The Future Energy Corporation (FEC) has decided to take the first step and tackle one of the vital issues facing Egypt, namely the energy issue. Angy Essam interviewed Sherif Abdel-Messih, the chief executive officer of Future Energy Corporation, about “The Future of Energy” conference through which the company is preparing to put solutions for the current energy problems.
What is the Future Energy Corporation?
The Future Energy Corporation, which was established in 2009, is a next generation energy company, developing advanced energy solutions and renewable energy infrastructure with subsidiaries in Europe, the Middle East, Latin America and the Caribbean. FEC performs infrastructure and utility scale projects, distributed generation projects, micro-grids and advanced energy storage. Across geographies and sectors, FEC specialises in pioneering business models that bring the most advanced technologies to the markets we operate in.
Why has FEC decided to hold “The Future of Energy” conference in Egypt?
This year specifically witnessed the occurrence of many energy conferences and events, because this is the first year in 20 during which the government has opened the door for the private sector to make investments in electricity. But unfortunately all the previous events that took place this year were disappointing and weren’t on the optimal level, so we decided instead of waiting for the right conference to address Egyptian energy goals we should organise the energy conference that we have always dreamed of. Our aim is to make an effective energy initiative, not just a conference.
What goals are the conference expected to achieve?
The event aims to shape the national energy agenda in order to draft a roadmap to achieve the vision of becoming one of the top five largest energy exporters in the Middle East by 2030. “The Future of Energy in Egypt” is a two-day high profile forum that will bring together leaders from the global power sector, influential figures from the Egyptian business community and government, international investors, and other industry leaders. Important announcements will be made regarding the new Egyptian electricity law, the Feed In Tariff Program, and other topics related to private investment in the Egyptian power sector. Egyptian business moguls will share insights and advice based on their experience in investing in the Egyptian power sector.
In addition to insights on investing and doing business in Egypt and their outlook on the country. Business leaders and government officials will discuss the most pressing issues related to the Egyptian energy and power sectors with the intention of shaping the energy agenda in the right direction. Top management from leading power companies and renewable energy companies will share their insights on the latest developments in their industries and their latest offering for the Egyptian market. International investors, project developers and other attendees will benefit from more than three hours of organised valuable networking. This forum is expected to be equivalent to the Sharm El Sheikh Economic Forum, the difference is that our forum will be dedicated to the energy sector only.
What companies will participate in the conference, and who are the speakers?
About 150 energy entities are going to participate in our energy conference. Our speakers will all be distinguished figures who have a wide experience in the energy field, which will aid in drawing the optimal energy agenda. The first speaker is Naguib Sawiris, the chairman of Orascom holding company, Mohamed Shaker Elmarakbi, the minister of electricity and renewable energy, Hani Elmessiry, the governor of Alexandria, Osama Kamel, the former minister of petroleum and natural resources, Arturo Herrero, the chief strategy officer and head of emerging markets at Jinkosolar holding company, Mohamed Sobki, Chairman of New & Renewable Energy Authority in the Ministry of Electricity, Hafez Salmawy, managing director of Egyptian Electricity Regulatory Authority, Nada Shousha, Regional Manager Egypt, Libya and Yemen, IFC, Ahmed Demerdash Badrawy Sodic chief executive officer, as well as me.
What are the main issues to be discussed at the conference?
In the first day we will discuss developments in investment opportunities in the power sector, auctions, feed in tariff and other frameworks. We will also talk about financing, bankability, and opportunities and challenges to unlock investment potential, as well as insights from global leaders on utility scale solar power, the fastest growing power sector. We will discuss with Egyptian business leaders about renewable energy adoption, investments and energy industry development. The first day will also include presenting the 2025 energy vision on how to make Egypt a regional energy hub. On the second day we will tackle optimising the fuel mix, whether coal, natural gas or nuclear power. Also we will discuss live solar power auction. At the end of the second day we will talk about utility scale wind power in terms of reducing the cost of electricity and the energy water nexus.
How would you evaluate the current state of Egypt’s energy sector?
Egypt is an energy rich country but unfortunately we seem like energy poor country because we only use 2 per cent of our proven reserve. If we talk about solar energy, Egypt could create enough electricity needed to cover all its needs if it exploits only 0.01 per cent of its solar energy potential, and by using only 10 per cent it can cover all global electricity needs, making Egypt a truly major energy hub. We need to export energy to Europe and the Gulf area, build infrastructure and develop manufacturing in renewable energy. Ten years ago, energy manufacturing revenues were $40 billion, last year they were more than $300 billion, and if we estimated the revenues after 10 years it will reach $1 trillion. If we calculated only 2.5 per cent of the $700 billion growth, it would amount to $20 billion, which would exceed the annual revenue that comes from any other industry. Our biggest sources of energy are solar, wind and natural gas. We don’t have a large enough coal reserve, so we have to focus on using these three sources. Some wrongly think that we have a shortage in natural gas, which is not true. The problem is that we only produce 2 per cent from the amount of natural gas we have. The problem lies in natural gas production, not its amount. We have a large reserve but we produce only a small amount so we must give more attention to developing and enhancing natural gas production.
What about the status of Egyptian petroleum?
Egypt is not rich in petroleum, but we need to improve the efficiency of the petroleum sector and petroleum refineries. We are wasting more than half of our crude oil because refineries’ equipment is not efficient, so we can increase our petroleum production if we developed the refineries. Cars in Egypt have low efficiency as they consume double the fuel they should consume, so we must find a way to reduce car petroleum consumption.
What are the major problems that the energy sector is currently facing?
The energy sector is now facing a lot of problems. The government has been dominating the energy sector for decades, as such it suffers from bureaucratic red tape. This is proven by the fact that power plants controlled by the government are less efficient than the ones run by the private sector. We also have problems in production, refineries, energy laws, power plants and energy pricing. One of the major problems is that we don’t have a legitimate energy vision.
In your view, what are the solutions to these problems?
First, restructuring the energy sector. We need to give more chances to the private sector as it has proved to be more efficient. We also need to develop project refineries and power plants as well as modernise our energy laws, whether the industrial laws or other laws. We must increase our energy production and eliminate all the production problems. Prices have been subsidised for decades and this has led to bad consumption habits by consumers. If something is very cheap you will not manage it well, so energy costs need to go up.
We should also have a clear energy vision. We should bear in our minds that the energy sector in Egypt is not an isolated sector, and that it is affected by many factors such as finance, politics, consumer behaviour and technology, which is moving very fast. There should be cooperation between the Ministry of Electricity and other ministers because we want to have strong energy industry in order to export energy globally.
Having two ministries responsible for the energy sector in Egypt, which are the ministries of electricity and petroleum, is creating a conflict of interest abroad. We should have one energy ministry which would optimise all the energy resources in a way that would cover all our needs and export the surplus. The energy laws need to be modernised as they are very old, not in line with the modern status. We must pay more attention to implementing major investments in energy to compete with the global energy industries. We could benefit much from studying the success stories of other countries which have succeeded in a short period of time to become top energy exporters. We also have to increase the productivity of natural gas, in addition to upgrading refineries and developing public transportation and infrastructure. There should be a national comprehensive energy goal.
What will be FEC’s next step after the conference?
A lot of work will come after the conference, the forum is just the start. We will meet with the energy ministers to discuss the results of the conference, after which we will brief the prime minister on the results before putting the plans in the hands of President Abdel-Fattah El-Sisi.
