Siemens and GE Ink Big Orders with Egypt
The Egypt Economic Development Conference (EEDC) in Sharm El-Sheikh resulted in some big agreements for the Egyptian government including a reported $10.5 billion deal with Siemens and a $1.7 billion order with GE.
The conference was held March 13-15, 2015, and was purported to be a key milestone of the government's medium term economic development plan, which is designed to bring prosperity and improved social services to the nation's people.
One of the EEDC's self-proclaimed objectives was to firmly position Egypt as an attractive destination on the global investment map and it seems to have made a believer out of Siemens. The company announced on Saturday that it would build a 4.4-GW combined cycle power plant in Beni Suef, south of Cairo. It will also install 2 GW of wind power capacity and build a factory in Egypt to manufacture rotor blades for wind turbines.
Siemens signed two additional memorandums of understanding during the event. One will see Siemens propose additional combined cycle power plants with capacity of up to 6.6 GW, while the other would add 10 substations to the country's grid to improve the reliability of its power supply.
"Egypt needs a powerful and reliable energy system to support its long-term, sustainable economic development, and experienced partners who understand the specific challenges facing the country," Joe Kaeser, president and CEO of Siemens AG, said in a press release announcing the agreements. "We are part of Egypt's society and proud to shape Egypt's future together."
According to the EEDC's blog, Egypt's energy sector was adversely affected by the legacies of two revolutions in 2011 and 2013. Bridging the supply-demand gap and increasing energy efficiency are two of the top priorities in its current policy agenda.
The Beni Suef plant will be built in four modules, each consisting of two H-class gas turbines, two heat recovery steam generators, one steam turbine, and three generators. The plant will help meet policy objectives in two ways, as it combines high output-helping bridge the supply gap-with record-breaking levels of efficiency.
While the GE deal was only announced on March 13, the company is already well on its way to fulfilling the order. The contract supports the "Egyptian Power Boost Program" by adding 2.6 GW of capacity to meet peak summer demand. GE says that nearly three-quarters of the advanced gas turbines-34 of 46 machines-being supplied have already arrived in Egypt.
GE P&W's Power Generation Products business, in consortium with Orascom, will build two power plants in Egypt with a total capacity of 1,495 MW utilizing 12 9E heavy-duty gas turbines. GE's Distributed Power business is supplying 34 aeroderivative gas turbines-14 LM6000 and 20 TM2500+-capable of providing 1,197 MW for onsite electricity.
"The government is creating a positive environment for businesses through the removal of trade barriers, while the private sector brings in the entrepreneurial spirit to build a whole new value chain of small and medium enterprises," said Jeffrey Immelt, chairman and CEO of GE.
The wind power additions are designed to diversify the country's electricity supply. The EEDC blog noted that Egypt's energy mix remains skewed towards hydrocarbons, with 88% of its generation from oil and gas. While the government has set a target of 20% for renewables by 2020, the current mix includes only 9% from hydropower, 2% from wind, and 1% from solar.
"Egypt has great potential for wind power generation, especially in the Gulf of Suez and the Nile Valley," said Markus Tacke, CEO of Siemens' Wind Power and Renewables division. "We are proud to be working with the government and people of Egypt to tap this potential."
-Aaron Larson, associate editor (@AaronL_Power, @POWERmagazine)
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