How an industrial energy efficiency revolution was ignited in Egypt
In 2013 when UNIDO launched its Industrial Energy Efficiency Programme in Egypt, the country was still reeling from political unrest. This was followed by a blistering summer during which Egyptians faced spontaneous electricity blackouts for up to six hours. As the economy went into a downward spiral, the country’s heavy industry sector was particularly hard hit. For just about everyone the focus was simply keeping the lights on.
Looking back, UNIDO-Egypt’s energy programme manager Gihan Bayoumi admits that it probably wasn’t the most logical moment to launch a national initiative to accelerate industrial energy efficiency, especially when energy subsidies kept the price of fuel at artificially low levels.
“It wasn’t easy at all to introduce the idea of energy efficiency to the industrial sector in Egypt,” explains Gihan.
“Even though we were facing blackouts, it was difficult for us to talk about energy conservation and efficiency because most of the companies couldn’t see the value when the resource was so cheap,” recalls the former chemical engineer. At the time, Egypt’s energy subsidy bill was $17.4bn, more than 20 per cent of total state expenditure.
A lack of local success stories demonstrating the vast potential of industrial energy efficiency, was another significant challenge for Gihan and her small team in the early days.
“We didn’t have any recent experience or relevant case studies to present to potential clients, to prove just how good energy management could be for them,” she explains.
Adding to all of these challenges, particularly for Gihan, was the reality that she is a woman operating in a very traditional and masculine field.
“Imagine me, a woman with limited networks in these sectors, knocking on the doors of these very large companies trying to tell them that they should listen to me and invest in energy efficiency!,” recalls Gihan fondly.
Yet, despite all of these challenges, Gihan and the UNIDO team persevered and eventually gained trust and breakthroughs among the country’s major industrial companies. This included training the first national cohort of energy management system (EnMS) consultants in 2014 who would eventually help to certify more than 15 organizations in the ISO 50001 energy management standard. The project provided technical support to over 70 companies, which saved over 1,220 GWh of energy. The energy saved contributed to a total of 3.44 million tons of CO2 equivalent avoided over a 10 years period. This is similar to the amount of carbon that would be sequestered by planting 57 million tree seedlings and letting them grow for the same period of time.
In 2018 the Egyptian government finally began rolling back the country’s substantial energy and fuel subsidies. This contributed to an increase in fuel prices and, as a result, renewed demand for energy efficiency services in Egypt’s industrial sector.
These policy reforms undoubtedly supported UNIDO’s mission. However, another critical element of the project’s success came down to the team’s ability to bring diverse groups of stakeholders together and to systemically foster a change in mindsets.
“We had to generate an appreciation for the costs of energy and also the opportunities. Not just from a financial perspective, but from a competitiveness perspective, and also with respect to the environment as well. Similarly, depending on who we spoke to, it was important for us to emphasize the social benefits of industrial energy efficiency such as job creation,” added Gihan.
For companies like Sidpec, a petrochemical manufacturer based in Alexandria, the suite of industrial energy efficiency benefits promoted by Gihan and her team were too good to ignore. Under pressure from rising energy costs, in 2013 Sidpec staff worked to implement an energy management system (EnMS). Over a period of three years, UNIDO helped the company to systematically improve its EnMS, starting with low cost measures as a way to convince staff of the potential benefits.
“Our success story started by leveraging the organizational culture towards industrial energy efficiency,” explains Mohamed Ibrahim, the CEO of Sidpec.
“The best results from industrial energy efficiency cannot be achieved if it’s ordered by top management or championed by one or two outliers in the company, the entire staff body must be involved. It requires commitment from everyone,” added Mohamed.
Having achieved annual energy savings of 40,000 MWh, slashing energy costs by over USD $550,000 per annum and reducing over 100,000 tons of carbon emissions, Sidpec became a critical ally for Gihan and her team as they continued on their mission to accelerate industrial energy efficiency throughout Egypt.
An energy efficiency maestro
“Gihan is compassionate which contributes to her unique approach to tackling these challenges,” explains Mohamed Salaheldin, Quality and Energy Efficiency Improvement Manager at Sidpec, who was among the first cohort for UNIDO’s 2-day user training for energy efficiency awareness in 2013.
“We call her a ‘maestro’ because just like an orchestra conductor she is very good at engaging the right stakeholders, assigning them the right roles at just the right time to achieve incredible results.”
“It was an honour for my company to be selected for the peer-to-peer project which Gihan led. We provided training and technical support for energy management systems to six other petrochemical companies. The impacts of this innovative initiative can still be seen today,” added Mohamed.
These sentiments are echoed by Rabab Manee, an energy management specialist who received her ISO 50001 certification under the guidance of Gihan. Today Rabab leads the energy and environmental sustainability efforts for carpet manufacturer Oriental Weavers, where she introduced strategic changes to the production chain and managed to reduce the company’s overall energy consumption by 7 per cent.
“UNIDO’s Industrial Energy Efficiency project is one of the major milestones in my career. Thanks to the ‘maestro’, I was encouraged to proceed in this field,” explains Rabab.
“What I particularly admire about Gihan’s leadership style is that she has the ability to guide others without forcing them into a certain direction or decision. She enables the companies and energy managers to feel empowered to achieve energy efficiency on their own terms,” adds Rabab.
In just five years of managing the programme, Gihan and her team convened in excess of 650 stakeholders and trained a pool of more than 700 energy efficiency consultants capable of servicing the growing demand for energy management services long after the termination of the UNIDO project. Simultaneously, the team worked at the highest levels of the Egyptian government where they succeeded to have a series of policy recommendations adopted in the Ministry of Trade and Industry’s Industrial Innovation Strategy.
According to Gihan, UNIDO’s integrated approach which involved coordinated efforts on the policy front, capacity building and peer-to-peer awareness raising, was critical to fostering the demand and subsequent national market for energy efficiency services and certification.
“My strategy was to always provide the spotlight to the companies or government departments we were working with and allow them to talk directly to their peers about their achievements. This is much more powerful than UNIDO trying to sell the benefits of energy efficiency. People from the same sector, talk the same language. They all know and trust each other,” explains Gihan.
Next steps: From efficiency to solar power
Egypt’s industrial sector has long played a significant role in the national economy and will continue to be a pillar of substantial economic growth in the decades to come. Yet, large energy intensive sectors such as cement, fertilizer, iron and steel making still require assistance to keep their energy consumption in check.
To accelerate industrial energy efficiency and to certify more industrial companies, Gihan’s team recently launched a financing facility designed to improve access to capital, particularly for larger projects which require significant upfront financing. Accessing adequate finance is a major barrier to achieving wide-scale industrial energy efficiency. Traditional financing intuitions remain sceptical of energy efficiency projects and most financial products currently available maintain high interest rates and collateral requirements.
Meanwhile, UNIDO-Egypt will also embark on the next phase of its industrial energy efficiency programme which focuses specifically on motor system optimization. Globally, industrial electric motor systems account for over 70 per cent of manufacturing electricity consumption. Therefore, in large industrial countries like Egypt, accelerating the market penetration of energy efficient motors is a logical next step.
As momentum for industrial energy efficiency continues to grow organically, Gihan is now focused on her next challenge: renewables. Egypt has come a long way in less than 10-years. From political turmoil and mass energy shortages, the country is now forging a path toward the adoption of solar thermal technology in key industries. UNIDO is currently helping to build local capacities to manufacture solar energy systems and components in Egypt, and will also be promoting the application of solar energy in the country’s chemical, food and textile industries over the coming years.
Companies like the Arabian Cement Company (ACC) are early adopters. In an effort to continually reduce ACC’s energy costs and its carbon footprint, the ISO 50001 certified company recently unveiled a USD$5.5 million solar plant, the largest industrial solar facility in the country. In its first year, ACC’s solar plant delivered 4 percent of the company’s electrical demand.
“Moving on from cross cutting solutions like energy management to focus on high impact opportunities to save thermal and electrical energy is a natural transition. It helps Egyptian industry gain control over their energy bills by tackling the major sources of energy consumption,” explains Rana Ghoneim, Chief of Energy Systems and Infrastructure at UNIDO.
“Given the huge opportunity to improve the energy performance of Egyptian industry and the great calibers developed under the programme, I have high hopes for the next phase of UNIDO’s industrial energy work in Egypt. Under the leadership of a passionate force like Gihan Bayoumi anything is possible.”