CAIRO // This summer, Egypt's energy crisis manifested itself in one of the clearest signs of how inefficient subsidies have paralysed the nation's economy.
A severe electricity blackout hitting many parts of Cairo shut down the Egyptian stock exchange and delayed trading for two hours. When the market finally opened, stocks fell in value by about US$164 million (Dh602.3m) in the early hours before regaining lost ground later. The exchange quickly moved to assure the market it would not happen again.
"It was frustrating for us but it's the first and last time it will happen,"says Jakalene Makar, a trader at CI Capital in Cairo.
Government officials have blamed the daily cuts on authorities shutting down power to ease the load on the grid. Networks have failed under increased demand for electricity due to the scorching heat that coincided with Ramadan.
Mahmoud Balbaa, the electricity minister sworn in as part of president Mohammed Morsi's new cabinet, said last week thieves had also been stealing high voltage cables, exacerbating the shortage.
Egypt runs one of the most inefficient subsidy systems in the world, where two thirds of the total subsidy bill of 150 billion Egyptian pounds (Dh90.69bn) goes on fuel. Much of that is used to keep natural gas below market prices. About 90 per cent of the country's electricity generating capacity is from natural gas. It is no surprise gas shortages affect the electricity supply in the hottest months of the year during peak demand.
"The government is not resolving this issue in an intelligent way," says Magdi Nasrallah, a consultant to energy companies in Egypt and the founding chairman of the department of petroleum and energy at the American University in Cairo. "The easy way out is to simply control utilisation and whenever there is a problem they simply shut down the plant. They have to be more creative."
Mr Nasrallah says an easier quick fix, one that does not impact long-term solutions, would be to reduce gas exports as much as possible and use it domestically, work on developing natural gas resources and new discoveries and push ahead with nuclear power plans.
"It will get worse as time goes by but it is inevitable that renewables will increase in the next few years," he says.
With the doubling of electricity use in the past 10 years and demand showing no signs of wavering, plans are under way to tap wind, solar and nuclear power sources to lift electricity generation by at least 4,000 megawatts.
The government is hashing out short-term solutions such as trialling a new power plant that could generate up to 2,000MW of electricity daily. An electricity swap with Saudi Arabia has also been announced. Under the agreement, each country will borrow from the other during hours of peak demand, exchanging up to 3,000MW daily. There is even talk of enforcing a curfew where shops would shut by 9pm and restaurants by 11pm, to conserve energy.
Despite these hurried solutions, industry players say the blackouts are a warning to Egypt's authorities to either find alternative energy sources or push through much-needed loans to fund its wasteful subsidy system.
"Sooner or later the resources will run out so it is a must that Egypt diversifies its energy resources," says Ali Islam Metwally, the former chairman of the Egyptian Atomic Energy Authority.
business@thenational.ae
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
if you go
The flights
Air Astana flies direct from Dubai to Almaty from Dh2,440 per person return, and to Astana (via Almaty) from Dh2,930 return, both including taxes.
The hotels
Rooms at the Ritz-Carlton Almaty cost from Dh1,944 per night including taxes; and in Astana the new Ritz-Carlton Astana (www.marriott) costs from Dh1,325; alternatively, the new St Regis Astana costs from Dh1,458 per night including taxes.
When to visit
March-May and September-November
Visas
Citizens of many countries, including the UAE do not need a visa to enter Kazakhstan for up to 30 days. Contact the nearest Kazakhstan embassy or consulate.
The specs: 2018 Maxus T60
Price, base / as tested: Dh48,000
Engine: 2.4-litre four-cylinder
Power: 136hp @ 1,600rpm
Torque: 360Nm @ 1,600 rpm
Transmission: Five-speed manual
Fuel consumption, combined: 9.1L / 100km
CONFIRMED%20LINE-UP
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Directed: Smeep Kang
Produced: Soham Rockstar Entertainment; SKE Production
Cast: Rishi Kapoor, Jimmy Sheirgill, Sunny Singh, Omkar Kapoor, Rajesh Sharma
Rating: Two out of five stars
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Get Out
Director: Jordan Peele
Stars: Daniel Kaluuya, Allison Williams, Catherine Keener, Bradley Whitford
Four stars
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
The specs: 2017 Dodge Ram 1500 Laramie Longhorn
Price, base / as tested: Dhxxx
Engine: 5.7L V8
Transmission: Eight-speed automatic
Power: 395hp @ 5,600rpm
Torque: 556Nm @ 3,950rpm
Fuel economy, combined: 12.7L / 100km
JAPAN SQUAD
Goalkeepers: Masaaki Higashiguchi, Shuichi Gonda, Daniel Schmidt
Defenders: Yuto Nagatomo, Tomoaki Makino, Maya Yoshida, Sho Sasaki, Hiroki Sakai, Sei Muroya, Genta Miura, Takehiro Tomiyasu
Midfielders: Toshihiro Aoyama, Genki Haraguchi, Gaku Shibasaki, Wataru Endo, Junya Ito, Shoya Nakajima, Takumi Minamino, Hidemasa Morita, Ritsu Doan
Forwards: Yuya Osako, Takuma Asano, Koya Kitagawa
The%20Continental%3A%20From%20the%20World%20of%20John%20Wick%20
%3Cp%3ECreated%20by%3A%20Greg%20Coolidge%2C%20Shawn%20Simmons%2C%20Kirk%20Ward%3Cbr%3EStars%3A%20Mel%20Gibson%2C%20Colin%20Woodell%2C%20Mishel%20Prada%3Cbr%3ERating%3A%203%2F5%3C%2Fp%3E%0A
Our legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Company profile
Name: Back to Games and Boardgame Space
Started: Back to Games (2015); Boardgame Space (Mark Azzam became co-founder in 2017)
Founder: Back to Games (Mr Azzam); Boardgame Space (Mr Azzam and Feras Al Bastaki)
Based: Dubai and Abu Dhabi
Industry: Back to Games (retail); Boardgame Space (wholesale and distribution)
Funding: Back to Games: self-funded by Mr Azzam with Dh1.3 million; Mr Azzam invested Dh250,000 in Boardgame Space
Growth: Back to Games: from 300 products in 2015 to 7,000 in 2019; Boardgame Space: from 34 games in 2017 to 3,500 in 2019
Sour%20Grapes
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