05/11/2018 – Country Focus / Egypt / Sustainability / Water / Energy
Egypt: Striving for self-sufficiency
Egypt is facing unprecedented water and energy security challenges that have been exacerbated by unabated population growth, political instability and economic strife since the 2011 revolution. Eager to attract new investment and revive its regional leadership role, the Arab world’s most populous nation is embarking on projects aimed at building a sustainable energy hub while protecting its most vital of resources, as Gemma Kent reports.
One of the oldest intensively cultivated areas on earth, the Nile Delta spawned an entire civilisation in an otherwise uninhabitable land. Thousands of years ago, the Nile’s annual flooding would deposit nutrient-rich soil on the surrounding land, creating fields so fertile that they would yield enough food to feed every person in Ancient Egypt plentifully – with some to spare. The river’s life-giving capacity led to the Greek historian Herodotus describing Egypt as the “gift of the Nile”, and over the centuries that followed it fulfilled an indispensable role as the breadbasket of the Mediterranean.
Today, however, the ancient waterway – which provides 97 per cent of Egypt’s fresh water – is struggling under the weight of 21st century demands, particularly those imposed on it by the mushrooming Egyptian population. In 2000 the UN forecast that the country would reach 96 million inhabitants by 2026, but it passed that point last year, a decade early, and the government is now projecting a population of 127 million by 2030 – if efforts to bring down the fertility rate fail. The 660 cubic metres of water per person currently supplied by the river is already one of the world’s lowest annual per capita water shares, but there are fears that by 2025 supply could fall below the 500-cubic-metre threshold considered “absolute water scarcity” by the UN Food and Agriculture Organization (FAO).
Battle for the Nile
Egypt’s relentless population boom – and associated urban sprawl – only exacerbates the other challenges affecting the Nile, which include the decreased water flow and rising sea levels resulting from climate change. According to a multi-year study published in 2017 by the Geological Society of America (GSA), the plains of the Nile Delta currently sit just one metre above sea level, making them vulnerable to uneven rates of submergence. While the construction of flow-altering barrages such as the Aswan High Dam has reduced sediment deposition, facilitating erosion and saltwater intrusion, the sea level is rising by about three millimetres annually – leading to an overall submergence rate of around one centimetre a year, says the study.
Compounding those concerns is the prospective impact of the Grand Ethiopian Renaissance Dam (GERD), currently under construction in the headwaters of the Blue Nile, which is causing tensions between Egypt and its neighbours. While Sudan stands to benefit from cheap electricity and improved irrigation when the 6,000MW power plant is operational, experts say the Nile’s freshwater flow to Egypt may be cut by 25 per cent during the filling of GERD’s reservoir, which is likely to take at least three years. With work on the project currently more than 65 per cent completed, Ethiopian Prime Minister Abiy Ahmed Ali and Egypt’s president Abdel-Fattah al-Sisi recently agreed to adopt a joint vision regarding the dam.
In combination, these developments indicate the likelihood not only of a drinking water shortage but also a growing food deficit in the desert nation. Indeed, Egypt’s agricultural sector is unique in that over 95 per cent of its production is derived from irrigated land, and the waters essential for its irrigation originate outside of the country’s borders. With its activity heavily concentrated on a narrow T-shaped strip of land along the Nile and the coast around the Delta, the sector consumes more than 85 per cent of Egypt’s share of Nile water, rendering it especially susceptible to the effects of external influences on the river.
Last year the government began taking steps to tackle the nation’s water shortage when it drafted a controversial new water resources and irrigation bill, which calls for penalising farmers who grow water-intensive crops, including rice, outside the land plots authorised by the government on an annual basis. The new bill follows the ongoing implementation of the Farm-level Irrigation Modernisation Project, which aims to increase awareness of water conservation methods while improving equity in access to higher-quality water for small-scale farmers in certain areas of the Nile Delta.
The government is also rolling out schemes aimed at expanding the area available for agriculture in Egypt, including the ambitious ‘1.5 Million Feddan’ project (one feddan being approximately an acre), which involves the modification of around 630,000 hectares of land in the Western Desert to make it suitable for agricultural use. Critics have questioned the long-term sustainability of reclaiming the land, however, due to its dependence on pumping water from non-renewable aquifers with predicted lifespans of 100 to 160 years. “The country is big enough for a million feddans” of new farmland, said Daniel Leroux, CEO of Saudi-owned agribusiness Kadco, “but where is the water?”
Looking out to sea
The answer to that question may lie in desalination. The state-owned Egyptian Countryside Development Company (ECDC), developer of the 1.5 Million Feddan project, recently signed a contract with agriculture investor Go Green to establish a desalination plant in the Western Desert, which will treat 700,000 cubic metres per year of brackish water from a lake in the Moghra Oasis. The project follows an announcement earlier this year from the Kuwait Fund for Arab Economic Development (KFAED), which is providing Egypt with a US$100m loan to build five desalination plants in South Sinai.
With Egypt’s domestic water consumption expected to increase from around 9.2bn cubic metres in 2016 to 15bn cubic metres by 2040, according to a recent study published in the American Journal of Engineering Research (AJER), desalination will certainly play a vital role in the country’s “urgent plan” to develop its water resources. Describing the government’s intentions in July, Prime Minister, Mostafa Madbouli, said that water security could be achieved “through protecting the legitimate water rights…rationalising the use of irrigation water, and protecting of the country’s coasts. We are also planning to expand the network of desalination plants in the country’s coastal cities, he added.”
As well as being far more expensive than Egyptians are used to paying, however, desalted water still requires large amounts of energy to produce – power that simply did not exist as recently as four years ago, when Egypt’s worst energy crisis in decades left parts of the country facing up to six power cuts a day, and demand for electricity exceeded capacity by 20 per cent. Cognisant of the fact that this demand has been increasing at a rate of more than 10 per cent a year since 2010, the government is taking major steps towards diversifying its energy production and even becoming energy self-sufficient.
Egypt took a significant step towards this goal last December, when the Eni-operated Zohr gas field – the largest in the Mediterranean – started production with an initial output of 350 million cubic feet per day, a figure that had increased to 2bn by September and is on course to exceed 2.7bn by the end of 2019. A game-changer for Egypt, the Zohr field could put an end to expensive foreign gas imports and reinstate the country as a net exporter of gas to nations throughout the MENA region, while the opening up of its entire gas sector to private investment has greatly enhanced Egypt’s attractiveness to international firms.
Indeed, during a visit to the Zohr onshore gas processing facilities in April, EU Climate Action and Energy Commissioner Miguel Arias Cañete noted that Egypt is becoming an important gas and electricity hub that can provide energy security for the EU and the entire region. “There is much to gain in terms of access to new sources of energy and market opportunities, for European and Egyptian citizens and businesses alike,” he added.
Zohr is one of a string of major discoveries in recent years, fuelling Egypt’s hopes of becoming a centre for LNG, linking eastern and western markets – and further exploration is underway. In September the Ministry of Petroleum announced the signing of a US$1bn deep-water oil and gas exploration deal with Royal Dutch Shell and Petronas for eight wells in the West Nile Delta, together with a second US$10m deal with Rockhopper, Kuwait Energy and Canada’s Dover Corporation for exploration in the Western Desert.
Towards energy independence
Natural gas is the primary fuel being used by the three combined-cycle power plants that form the backbone of Siemens’ so-called Egypt Megaproject, which set a new world record in July for the successful delivery of 14.4GW of power generation capacity in only 27.5 months. With enough power to supply up to 40 million people with reliable electricity, the three 4.8GW plants were built in select locations across the country. One plant sited in the Greater Cairo area is intended to energise the New Administrative Capital – expected to house five million Egyptians – and the strategic New Suez Canal Development Zone. The next stage of the project will focus on the deployment of around 600 wind turbines across up to 12 parks in the Gulf of Suez and West Nile, expected to produce 2GW of green energy.
Certainly, with its abundance of land, sunny weather and high wind speeds, Egypt is a prime location for renewable power generation, which the government hopes will supply 20 per cent of the nation’s electricity by 2022 – wind providing 12 per cent, hydropower 5.8 per cent, and solar 2.2 per cent. Included in the 7.2GW planned to come from wind by 2022 are multiple projects in Suez Bay, where wind speeds exceed 10 metres per second on average. Together with French utility Engie and Japan’s Toyota Tsusho Corp., Egyptian firm Orascom Construction is building a 250MW wind farm in the Gulf of Suez, while Italgen is currently developing the third phase of its 320MW Gulf El Zeit project, located around 100km north of Hurghada in “one of the windiest regions of the world”, according to the Italian company.
To capitalise on its immense solar energy potential, since 2015 Egypt has been building the Benban Solar Park near Aswan – a US$4bn, 37-square-kilometre complex that will encompass 32 solar plants and provide 1.6–2GW of electricity by mid-2019, making it the largest solar park in the world. Meanwhile, Egypt’s decades-long deliberation over nuclear power moved a step closer to fruition last year, with the conclusion of a US$30bn deal with Russia’s Rosatom to build, operate, maintain and provide fuel for the 4.8GW El Dabaa nuclear power plant in the Matrouh region, in the biggest non-feedstock deal in Russian history. Construction is expected to start in 2020, with the plant reaching completion in 2022, according to local media.
Such collaborations between government and private-sector players will surely continue to generate ample opportunities for growth within the Egyptian energy sector – both upstream and downstream – while perpetuating the momentum that was kick-started by the discovery of the Zohr field will be critical to further development, going forward.