Lebanon Faces Tough Decisions in Energy Sector

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Researched by Industrial Info Resources (Sugar Land, Texas)--Facing high costs and a demand of 2,400 megawatts (MW) with only 1,600 MW of output, Lebanon's energy sector is forced to cope with a damaged economy and daily power outages.

Outages interrupt daily life so often that many Lebanese citizens have invested in their own power generators or standby power equipment to carry them through peak demand periods. Unfortunately, Lebanon lacks natural resources to aid power generation. The country imports about 99% of its energy needs, including about 4.75 million tons of petroleum products per year. Électricité du Liban (EDL) (Beirut, Lebanon), Lebanon's only utility company, spends about $500 million in fuel imports each year. However, the government provides between $200 million and $500 million in funding to prevent the company from going bankrupt. The government has placed itself in a vicious cycle, investing heavily in EDL, although demand still exceeds supply, with little or no improvement in generation facilities or technologies expected.

In June, Lebanon's Electricity Minister Jebran Bassil proposed a new energy plan during a meeting with the Lebanese cabinet. The new plan not only focuses on reducing deficits within EDL to help citizens avoid purchasing their own power-generation equipment, but also proposes the construction of several new power plants. These power plants, which would be built in various parts of the country, would generate at least 4,000 MW and call for at least $5 billion in investments. If no money is secured, however, the power plants will not be built.

This month, Turkey's Energy Minister Taner Yildiz readily agreed to export electricity to Lebanon and mentioned that natural gas exports were a possibility within the next year and a half. Iran also has expressed immediate interest in supporting Lebanon through energy exports and soft loans for power plants.

Despite the new power plan, little innovation is taking place. Renewable energies, such as solar, wind, and hydroelectric power, are present in very small amounts. Lebanon experiences 300 clear days annually. In the Middle East, one square meter of solar panels can produce 2,200 kilowatt-hours of power per year, twice as much other countries with less solar radiation that have implemented solar technologies.

EDL, supported by the United States Trade and Development Agency, is working through a feasibility study to build a concentrated solar power station in the Byblos area, where industrial zones suffer from a severe lack of electricity. The solar power station is estimated to cost about $340 million, and once completed in 2013, it is expected to produce 50 MW of electricity. Lebanese law prevents the direct sale of electricity to the grid, so the project will instead provide electricity to the area's industrial zones, freeing up more electricity for residential and commercial customers. Renewable energies, unfortunately, are more expensive to establish than other forms of power generation, making it far easier to overlook their benefits when faced with less-costly, shorter-term fixes.

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