Schneider Electric is using technological breakthroughs to advance electricity coverage in the region. The company’s Zone President for Africa and the Caribbean, Mohamed Saad, explains its push to ‘turn life on’ everywhere by providing reliable, safe electricity for everyone, its partnerships with the Egyptian government, and determination to develop the first green city in Egypt.
What are the major projects in which Schneider Electric has been involved during the last two years in Egypt?
One of the major projects we participated in is the Ministry of Electricity’s contingency plan. We have also been working very hard on oil and gas projects, and with the new discovery of the gas field in the Mediterranean, additional opportunities have been created. That gives a very strong message to comfort investors in Egypt. We have a market of 94 million people who need energy. If the energy supply is secured, that will definitely create economic development. This is a very positive message. Our solutions for oil and gas sector are designed to meet the needs for both upstream and downstream operations, which are definitely among the key markets for us.
We have also been working in the renewable energy sector. Our portfolio of solutions and products vary from the simple application of the rooftop solar solution to complex ones. There are also definite successes in the infrastructure projects, such as tunnels, and we export our solutions and products as well.
Regarding the launch of 'Smart Panels', who are they oriented to and how can they help to achieve a more efficient use of our resources?
Everything has to be connected, smart and digitalized in order to achieve energy efficiency. When we talk about the 'Smart Panels’, we talk about connected panels from which you can get information, to be processed and make decisions.
That will definitely have a positive impact on electricity consumption, particularly now that the cost of energy is increasing in Egypt. This will make us think more about the better utilization of energy. The panel will be able to get customer data, tell them when the consumption level peaks or hits its low, and hence they will be able to adapt the action plan accordingly in order to reduce energy consumption.
Smart panels are designed to reduce consumption and carbon footprint, and increase efficiency.
This is a technological breakthrough, and this connectivity is one of the promises of Schneider.
Moreover, you can make changes very quickly using your tablet or your laptop, instead of going to the site and waiting maybe three or four hours.
In addition to ensuring reliability, smart panels are a very efficient solution when it comes to saving time and money.
Do you believe that the country is on track to achieve the goal of generating 30,000MW by 2020?
There is one thing that we all agree upon: you cannot have any economic development without energy. At Schneider Electric, we believe that we have to supply technology that will “turn life on” – life everywhere, for everyone at every moment. This can only be achieved when you can secure energy that is safe, reliable, efficient and sustainable. With all the new challenges that we face and the transformations going on, the need for digital energy has become inevitable.
Egypt's population is estimated around 94 million people, 60% of which is under 30 years old. This young population needs good education, to have proper quality housing they can afford, jobs, and access to a good healthcare system. You cannot do this without energy, and Egypt's current capacity has been shrinking since the revolution, being now barely enough to supply the daily use.
On the other hand, we also need to have an industrial revolution; we need more factories to be built, attract more tourists to Egypt’s various tourism destinations, and so on. All of this can only become reality if you have energy.
Actually, when it comes to the willingness and the plans of the government to boost GDP's growth, we must keep in mind that such growth cannot be sustained without energy. Egypt has been blessed to have a very professional minister in charge of the Ministry of Electricity, who was able to break world records by injecting around 3,000MW in a short period of six months. That was a remarkable job! He was able to find the funding, get the companies start working and getting the job done in a very short period of time. So certainly, to keep on the right track, we have to reach at least the generation of 30,000MW.
In September 2015 you, together with the Ministry of Electricity, submitted a proposal for a South Sinai solar energy project to develop a 50MW solar power plant, in order to raise the efficiency of Egypt’s national grid. At what stage are you at the moment
We have been operating in Egypt for a very long time – over 25 years now – with more than 1,400 employees. We have one of the biggest factories in Africa and the Middle East, and we have succeeded at maintaining our operations and even expanding them during the periods of economic downturn. We have also succeeded at introducing the latest technologies known worldwide at our ISO-certified factory located in Badr industrial city; so I can proudly say that we are very well prepared.
We have more than 750 engineers who constantly receive a very high level of training in order to adjust to the market's demands. Furthermore, we have worked very closely with the Ministry of Electricity on the contingency plan and we succeeded in providing more than 50% of the generation capacity.
We have an important market share when it comes to the new plan, and we executed it right on time with the latest technology and with the capacity of a locally developed engineering team. This was very highly appreciated as a sign of clear cooperation between the private and the public sector. We understood the criticality of the demand from the government, and we have been preparing for it years before. So when the opportunity came, we managed to meet the government's expectations.
Regarding South Sinai's solar plant project, first of all, it is important to highlight that if you want to increase power generation capacity, you cannot do it while increasing CO2 emissions at the same time. If you keep on polluting the environment while producing energy, you end up destroying the planet for the coming generations. So the dilemma here is how to increase power generation capacity while being more efficient and less polluting.
At Schneider Electric, our target was to overcome this dilemma. In order to do this, we need to be more efficient and inject clean energy into the network.
We, at Schneider Electric, are very active in this field. We are very serious and trying to set the industry standard on this direction. Our commitment is to quantify the carbon impact for all of our customers’ new large projects. Once you quantify it, you are able to measure the negative impact you have on the environment.
We also have designed all of our new offers in an eco-friendly way. This is our second most important commitment. The third one is to make sure that 75% of our project revenues come from green, premium, eco-labeled products. The fourth one is to save 120,000 tons of CO2 emissions and implement a circular economy of the lifetime service of our products. We try to reutilize the products in a very efficient way in order to reduce waste.
We also implement energy electricity storage initiatives and do extensive research to develop new energy storage systems. This is very much linked to solar production, as saving energy (storage) is extremely expensive today, and we are committed to try to drive down this cost in a more affordable manner.
The last commitment is to eliminate SF6 (Sulphur Hexafluoride) from the products we produce in the lapse of 10 years. This will definitely help reduce the CO2 emissions.
I had the honor of meeting the Prime Minister of Egypt in November 2015, and we proposed to develop the first green city in South Sinai, in Sharm El-Sheikh. This city should be showcased as Egypt's willingness to move on to renewable energy, especially now that President El-Sisi has participated at the COP21 conference held in Paris in December 2015. He is really delivering a message on behalf of Africa, which is quite a very big and remarkable step. We are trying to make it concrete, by delivering the first green city in Egypt.
Regarding the goal of 20% of renewable energy by 2020, do you think that all the necessary conditions have been set to achieve it?
There is a feed-in tariff that is one of the most attractive ones in the world today. Three or four years ago, a feed-in tariff seemed very difficult to achieve; it seemed like daydreaming. Actually, we used to wonder if Egypt would ever be able to do a feed-in tariff and how attractive it would be.
A really great job was done in this aspect, as the Egyptian government had defined a feed-in tariff that is very attractive; it succeeded in attracting a lot of consortiums that now have started working to produce energy as per the mandates from the government.
What opportunities do you see for French companies willing to invest in the energy sector in Egypt?
Lots of French companies are already present and operating in the Egyptian energy sector. We, as a technology leader in this aspect, have been working with many companies from different parts of the world. From my own experience, I can say that French companies and consortiums have been very active after the application of the new feed-in tariff.
What you need is a financing institution, the government’s willingness and a technology leader. We are lucky to be the world’s technology leader, and we are strongly advocating the French technology here.
Energy, as an investment in Egypt, is definitely a winning horse. You have the domestic demand, a government that is fully aware that they will not be able to create any economic development or GDP growth if there is no energy to power it, and at the same time there are some strong technology leaders present in the market, which can provide quick answers whenever the actual demand is down. For example, emergency plans of the solar feed-in tariff opportunities.
Whenever there is a serious project that has the needed funds and can operate in a favorable legal framework, you will see serious players answering positively. They are all very much convinced of the potential of the domestic market here in Egypt and the potential export market to the rest of Africa and the Middle East region.
Schneider Electric has projects and offices across the entire region. What are the main comparative advantages you find in Egypt?
What we have today is a relatively qualified engineering base with high-level engineers. In addition, we have engineering centers that serve lots of countries abroad with relatively low cost. Those centers are prepared to respond to very high technical levels. So, we have high-level technical professionals in Egypt that can make a difference, because their cost is still competitive when compared to other nationalities.
We also have regional call centers, where people are qualified in terms of languages and communication skills. Again, they are competitive and can count on the infrastructure that grows with it. It is not always easy, but with a little vision of what you exactly need you can end up having the right infrastructure to back up telecommunications.
On the other hand, we also export lots of equipment to Africa and the Middle East. What we need to further develop is more support to exports, a more-developed logistics and supply chain infrastructure that will make life easier to export. The Suez Canal project will definitely add value for Egypt, in terms of making Egypt a regional hub for logistics and transportation. We are expecting the projects around the Suez Canal to be fast-tracked.
The trade agreements are also very important in this case. The trade agreement between eastern and southern African countries – the COMESA – was highlighted as one of the most important agreements in this regard, and we, as manufacturers, need to push here. We need to go to these markets with our quality products and open new doors. Trade is the best way to create solid political relations.
From your point of view, what has been the impact of the current economic and political stability that Egypt has achieved under this administration?
Egypt has been showing great resilience over the past couple of years, during the turmoil that hit the world economy in 2008, the Arab Spring in 2010, and a very hectic transition period including the second revolution in 2013. Egypt seemed to be a country set up for a very chaotic and doomed situation, but the reality was a little bit different. The reality was that Egypt's economy did not really show deterioration as expected in such political and social instability. The reforms that have been implemented since the election of President El-Sisi gave a clear message on what are the priorities of the country in the current stage.
Investors are always looking for two things: stability and prospects. In terms of stability, there is clear determination on creating sound fiscal and financial policies. Moreover, a lot of effort is being put into boosting the dynamics that would attract investors to Egypt. For example, the economic conference that took place in Sharm el-Sheikh earlier in 2015 was more of a political signal than an economic one. It was a way of expressing that the country is stable and that it is capable of attracting key decision makers of major multinational companies, while presenting concrete projects simultaneously.
In this conference, the Egyptian government presented actual and solid insights and guidelines on what we need to develop as a country in terms of projects, what the key milestones are, how they will be financed, and how the government will facilitate a favorable regulatory and legislative framework to support the new projects.
It was quite a solid message, followed by real-life implementations. For example, the government presented the one-stop shop that enables investors to obtain licenses and permits from one place. In addition, the government signed a number of bilateral agreements with certain countries that will facilitate the transport of products and people.
“You must be the change you wish to see in the world.” This quote from Gandhi sums up the mindset of Schneider Electric. How would you like to change Egypt?
What we want to leave here is the willingness to actively participate in solving Egypt's energy problem and to provide reliable, safe, efficient and sustainable energy for the Egyptian population. We want to produce more energy while consuming and polluting less.