The heat is on
|Thursday, September 2,2010 08:59|
|By Issandr El Amrani|
I am spending this Ramadan outside of Egypt, in cooler climes. I suppose I should be grateful to have avoided both the blistering August heat and the power cuts that have plagued the country in the last few weeks.
For the first time in about 30 years, the Islamic holy month starts and ends during the summer and will continue to do so for the next three or four years. What has changed since the last time this happened is the way in which Egyptians live.
The reason for the recent power cuts is a combination of several facts. One is that during Ramadan people spend more time indoors, consuming more electricity by watching TV, having the lights on and using air conditioners and other appliances. Another is that the number of households equipped with air conditioners has increased dramatically, pushing up annual electricity growth to 13.5 percent over the last year. Hassan Younes, the much-maligned minister of electricity, warned in June that the number of air conditioners in the country had gone from 700,000 in 2006 to over three million in 2010--that is, they have more than quadrupled. This is in part because air conditioner units are now cheaper, thanks to competition from China which has driven prices down. But part of it must also be because there is an increasing number of people who can afford them.
One of the features of Egypt’s current predicament is that a small and slowly increasing middle class now has access to luxuries that were once reserved for the very few, while the far larger and more rapidly growing poor are still out in the heat. Although they are less poor than they were during the last summer Ramadan 30 years ago, they may very well be more dissatisfied at not having air conditioning (and many other luxuries and even basic necessities) as they are constantly faced with advertisements for Carrier or Unionaire units they can’t afford.
Combine Ramadan and increased electricity consumption with the expectation of cooled air during the summer and a national electricity supply that was already on the edge of overload, and you have the current crisis.
This was predictable. A few months ago, I met a European researcher who was conducting a survey on electricity production and consumption in Egypt. His conclusion was dire: If more money is not invested in power generation immediately, within a few years there will be rolling brown-outs and black-outs throughout the country. The problem of recurrent power cuts hitting even strategic areas such as the capital, which appeared to have been solved in the 1990s when many new power plants were built, is set to make a comeback. Still, in recent years there has been under-investment in new infrastructure even as consumption--driven partly by restored economic growth rates under the Nazif government--has shot up.
The Ministry of Finance, which finds itself under pressure to control public debt, must pinch pennies and would rather rely largely on the private sector to finance new power plants. Indeed, it is even considering such a model for the new wind power facilities on the Red Sea as well as the nuclear plant planned for al-Dabaa. In the medium to long term, this means a fundamental change in the energy policy of the country, with a smaller role for government as it becomes a regulator rather than a producer. Already this year regulations have been changed to allow power-hungry industries, such as cement, to secure their energy needs privately. Such changes are just one small part of the vast but stealthy economic liberalization undertaken by the current cabinet, which will have a profound long-term impact.
A new energy policy, experts agree, is long overdue and necessary. It is unfortunate, however, that the debate over phasing out ruinous energy subsidies (about LE65 billion in the last budget) is marked by secrecy on the part of the regime, knee-jerk opposition by its opponents and a general lack of informed commentary in the media.
Of course, as older Egyptians will no doubt remember, back in the last August Ramadan, in 1979, power cuts were also frequent. This was because the 1967 and 1973 wars had bankrupted the state and delayed investment in infrastructure necessary for a fast-growing population. At the time, you couldn’t even count on the telephone network to work reliably. This shows how much the country has changed, giving rise to new social expectations which the government must manage. The power cuts that were once the rule for most Egyptians are now no longer acceptable.