The Japanese government has decided to offer a loan of about 10 billion yen (around $88,829,700) to support construction of a gigantic solar power plant with a large-capacity storage battery system in Egypt.
A large-capacity storage battery system is a large-scale recharge and discharge equipment built into the electrical system of a power plant and other facilities. This equipment is seen as essential to ensuring a stable supply of electricity from renewable sources, as weather can greatly affect the amount of power generated. There are several types of equipment, including lithium-ion and sodium-sulfur batteries. Japanese companies such as Sumitomo Electric Industries and NGK Insulators have made progress in technology for high-capacity power storage.
Egypt is expected to hold a public tender open only to Japanese companies with advanced battery technology. The government hopes this will give the Japanese firms a leg up in the rapidly expanding renewable energy markets in the Middle East and North Africa.
Egyptian President Abdel-Fattah el-Sisi is scheduled to make his first visit to Japan from Feb. 28 to March 2, during which a written agreement on the project is expected to be signed.
According to sources, the plan is to build a 20-megawatt solar power plant with a 30-megawatt capacity storage facility in the eastern Egyptian city of Hurghada. The plant is to be completed by 2019 and would supply electricity to about 7,000 households.
The total construction cost is expected to be about $92 million (about 10.5 billion yen), which is to be fully covered by a yen loan to be paid back over a long period at a low interest rate.
This would be Egypt’s first major solar power plant equipped with a large storage facility.
A senior official of the Egyptian Electricity and Renewable Energy Ministry told The Yomiuri Shimbun that the government had high hopes for Japan’s storage technology, due to its excellent durability and stability. The official revealed that bidding for the project would only be open to Japanese companies or consortiums led by Japanese firms.
Egypt produces oil and natural gas, but it also imports energy from other countries. To address this, the Egyptian government has set a goal of increasing the proportion of energy generated from renewable sources from the current 3 percent to 20 percent by 2022.
Other resource-rich countries in the Middle East and North Africa are also expecting demand for electricity to rise, and are therefore looking to renewable energy.
Projects in the Middle East to construct solar power plants capable of generating more than 10 megawatts rose from three in 2013 to 40 in 2015, according to the Middle East Solar Industry Association, which is headquartered in the United Arab Emirates. There are also several plans to build wind power facilities to make use of strong winds in coastal areas.
Under its growth strategy announced last year, the Japanese government called for domestic firms to secure 500 billion yen in earnings from the advanced storage batteries businesses as of 2020. “We want to attract global attention with achievements in Egypt,” a government official said.