The Truth about the Electricity
Problem in Lebanon
The electricity crisis in Lebanon
originated in 1994, when (then) Prime Minister Rafic Hariri decided to freeze electricity
rates, basing them on $20-a-barrel oil. Years passed, prices of oil increased (currently
over $60/barrel), operational costs increased, old plants’ efficiency
decreased, resources changed, yet electricity rates remained fixed, consequently
creating a progressively accumulating deficit that has been plaguing the
country for more than two decades. In addition, years of unmonitored stealing
combined with (unregulated) subsidies and high cost of private generators
intensified the crisis and debt.
The 2010 Electricity Plan devised
and proposed by (then) Minister Gebran Bassil was reasonable and functional. It
primarily revolved around increasing total power production (as existing
production was not sufficient for Lebanon’s population), modernizing existing
plants, building advanced ones, reducing cost of usage and providing electricity
24/24. Here is a summative elaboration:
1- Establish new and modern plants using Liquified Nitrogen Gas (LNG)
and renewable energy: Launching the 2010-2015 National Energy Efficiency Action
Plan (NEEAP), launching solar energy projects, launching the National Energy
Efficiency and Renewable Energy Action (NEEREA), increasing the share of
hydraulic power production through maintenance, rehabilitating and/or
replacement of existing hydro plants, introducing wind power via the private
sector by building wind farms, and partnering with Mott MacDonald Company that
devised a technical and economic study to provide 1500 Megawatts through the
IPP Modality System.
2- Rehabilitate Zouk and Jiyyeh plants, upgrade Deir Ammar and
Zahrani plants, and add combined cycle to Tyr and Baalbeck plants.
3- Decrease the cost of consumption and fiscal deficit: a) Temporarily
buy electricity from power ships at 12 cents/kWh, a cost less than all other
temporary power providers’ (generators, etc.), b) install meters to monitor
usage, c) ameliorate collection to eliminate illegal connections to the network,
and d) reform subsidies.
4- Gradually increase the tariff in conjunction with improvements
in the electric service provision until reaching the goal of a sustainable
24/24 electric service hence eliminating the need for private generators and
abolishing the financial deficit. Noteworthy is to mention that the tariff will
be much less than the current cost.
Even though the total power
production has significantly increased since 2010, many obstacles hindered the
execution of other parts of the plan:
1- The Ministry of Finance halted the building of Deir Ammar plant
for the past 8 years.
2- The Ministry of Finance failed to pay the power plants to develop/improve
production; for instance, the Zouk and Jiyye plants did not receive financing for
over eight months which stalled production. As a matter of fact, out of 23
requests submitted to the Ministry to finance power plants, only one was
3- Several plants already equipped to operate on gas have been
using fuel and diesel since 1996, which are more costly and polluting; adding a
cost of $700 million/ year for 24 years!
4- Insisting on buying power from Syria for 25% more than the power
5- Many politicians were involved in protecting the interests of
the “generator mafia”.
6- The presence of close to 2 million Syrian refugees exacerbated
the crisis: 500 MW of Electricity are used by refugees, which is equivalent to
5 hours of power a day.
7- Collection problems in areas like the Bekaa, the South, and
North prevailed (at 35%, 49%, and 61% respectively).
The electricity plan faced (and
still does) the usual barriers of exploitation and patronage. Even though it is
logical, thorough, and efficient, it underwent the “expected” political waves
of scrutiny, opposition, and condemnation. The “electricity vampires” are draining
Lebanon’s finances; what must happen now is “slaying” them before the
country runs out of money and time.