Efficiently managed biomass offers a huge potential with vast economic and environmental benefits in Egypt. It can be used to produce alternative fuels such as biogas that can be utilized to generate heat, electricity, and high quality organic fertilizer. As promising as this renewable energy resource is, bioenergy contributes to ten percent of the global energy mix but to only one percent of Egypt’s energy mix.
“By 2050, Germany wants to cover 80% of our electricity demand with renewable energies which amounts to a radical transformation of our energy sector”, H.E. Julius Georg Luy, Ambassador of the Federal Republic of Germany to Egypt, opened the discussion at the German Academic Exchange Service (DAAD) on Tuesday evening. “Our biomass action plan, which was introduced in 2009, foresees the promotion of the further development of procedures and technologies that guarantee the efficient, safe, economical and sustainable generation of electricity and heat from biomass as well as from biogenic residues and waste,” he highlighted.
H.E. Dr. Khaled Fahmy, Egyptian Minister of Environment, stated in his opening remarks that “we should have a vision and a well-coordinated plan between all concerned ministries for waste management incentivizing mechanisms in Egypt.” He elaborated that after a nationwide study the waste to energy feed-in tariff was already proposed to the Cabinet of Ministries. “The final purchasing price has not been announced yet, but to give you some figures, we are targeting a 13% internal rate of return over ten years, a payback period of four years, a return on investment of 150% and a power purchase agreement that can reach up till 20 years. This is all very profitable and attractive to investors.”
“There is a lot of diverse information on how many tons of agricultural waste is produced in Egypt. We have been working on a survey over the last three years to know exactly which crops are grown where and how much biomass is produced. We came up with the conclusion that the conservative number of annually produced biomass is between 19 to 22 million tons“, stated Prof. Dr. Eid Megeed, Director of the Technology Transfer Office at the Agriculture Research Center (ARC). Due to the inconsistency of supply, “connecting and transporting biomass is costing a lot of money”, he further explained. “Once the demand increases, there will be an economic incentive for the farmers to collect their crops and transport them to the project location.” By publishing a map that locates all biomass resources in Egypt the ARC wants to support the demand side in order to assist companies to develop their business plans.
“In cooperation with the Egyptian Environmental Affairs Agency, the United Nations Development Program and the Global Environment Facility, we were able to support 30 start-ups that built 1.300 biogas units in 18 governorates”, explained Engineer Ahmed Medhat, Executive Director of the Association for Bioenergy for Sustainable Rural Development. “We started to choose the most proper technology which will help farmers to replace their liquefied petroleum gas with biogas and their chemical fertilizers with organic fertilizers. This will reduce our Greenhouse Gas Emissions at the same time”, he emphasized. In order to make the project sustainable a lot of effort has been invested in capacity building which is pivotal in such a new market. The newly established association will build on this successful start.
At the initial start of the company Empower which currently runs two medium size biogas plants in Egypt, the biggest challenge was that “no one owns the waste”, Dr. Hatem ElGamal, Chairman of Empower Group pointed out. “We had to go to nine authorities and obtain 20 approvals from 38 different committees until we finally got the power purchase agreement.” According to Dr. Hatem it comes to no surprise that 92% of the biogas plants in the world are smaller than 500 kilowatts: “You plan your plant according to the minimum secured amount of waste.” Due to the highly fluctuating amounts of municipal and agricultural waste Empower reached out to use sewage sludge from waste water treatment plants to run its reactor in Kafr ElSheikh because the supply is more stable. He suggested that “whoever generates waste should pay for it or bring it to a specific place at which the investor collects it.” Prof. Dr. Eid Megeed agreed on municipal solid waste but strongly objected in the case of agricultural byproducts. “Growing corn on one feddan of land means a yield of three to four tons but it means as well to have around eleven tons of agricultural byproducts. So if I ask the farmer to pay for the eleven tons, I simply tell him “don’t grow corn!” since otherwise it won’t be profitable for him.”
All panelists agreed that the upcoming feed-in tariff will be an important milestone although “for municipal waste the usual model does not cover the full costs”, as Mr. Tawfik El-Kheshen, Head of the National Solid Waste Management Program at the Gesellschaft für Internationale Zusammenarbeit (GIZ), said. He highlighted that now with the “devaluation of the Egyptian Pound biomass can compete with traditional fuels.” Using alternative fuels in the cement industry is a good example which was enabled by the government forcing the companies to seek other energy sources to offset the impact of using coal. According to Mr. El-Kheshen “that is a driver to push the market. I see waste becoming very economically attractive for cement factories in the next years.”
“Our garbage is a fortune”, summarized H.E. Dr. Fahmy and Mr. El-Kheshen added with a socio-economic perspective: “If villagers are given the technology to utilize their biomass resource to create jobs and a promising future, this might help to solve the city immigration problem”.
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