial sector is shifting to solar energy amid rising energy prices:<\/strong> Transport and Industry Minister Kamel El Wazir has directed firms intending to establish large factories to build wind or solar power stations to fuel them, as part of a larger move to lessen reliance on traditional energy networks. The switch should help rationalize energy consumption, ensure consistent and sustainable energy sources for factories, and reduce emissions from a sector that ranks as Egypt\u2019s third-largest producer of pollution.<\/p>\n

Big changes are taking place in the industrial sector: <\/strong>Sector players told EnterpriseAM that the sector is undergoing a fundamental shift, which has manifested in the establishment of new power plants and more firms considering a partial shift to solar energy. Several manufacturers told us that their electricity bills last month were extremely high, with some exceeding EGP 100k \u2014 a situation that has prompted many firms to look into establishing solar power stations to help reduce production costs and remain competitive in export markets.<\/p>\n

The gov\u2019t has long championed the switch to solar: <\/strong>The government\u2019s Egypt-PV project<\/a> contributed to the installation of 121 power stations across the industrial, commercial, tourism, residential, and public building sectors in 15 governorates nationwide, with a total capacity of 9.8 MWs. The project \u2014 which received an Energy Institute award for being one of the best projects for reducing greenhouse gas emissions in 2020 \u2014 was funded by the UN and the Global Environment Facility (GEF), and helped households and SMEs across the country switch to solar.<\/p>\n

Transitioning to solar can make your project a higher priority: <\/strong>While the decision to transition to solar is not mandatory \u2014 especially for industries with low energy consumption \u2014 it can help speed up the process of receiving a license for a given project, a government source told us.<\/p>\n

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WHO\u2019S MAKING THE SWITCH?<\/p>\n

Some large producers are already on top of it: <\/strong>A few areas in the Robbiki Leather City in Badr City have already begun operating using solar power, and there are plans to establish multiple solar power plants in the Tenth of Ramadan industrial zone, which relies heavily on electricity and gas for manufacturing and keeping factory lights on, a source from the Tenth of Ramadan Investors Association told EnterpriseAM. Marble producers are also planning to establish a large solar station<\/a> in the desert hinterland of Shaq El Tebaan \u2014 the largest marble and granite industrial cluster in the country \u2014 expected to supply the entire area, Chamber of Building Materials Industries (CBMI) deputy head Sayed Abaza previously told EnterpriseAM. <\/p>\n

New industrial zones \u2014 especially ones located in Upper Egypt \u2014 include desert hinterlands that can be used for various logistical and energy services<\/strong>, a source told EnterpriseAM. Samsung is considering implementing solar power in its industrial complex in Beni Suef, while Toshiba is considering doing the same for its new industrial complex in Upper Egypt, sources told us. Siemens has also announced plans<\/a> to establish a solar plant in the Ain Sokhna industrial zone expected to power 90% of the center\u2019s needs.<\/p>\n

A who\u2019s who of companies want in on solar: <\/strong>A meeting of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egyptera) recently saw a number of firms obtain licenses to establish solar power plants for industrial activities, including Canex Aluminum, Helwan for Food Production, and Globe Spinning and Dyeing, based on data seen by EnterpriseAM. Fresh Appliances has established solar power plants worth EGP 200 mn, saving them EGP 40 mn annually, Cairo Solar managing director Hatem Tawfik told EnterpriseAM. Other companies such as brick manufacturing firm Rockal, Halwani Bros, Tredco El Sayad Group, Toshiba, and El Marakby Steel have adopted similar initiatives.<\/p>\n

There\u2019s support on offer for SMEs, too:<\/strong> The Industry Ministry is also exploring the possibility of expanding the provision of soft loans ranging from EGP 100k to 10 mn for small- and medium-sized projects to accelerate the shift to renewable energy in Egypt\u2019s factories, a source from the Industry Ministry tells us.<\/p>\n

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BY THE NUMBERS-<\/p>\n

More demand means lower solar plant production costs: <\/strong>As solar plants\u2019 capacity goes up, costs drop \u2014 particularly when capacity exceeds 100 KW, Tawfik told us. He noted that the rising demand for solar energy in the industrial sector is largely down to a significant decrease in solar panel prices in China, which has seen solar panel prices fall from USD 0.59 to just USD 0.09 currently. A 1 MW solar power system can save a factory between EGP 9-16 mn on its electricity bill, he continued, noting that smaller, more widespread stations are more efficient at capturing solar with minimal loss.<\/p>\n

Using solar energy can also guarantee a quick recovery on your investment: <\/strong>Establishing solar power stations for industrial use can see you realize a return on your investment in three years, Tawfik said. USD 100 spent on solar energy can be fully recouped within three years with additional savings of USD 30 per year.<\/p>\n

There\u2019s more work for the gov\u2019t to do: <\/strong>The government will need to adopt a number of tax, customs, and financial incentives to help the sector transition away from traditional energy, Tawfik said, pointing to a memorandum submitted to the government through the Sustainable Energy Division at the Cairo Chamber of Commerce as part of the national Shamsak ya Masr initiative, which focuses on securing customs exemptions for solar panels, similar to those available for green hydrogen projects.<\/p>\n

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