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Tuesday, 15 February 2022

Gov’t issues tariffs for EV charging

We officially have EV charging tariffs: The Electricity Ministry has set the tariffs motorists will pay to charge EVs in Egypt as the government pushes ahead with plans to accelerate the adoption of zero-emission vehicles on the nation’s roads. Consumers will pay between EGP 1.69-3.75 per kilowatt hour (kWh) to recharge their vehicles, depending on the type and location of the station, according to a decision published in the Official Gazette (pdf) on Thursday.

The breakdown: The rates differ based on whether the charging station is public or at privately-owned commercial establishments, and on whether the stations uses alternative (AC) or direct current (DC):

  • Low voltage (up to 22kW) AC charging stations in no-rent zones (public space designated by the government for providers) will charge EGP 1.69 per kWh: EGP 0.477/kWh in service fees and EGP 1.213/kWh in distribution fees;
  • Low-voltage AC stations in zones where the provider has to rent or lease the land will see consumers pay EGP 1.89/kWh: a EGP 0.677 service fee and a EGP 1.213 distribution fee;
  • DC stations up to 50 kW will charge EGP 3.75/kWh: a EGP 2.537 service fee and a EGP 1.213 distribution fee.

SOUND SMART- What’s with the difference between AC and DC charging stations? Forgive us for using terms you haven’t heard since high school, but here goes: AC, or alternating current, is the stuff that is transmitted through the national grid and comes out of your wall socket. You already use it today to charge your phone / tablet / laptop and to power your home. You can charge a car by plugging in here, but it can be a slower process and needs to be converted into DC power to store in an EV’s batteries.

Why does this matter to me? It’s all about speed. DC chargers allow fast charging — they draw tons of power from the grid and can charge the batteries in an EV without converting the electricity from one form to another. DC charging stations are by definition fast charging stations. They require lots more power to operate and lots more infrastructure to build. In practice, this means people will pay more to quickly charge up their EV at, say, a mall parking lot or a roadside charging station (which are usually more expensive fast charging stations) than they will by plugging into the national grid and allowing the EV to more slowly charge overnight.

In practical terms: A DC “supercharger” can give a Tesla a 320km top-up in just 15 minutes or so. Depending on the type of AC station you’re hooked up to, it takes 10-12 hours (or more) to fully charge a Tesla.

Charging stations on privately-owned and commercial property will pay for the electricity consumed at the same rates the ministry had set for household consumers in 2020, according to the decision. Commercial buyers in the highest consumption tier (more than 1,000 kWh per month) pay a rate of EGP 1.60/kWh for electricity, while households in the highest bracket pay EGP 1.45/KWh.

Until next year: The tariffs came into immediate effect when the decision was published on Thursday and will remain unchanged for a year.

Laying the groundwork for EVs: The government is investing at least EGP 450 mn to roll out the infrastructure required to make EVs viable on Egyptian roads, and is working with Infinity to install 3k charging stations nationwide by 2024. The company has so far established 78 charging stations in major cities including Greater Cairo, Alexandria, Hurghada, Sharm El Sheikh and El Alamein.

A milestone moment: “We are very excited that the tariff is finally announced. We expect that it will be an important milestone in the electrification of transport in Egypt,” Shams Abdel Ghaffar, managing director of Infinity’s EV Division, told Enterprise. “Although from a financial standpoint we don’t see it as lucrative, we believe it’s a good start knowing that an annual revision will take place to ensure it is viability.”

Do tariffs need to improve to attract more players? “If the tariff is not lucrative, not many players will have the appetite to venture into this business,” Abdel Ghaffar said.

The industry at large seems to agree: Eight Arab and international firms have submitted requests to set up electric charging stations around the country, Al Borsa reported, citing unidentified government officials. The sources didn’t name-drop any of the companies involved but we’re aware that the National Automotive Company (Natco) — the local production and distribution partner of Mercedes-Benz — has plans to establish its own stations and produce the equipment. The government will decide on the bids by the end of 1H2022, the people said.

More players entering the market indicates that the sector is gaining traction, Abdel Ghaffar said. In a market as big as Egypt, one or two players are not enough to achieve the needed coverage, he added.

The Egyptian EV market remains small but growth is expected in the coming years: Currently there are only around 1.5k EVs, but this is projected to rise to 40-50k by the middle of the decade.

Plans are afoot to begin assembling EVs in Egypt: State-owned El Nasr Automotive is holding talks with several international automotive companies to begin producing the vehicles locally, which President Abdel Fattah El Sisi said last month could see the first car exit the production line sometime in 2023.

More private sector players entering the EV field: General Motors and Al Mansour are also in the running to jointly produce EVs — the two companies signed an MoU on the plan in December and are working to present a study to the government sometime within the next few months.

Your top climate stories for the week:

  • Alexandria inaugurated a solar energy-powered wholesale market, described by the Trade Ministry as a world first.
  • Smart electric bike company EGIKE plans to establish the country’s first factory for smart eco-friendly bikes, which the company currently manufactures at Military Production Ministry factories.
  • COP president UK is struggling to live by its promises: With the COP presidency still in hand, the UK is struggling to “walk the talk” when it comes to green promises.
  • The government will unveil its green stimulus package before the end of the fiscal year in June. The policy will provide targeted financial incentives to encourage sustainable and carbon emission-reducing projects.

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