Q&A: Decreased consumption ‘only solution’ to electricity crisis, says EEHC head

Mohamed Awad, head of the state-run Egyptian Electricity Holding Company (EEHC), has been forced into the spotlight due to popular rage sparked by Egypt's recent bout of electricity outages. In an exclusive interview with Al-Masry Al-Youm, Awad defended EEHC from public criticism, concluding that the sole solution to the conundrum was to ration domestic electricity consumption.

Al-Masry Al-Youm: How do you diagnose the current electricity crisis?

Mohamed Awad:  We are adopting prudent plans that take into account factors such as national income, industrial conditions and other aspects of development in order to meet demand.

The problem this year was the result of unexpected climactic changes. It is true that such changes occur every 100 or 130 years, but they are exceptional anyway. These climactic conditions caused an overload of 5 percent during peak hours, from sunset until the evening. To offset these overloads, we have to establish generation plants with a capacity of 3000 megawatts at a cost of US$2 billion. It would not be wise to spend this sum of money for the sake of three or four hours daily. How can we afford such an expense?

Al-Masry: Are you trying to say that the problem lies in exceptional circumstances?

Awad: Sure. Electricity agencies around the world have adopted programs to handle such circumstances so that the people adapt to them. Systems in some international companies, like in California, possess a total shut-down program for the entire state. This means we did not improvise our rationing scheme.

Al-Masry: But in other countries, citizens are informed in advance of power cuts. Why don't we do the same in Egypt?

Awad: We did.

Al-Masry: But in Egypt, nobody had any idea when or where electricity would be cut off, whereas water companies always announce service interruptions beforehand.

Awad: It is easy for water companies to do that, since water pipes can be easily shut at any time. But this is hard to apply to electricity. For instance, if I cut 5 percent of the total electricity from the [Cairo] district of Imbaba alone, the whole area will by blacked out. Instead, we divide this 5 percent of rolling blackout over the whole country so the affect does not fall on a single district. Therefore, it would be hard to claim that today there were 200 streets in the dark for a given number of hours.

Al-Masry: Is there a time minimum for power outages?

Awad: Yes. One hour.

Al-Masry: Is this rate set or subject to change?

Awad: It changes every day, since a rolling blackout cannot reoccur in the same street for two days consecutively. If electricity cuts off from 6 PM to 7 PM somewhere, it will happen from 8 PM to 9 PM the next time.

Al-Masry: But the electricity authorities have been accused of discriminating against low-income areas in favor of wealthier areas when deciding where to cut power.

Awad: There are specific instances where one can argue that there is discrimination, but our actions are dictated by necessity. For example, I cannot cut power on a street where there is a hospital or water station.

Al-Masry: But there have already been cases of water cuts as a result of electricity outages, no?

Awad: Untrue. And, if so, that would have been the result of internal breakdowns, which are the responsibility of the water and not electricity authorities.

Al-Masry: So you are absolving the Electricity Ministry from responsibility for the water cuts?

Awad: Absolutely. Even if water stations suffer power outages, they are supposed to contain reserve diesel engines. And if they don't, that’s not my problem. The same applies to hospitals. An example of this is the electricity outage that occurred at Matariya Hospital, where electricity  authorities were first blamed. But it later emerged that it had been due to the lack of diesel engines.

Al-Masry: Is this the problem everywhere?

Awad: People have to adjust to one-hour power cuts. In the past, electricity outages would last for five hours. But now, people can not even bear a single minute of electricity outage. This constitutes a problem for us, since we are supplying 99.3 percent of the population with electricity.

Al-Masry: The problem with gas supplies to power stations is a longstanding one. Why was it not brought up before? Did you raise the issue only after you became fed up?

Awad: I do not want to say I was "fed up" to avoid sensationalizing the issue. We do not want to stand against each other. When we faced a problem with fuel supplies, we had to complain about it. But there is coordination between both ministries.

Al-Masry: How could such a big problem remain undeclared despite the damage suffered by power stations that were forced to use fuel oil instead of gas?

Awad: These are the circumstances and we have to endure them. But when criticism was leveled against electricity authorities, we had to speak out.

Al-Masry: Did you regret provoking this issue?

Awad: No. Why should I? I'm just telling the truth. Besides, the Minister of Petroleum was smiling when we talked about the issue.

Al-Masry: How do you handle problems caused by using fuel oil in running power stations? Do you follow a specific plan? And how does this affect the stations’ expiry date?

Awad: Fuel oil has an effect on power stations. Twenty-two percent of the energy we produce comes from oil fuel-run units. We counter the problem by making chemical additions that diminish the negative impact of the fuel.

Al-Masry: How many governorates applied the 50-percent street light reduction decision?

Awad: All governorates. Anything less wouldn't make sense.

Al-Masry: Was it too small?

Awad: Yes. We were supposed to save 900 megawatts, but we only saved 300 or 400 megawatts.

Al-Masry: When will the total load be adequately reduced?

Awad:  We're praying for lower temperatures.

Al-Masry: Do you have an expected date?

Awad: God knows.

Al-Masry: Of course God knows, but at what point will the electricity network be fully functional?

Awad: We hope new power stations will be working soon.

Al-Masry: But when exactly?

Awad: Not in the summer. We have a station in west Cairo with a capacity of 700 megawatts that is due to come online by October/November.

Al-Masry: Is there an emergency plan at this time of crisis?

Awad: The plan is to reduce the total load. It’s a plan known all over the world.

Al-Masry: What’s the average for load shedding?

Awad: 5 percent for every network.

Al-Masry: But people already complain about long power outages.

Awad: These are just individual cases.

Al-Masry: But it may takes place at supermarkets or meat factories, which could damage inventory.

Awad: They should have a diesel generator as a back-up so meat and products won’t get damaged.

Al-Masry: If we are hit by another heat wave next year, will there be a plan in place to avoid power cuts?

Awad: We’re trying to set another plan for next year, though we hope there will no such heat waves and that people will rationalize their consumption.

Al-Masry: But rationalization is a kind of culture that may not exist in Egypt.

Awad: If people don’t want to cooperate, then you have to know they may be harmed.

Al-Masry: Do you expect power outages to increase in frequency?

Awad: We hope they won't.

Al-Masry: Are you saying decreased consumption is the one and only solution?

Awad: Yes.

Al-Masry: But consumption is part of a bigger strategy. What is that strategy?

Awad: It’s the role of the mass media.

Al-Masry: The Electricity Ministry has talked about new renewable energy sources, such as solar energy.

Awad: There are renewable sources, but at the same time, there are unacceptable levels consumption. For instance, electricity increase rates should be proportional with national income. In Egypt, national income should more than double.

Al-Masry: Are you suggesting that there is an appropriation problem?

Awad: Of course. We have a subsidized tarriff. Nothing is paid from investments. Consequently, the Electricity Ministry bears the cost, which leads to loaning.

Al-Masry: How many factories have been supplied with electricity?

Awad: Around seven cement factories that were not included in the plan.

Al-Masry: Why didn’t you call for rationing electricity consumption from the outset?

Awad: We are trying, but population increases have driven household electricity consumption up from 36 percent in 2006 to 40 percent now.

Al-Masry: Why can’t you persuade the people that air conditioning units lead to increases in temeprature, particularly after their number jumped from 500,000 to 700,000?

Awad: The people do not believe us. And once they have grown used to something, it’s hard to ask them to change.

Al-Masry: It is said that you have a list of names of important people who never suffer power cuts.

Awad: No. Only hospitals, water pumping stations and police stations.

Al-Masry: Was electricity ever cut at a minister’s home?

Awad: Yes.

Al-Masry: When has that happened?

Awad: When the neighborhood he lives in suffers a power outage.

Al-Masry: Was power cut at your home as part of the load-shedding policy?

Awad: Not yet, but not because I gave my address to the electricity authorities. My turn will come.

Al-Masry: It is said that that Sharm el-Sheikh and Heliopolis have not suffered any power cuts.

Awad: Nobody can implement load-shedding in Sharm el-Sheikh, because that would affect Egypt’s reputation.

Al-Masry: What about the resort of Marina?

Awad: Is there anyone there? I don’t mind if they cut the electricity there. But rationing consumption will help us all.

Al-Masry: What do you think of private-sector involvement in the electricity sector?

Awad: It's most welcome.

Al-Masry: How so? Would this have an impact on subscribers?

Awad: Subscribers will have electricity supplied according to private-sector prices.

Al-Masry: But is this not unfair to subscribers?

Awad: That’s why were are implementing this gradually. Again, we call on people to moderate consumption.

Al-Masry: Are you threatening the public?

Awad: No, I’m not. But then who wants to make a loss? Besides, we purchase the production of the three private-sector stations at higher prices. If the private sector is left to sell electricity, it will sell it at higher prices since it wants to make a profit.

Al-Masry: Is the current power crisis related to the fact that many Egyptian engineers have left Egypt?

Awad: No, because our power stations are operating without any problems.

Al-Masry: Then why are there repeated cable breakdowns?

Awad: These are normal breakdowns. Besides, people often hook up cables meant to feed ten air conditioning units to 20 units without notifying the electricity company. The people, too, make mistakes.

Al-Masry: How is it that we export electricity if we need it so badly to meet domestic demand?

Awad: We only export electricity at off-peak times of the day. This is stipulated in our export agreements.

Al-Masry: Why don’t you send a clearer message to the people to moderate their consumption?

Awad: We bought low-consumption fluorescent bulbs at a total cost of LE36 million and sold them to the public at half the cost, but the people have not been responding well.

Al-Masry: When can we say the people have "responded well"?

Awad: When we sell 100 million bulbs for domestic use. We still have 90 million bulbs to replace.

Al-Masry: I noticed you use a fan to cool your office.

Awad: There is a central air-conditioning unit but it’s not that good, so I use a fan. I use a fluorescent bulb for my desk lamp and subdued lighting in the office.

Translated from the Arabic Edition.

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