Ashraf expects to wait when he goes door to door in Cairo’s Ain Shams neighborhood to collect payment on electricity bills.
Usually, he’s faced with a request to come back later when the breadwinner is available, or the occasional argument with a dissatisfied customer who doesn’t like the relationship between the accumulation of unpaid dues and the continuance of service.
In his 10 years of experience, Ashraf never faced being shoved down the stairs — until last month, when an irate customer demanded that he, as a representative of the Ministry of Electricity, come ask for payment as many times as the power has gone out in recent months.
That was not the last time Ashraf was mistreated because of the recent power cuts, and his misperceived control over them.
How did we get to the point where Ashraf’s supposedly uneventful job has become relatively dangerous?
The rotating power cuts are “a reflection of the financial situation we have in the country,” says Hafez Salmawy, the managing director of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (Egypt ERA).
Simply put, Egypt can’t afford to produce the electricity it needs. To put a number on the problem, the ministry needs US$4 billion annually to meet growing demand, and according to Salmawy, it already owes foreign oil companies US$6 billion.
The crisis is not a surprise.
Egypt’s energy sector was put on this path years ago, when the government first discovered the country’s natural gas reserves and quickly proceeded to overestimated its ability to export it, asserts Simon Kitchen, a strategist at EFG-Hermes Holding SAE.
On top of that, former President Hosni Mubarak’s government underestimated how fast domestic demand for electricity would grow — recently up to about 7 percent annually — and made poor predictions regarding the future prices of oil and natural gas.
Based on those miscalculations, Mubarak’s administration chose to export gas to Israel and Jordan as a quick source of foreign cash at prices that quickly became disadvantageous. After Mubarak’s downfall, Egypt had to go back on those deals and also start importing oil. But even so, power plants are 15 percent short of needed fuel.
The shortage, now exacerbated by political turmoil and a free-falling economy, has pressured the government into using crude oil in natural gas-powered plants, damaging the plants’ hardware and decreasing their already insufficient capacity.
And even if international energy companies could be persuaded to develop and explore new gas fields under the Mediterranean Sea, Egypt won’t benefit from the results for many years.
In the meantime, Gulf countries continue to bailout the government by giving it just enough to subsidize electricity another day, but not enough to solve the problem and invest in long-term alternative energy solutions.
Subsidies: The problem and the solution
“Is it reasonable for the public to expect to pay very, very little for a guaranteed electricity supply all year round?” Kitchen asks in a tone that suggests the answer is no.
He asserts that unrealistically low prices distort demand and lead to shortages. Furthermore, industries looking to take advantage of the subsidies focus on energy-intensive fields like cement and fertilizer plants, rather than making use of Egypt’s other abundant cheap resource: labor.
The low price of energy also means there isn’t much incentive to conserve. A study of 26,000 families conducted by the National Statistical Bureau suggested that only 1.7 to 1.8 percent of average household expenditures go to electricity, according to Salmawy.
“There is room for a price increase without hurting standard of living,” he argues.
Kitchen asserts that subsidies encourage smuggling, because gas canisters can be sold at a mark-up on the black market or abroad. Furthermore, he adds, when there are inevitable shortages they are less likely to affect those well-connected, both politically and physically, to the main power grid.
The solution is to remove the subsidy and replace it with cash transfers to the public, a system that has worked successfully in Iran, says Kitchen. Instead of the government writing energy subsidies a blank check, it should let prices rise to market value, and entrust the public with the money and the responsibility to acquire its own energy, he explains.
Once consumers are aware of the actual price tag and pay for energy themselves, they would start be more careful with their consumption, Kitchen suggests.
The energy subsidy currently fluctuates according to global gas and oil prices, but Kitchen’s proposal would allow the government to have a set energy budget, he claims. It could also ensure stability of supply, because investors will no longer be turned off by Egypt’s inability to pay market price.
It could also make alternative energy options more competitive, Kitchen continues, and change the main incentive for investors from cheap energy to cheap labor, creating hundreds of thousands of job opportunities.
But the problem with this solution is that it requires strong political will and a sensible communications campaign to explain it to the public, as well as coordination between various sectors of government, which Kitchen cautions “has historically been a bit of a problem in Egypt.”
What is the government doing about it?
While scrambling to find fuel to keep power pumping, the authorities are also promoting conservation, mostly by employing their favorite metaphor: “If every household turns off a 100/40 watt light bulb, the shortage will be reduced!”
Salmawy points out that he doesn’t run air conditioning or keep his office lights on unless necessary. He gestures to his loose collar and proclaims that Egypt ERA follows the guidelines of the Japanese energy-saving campaign Cool Biz, which encourages workers not to wear ties or jackets.
“We are trying to set a good example,” he says with pride.
A battery of solar panels and a solar water heater on the building’s roof are also part of this effort.
The ERA is also operating a social media campaign called “Turn off the Lights,” asking people to report areas where the street lights inexplicably stay on during the day, as well as another called “Khod Balak” (Watch Out) to notify people about the status of the grid.
The hope is that when people see that consumption is exceeding production, they will quickly limit their own energy usage, sparing themselves and the government a rotating power cut.
So far, the site does not specify where a power cut is expected, but an app that would do so is currently in the works, with an expected launch date of later in May — around the same time the much-talked about smart cards for subsidized fuel are scheduled to be issued.
Sharing the pain
But such gestures towards conservation and alternative energy remain largely symbolic. Most factories already don’t operate at full capacity, and power cuts are expected throughout the summer.
The cuts are distributed in part based on a classification system. Class A, which should supposedly never suffer power cuts, includes hospitals, fire and water stations, special state entities, the metro and industry — the latter is usually asked to reduce its consumption or is notified before the power goes out. After that comes class B, which consists of commercial areas and malls.
Last, and obviously least, are the residential areas.
The power outages were unfairly distributed in the past, Salmawy admits.
“From a company’s perspective, they don’t like to disconnect consumers in Cairo, who are the highest consumption block,” pay the most, and perhaps not coincidentally are most likely and capable of raising a fuss, he explains.
But times have changed — or so the media claims, which has at times portrayed Cairo’s power cuts as a sign of emerging social justice rather than a worsening problem. Either way, Salmawy claims the system is now automated and fair.
“Disconnection is a burden for all,” he claims.
What can you do about it?
For one, you can and should conserve energy whenever and wherever possible. Try not to turn on appliances like washing machines, electric kettles, electric ovens, irons and water heaters during peak hours of consumption, which is currently usually at 7 pm. Use fans rather than air conditioning units. Buy compact fluorescent light (CFL) bulbs.
As for dealing with the outages themselves, rechargeable emergency lights that come on when the power shuts off are widely available, retailing for LE120 and upwards. Rechargeable electric fans can be found at some shops on Abdel Aziz Street near Attaba in downtown Cairo for about LE300.
You can also buy generators or converters, which are essentially rechargeable battery units — but these are expensive solutions for a regular household. The smallest generator or converter available, which would power a handful of lights and a few small appliances, costs roughly LE2,000. Big generators, which can power the average household, air conditioning and all, cost from LE8,000 to LE22,000. The place to shop for them in Cairo is downtown’s Gomhurriya Street.
Generators require fuel, as well as convincing gas station attendants that you want it for legitimate, non-Molotov cocktail-making purposes. They also make noise and release exhaust, so are best kept on the balcony to annoy others instead of your family. A converter, on the other hand, does not have these downsides, but takes anywhere from 12 to 24 hours to charge.
Personally, I would also suggest turning off the television when talking heads start explaining how the crisis is created by the sabotage of sleeper Muslim Brotherhood agents in the Ministry of Electricity.