Electricity Ministry will impose new fees starting July

Mohamed Farag
3 Min Read

The Ministry of Electricity has announced it will add new fees to the monthly consumption bill as part of the energy efficiency service and will start to implement and collect them in July.

Ministry of Electricity sources told Daily News Egypt that the expected revenue from energy efficiency fees in the next fiscal year amounts to EGP 168.9m, which will then increase to EGP 176.5m in FY 2019/2020, then to EGP 184.4m in FY 2020/2021.

Electricity distribution companies are obliged to supply the amounts collected to a bank account at the Central Bank of Egypt (CBE) named the Energy Efficiency Fund. In the event of delay, an interest shall be added equivalent to the annual interest rate declared by the CBE. The fund is subject to supervision by the financial control of the Ministry of Electricity.

According to the sources, the rate of fees for improving energy efficiency is calculated on every kWh of electricity sold to consumers, after the approval of the Egyptian Electrical Utility and Consumer Protection Regulatory Agency (Egypt ERA). An agreement shall be concluded with Egypt ERA to enlist this as part of the tariff calculation to be equal across all consumers and segments.

The sources said that the areas funded through the Energy Efficiency Fund include a high-efficiency lighting programme for “small” consumers of less than 200 kWh per month, a programme to improve energy efficiency in schools and government buildings, the deployment of solar heaters, in addition to training, capacity-building, and contribution to the loan guarantee mechanism.

It also provides financial support for the disposal of low-efficiency appliances through the repurchase of old appliances at promotional prices, and advisory services provided by the General Directorate of Energy Efficiency and Climate Change at the Ministry of Electricity.

Consumers will be the main beneficiaries of energy efficiency activities, both directly and indirectly, with more than 96% of the population of Egypt connected to the electricity grid.

The sources added that the energy efficiency fee addition is justified by the direct and indirect benefit to consumers as well as the principle of equitable distribution of burdens to citizens.

The sources said that a number of European countries followed this principle and added a ratio of 1-4% of the value of the tariff in return for the service to improve energy efficiency.

The sources pointed out that some countries have developed active markets for electricity by giving the so-called white certificates, with each certificate equivalent to 1,000 kWh of rationed energy.

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