Wind power could be cheaper than solar energy in meeting the Middle East’s energy needs, says Siemens boss Joe Kaeser in wake of $9bn Egypt deal.
“Wind is a very, very cheap source of energy in Egypt and also in Saudi Arabia and desert countries,” said Joe Kaeser, President and CEO of Siemens AG, on the sidelines of the second session of the German-Egyptian Joint Economic Committee in Berlin.
While countries in the MENA region receive a lot of sunshine, solar energy is often not as practical because the efficiency of photovoltaic cells decreases the hotter it gets, he noted. Additionally, solar panels would also need to be cleaned extensively to prevent dust from gathering. “If you have to build a desalination plant just to get the water to clean the solar [panels], you better go after wind.”
Kaeser’s remarks came after Siemens signed contracts up to 12 wind farms comprising around 600 turbines in Egypt. The wind farms, to be located in the Gulf of Suez and West Nile areas, will have an installed capacity of 2 gigawatts (GW). Together, the projects will add an additional 16.4GW to Egypt’s national grid, helping tackle the North African nation’s energy crises.
Commenting on the deal, Kaeser said Siemens will focus not just on power generation but also improving distribution capacity to ensure power reaches areas where it’s really needed.
“It doesn’t matter how much power generation you build. It matters more how much power gets to the people,” he said, noting that Siemens had developed comprehensive grid and distribution planning for the contract.
Egypt’s recurring power cuts have previously prompted analysts to call for more investment into its energy sector.
“Egypt is facing severe issues in terms of power shortages, and there is no immediate solution in sight. [But] this crisis presents a number of opportunities, especially in alternate sources of energy that can lead to a reduction in the import bill and wasteful subsidies,” said Abhay Bhargava, Frost & Sullivan’s associate director and regional head of energy and environment practice in the MENA region.
The energy situation also presents opportunities for more private sector participation in power generation, he observed.
Despite the potential of renewables, Egypt’s power needs have to be addressed by a mix of renewable energy and clean, conventional power plants, Kaeser noted.