Advancing Lebanon’s Energy Sector, Learning from the UAE

Tuesday, August 13, 2019
Somaieya Khurram

The Lebanese are exhausted from the lack of follow-through on government commitments to rebuild the country’s power sector. The mistrust continues to deepen as short term solutions, such as the off-shore generator platforms, have not appreciably improved the situation as blackouts still exist.

Nada Boustany, Lebanon’s Minister of Energy and Water, has launched a campaign to remove illegal links on the defective electricity grid across the Lebanese territory. Doing this should reduce theft and losses on the network and do more to distribute power equally. This campaign is delivering reliable results, but unfortunately, it is not enough. Furthermore, the cost of consumer power hadn’t changed since 1996 when, at that time, a barrel of oil was around $23. Now it costs around $70 per barrel.

Additionally, the central power plants cannot reach the peak demand of 3,400 Megawatts (MW). The average capacity for these plants is just over 2,000 MW. Due to the shortage of supply, it involves daily blackouts for three hours in Beirut, and elsewhere it can be much of the day. While Lebanon does use privately financed gas-fuel sources, there is the dilemma that there is no regulator that can resolve disputes between government and power producers.

Many people wonder why fixing this difficulty is such a hassle. The Lebanese civil war damaged the economy, which now is on the brink of a financial collapse. Any new plans that the government suggests will not succeed unless it attracts foreign investments. It is obvious that Lebanon can improve by advancing its energy sector and create electricity reforms. There are lessons to be learned from countries that utilize their energy sectors to boost their economies. The United Arab Emirates (UAE) is a perfect example. The UAE is ambitious when it comes to increasing renewable energy. It is moving away from oil and building a hub for clean energy technology.

The UAE funds renewable energy projects around the world and invests millions of dollars on research. They are sharing their research with other countries. Its strategy makes UAE a model for the renewable energy sector. In more than 25 countries, Masdar Abu Dhabi invested more than $2.7 billion in clean energy development. By doing this, it earns them a spot of being a regional leader and an international player in renewable energy and sustainable urban development.

The relation between UAE and Lebanon is calm. Lebanese Economy and Trade Minister Mansour Bteish encouraged the UAE to invest in different sectors in Lebanon. Bteish stated, “UAE’s investment in productive sectors will contribute to creating job opportunities in the country while increasing exports from Lebanon.” Thanks to many shared interests and the many contributions that Lebanese expatriates have made in the UAE, it is safe to say that they are “brotherly countries.” Might the Lebanese government approach the UAE to invest in Lebanon’s energy sector, mainly on solar photovoltaic (PV) and bioenergy?

A report written by the United Nations Development Program outlined the potential boom in Lebanon’s energy sector. It concentrates on PV, wind energy, and bioenergy.

PV is an established sector in Lebanon that includes several competitive private companies. The sector still has high potential growth. The government needs to upscale its power capacity and be ready to contribute towards the decentralization of the power supply. This investment can create 14,000-18,000 jobs.

Wind energy is a strange idea to Lebanon due to the unfamiliarity with the installations and operations of wind farms. Recently the government signed a power purchase agreement with two developers for the first installation of a wind farm that will produce 200+ MW in the northern mountain district of Akkar. Now, there is a bidding process to ensure that the added capacity is between 200 and 400MW. Through an optimistic lens, this can produce almost 3,000 jobs that in the service and construction sectors.

The Lebanese government has not focused in detail on the concept of bioenergy, which allows potential synergies with other sectors such as water treatment, agriculture, and waste management. There is currently a waste crisis where one of the landfills in Beirut is reaching its capacity of waste and is challenging nearby residents’ well-being. This has raised the government’s attention on biomass. By utilizing that landfill, the waste can be converted to energy and boost its sector. This report states that the quantity is low for creating jobs (around a few dozen), but in reality, it can be a strategic advantage due to multi-potential synergies with other sectors.

Can Lebanon move ahead aggressively with renewable energy options? Absolutely. It only requires an energy design similar to what is already happening in the UAE.