Egypt is now close to awarding a contract to build a 1,000 megawatt wind farm, to be up and running in 2016, that it first announced last year.
A wind farm this size has few equals worldwide. Egypt has some of the best wind power potential in the world, and its government is beginning to tap into this source of free fuel in earnest, since passing its plan to get 20% of its electricity from renewables by 2020, in order to stave off climate change.
For example, its New and Renewable Energy Authority has contracted for a 200 MW wind farm on the coastline of the Red Sea with the Spanish company Gamesa, a region where it already has 430 MW of wind farms in production.
From its current level of just 550 megawatts supplying energy to the national grid, Egypt plans to build another 13 times this much production in wind power by 2020. With just this one 1,000 megawatt wind farm proposed, the nation would slice 1,000 megawatts off that goal to get 7,200 megawatts from wind power by 2020.
In the past, Egypt has qualified for funding under The EU’s cap and trade plan using Clean Development Mechanism (CDM) funds.
But that may not continue. The EU restricted CDM funding of renewable energy to just the very least developed nations at the Durban climate negotiations, beginning this month.
So the financing mechanism will mean that two thirds of total future capacity will be privately owned, and to motivate the building of renewable projects, the Egyptian government will decide on a feed-in tariff payment level for renewable energy by the end of the year.
Feed-in tariffs are one of the fastest ways to grow green power, using simple greed to drive investment. If energy generators have a guarantee upfront of what they will be paid for every kilowatt-hour of electricity they can produce for the next 20 to 30 years, the investment is much easier to take to the bank.