Egypt’s New Renewable Energy Authority (Nrea) is currently in negotiations with the two lowest bidders for the 250MW Gulf of Suez independent power project (IPP) in Egypt.

The client is in discussions with groups led by the UK/France’s Engie (previously GDF Suez), and the UK’s Mainstream Renewable Power for the contract to develop the 250MW wind project. The project will be developed on a build-own-operate (BOO) basis.

MEED reported on 22 April that UK/France’s Engie, in partnership with Japan’s Toyota Tsusho Corporation (TTC) and the local Orascom, had submitted the lowest tariff price of $0.041 a kilowatt hour (kWh) for the wind farm IPP.

The second lowest tariff of $0.045 a kWh was submitted by a consortium of the UK’s Mainstream Renewable Power and Actis.

Italy’s Enel submitted the third-lowest tariff price of $0.0494 and a consortium of Saudi Arabia’s Acwa Power and Greece’s Terna submitted the final bid of $0.0499 a kWh.

The tariff prices submitted were lower than many in Egypt’s power sector had expected, with the average levelised cost of electricity (LCOE) for onshore wind ranged between $0.06 a kWh in China and $0.09 a kWh in Africa in 2014, according to the UAE-based International Renewable Energy Agency, making it highly competitive with fossil fuel generation.

The low tariff prices submitted in Egypt were due to a combination of factors, including a site location with high wind capacity and low interest rates.

With Egypt’s New & Renewable Energy Authority (NREA), the ministry is planning more than 1,300MW of wind power in the Gulf of Suez, predominantly on an engineering, procurement and construction (EPC) basis.

This is in addition to the 2,000MW of wind power to be developed under the feed-in tariff scheme. Wind farms will be split between the Gulf of Suez, Zafarana and the Gabal el-Zeit.