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A powerful solution

The debate over upgrading Lebanon’s decrepit electricity sector is pathetic. Politics, of course, far outweigh policy while individuals and businesses continue to pay thousands of dollars every year to fuel the pollutant-spewing generators that keep the lights on. NOW Lebanon offers a solution:

The country needs at least one, but probably two, new power plants. Given that there are likely very large reserves of natural gas off the coast, the plant(s) should probably be able to run on both natural gas and fuel oil, like the newest additions to Lebanon’s power production fleet, the Zahrani and Beddawi plants built in the mid-1990s. (True, it will take around 15 or 20 years for Lebanon to exploit gas reserves, but the government can negotiate to receive more gas from Cairo and/or seek other sources to try buying at the lowest price in the meantime.) Natural gas is cheaper and cleaner than the fuel oil that currently propels the power sector.

But power plants are not a panacea. Infrastructure is a disaster (there is only one transmission line connecting Zahrani, just south of Saida, to Beirut, for example). Lebanon needs to invest in increasing its transmission and distribution capabilities. It also needs to take better care of the equipment it has and implement best practices in running (and staffing) the new plant(s).

A power plant cannot be run at full capacity without stopping for months on end. However, that is common practice in the sector. Machines need tune-ups and down time so they run efficiently and last longer. According to Executive magazine, Lebanon’s installed capacity for producing electricity is 2,100 megawatts (which is actually the same as average demand in 2010 during non-summer months – demand peaked at around 2,400 megawatts). Because of poor maintenance, Lebanon only generated around 1,500 megawatts that year.

A large part of the problem is an Electricité du Liban staff bloated with political hires who do little work (yet, ironically, EdL is also widely understaffed with a geriatric workforce). That said, the fact that shutting down machines for maintenance means more power cuts also acts as a disincentive to take them off line.

The plan that is being “discussed” in parliament and cabinet (which was approved by Saad Hariri’s government in 2010 and budgeted for that same year) seems perfectly reasonable. It envisions spending $1.2 billion in state money (with extra investment coming from the private sector, international donors and loans) over the next four years to do the following: rent large generators to immediately add capacity – allowing for maintenance work on existing facilities and perhaps providing a little extra juice for consumers, depending on how many generators are rented; upgrade infrastructure; and finance the building of a new gas/fuel oil plant.

Politicians are talking about building only one plant, though the plan is open to the idea of two. One would add 700 megawatts of capacity, meaning that based on 2010 figures, Lebanon would still produce around 300 megawatts shy of demand in the summer months. Furthermore, “demand for electricity between 2008 and 2009 grew by 7 percent, up from 6 percent growth the previous year,” Executive reported. Two plants might be the better option.

The supposed debate over the plan in the upper echelons of leadership goes like this: The March 14-Najbi Mikati-Walid Jumblatt-Michel Sleiman group is uncomfortable with the idea that Energy Minister Gebran Bassil will be in charge of arranging the contracts for all of this spending via the Energy Ministry. Hezbollah and Amal have been pretty quiet on the matter but back Michel Aoun when votes are cast. People close to Bassil insist the tenders have been prepared up to international standards and that public money spent would be subject to the same review process as all federal spending.

The politicians against the proposal want to create a regulatory body to oversee tendering, an entity that should have come into existence in 2002, though the law that created it then has never been implemented. This regulatory body smells too much like an extra layer of bureaucracy. The real fear seems to be that by letting Bassil go through with his plan, companies close to him and Aoun will win tenders and get rich off state funds (though providing a needed service, to be fair), with a worst-case scenario involving kickbacks. Aoun will apparently quit the government if the regulator is born.

Here’s our proposed solution: Tendering should be public, and the draft tenders the ministry has already written should be used provided they are up to standard. Any company in the world can bid, in secret, then the bids should be opened in a session of parliament aired live on TV. The lowest price wins, and the cabinet should issue a specific decree allocating the money on condition that if costs should rise through the course of the project (as happens the world over), extra spending will require a new decree from the government. The country could have 24 hours of power in three to four years if the sector is overhauled.   

Lebanon needs to solve its power problem. It’s about time to catch up with the 20th century.

  • claudine

    I doubt our esteemed politicians will EVER care about the infrastructure or the social plights in this godforsaken country. I went FIVE times to file complaints about the water and, since the electricity service is right next door, I always drop by to ask about the posts we need in order to fix our electricity (we hardly get 180 watts) and guess what they final reply was? We don't have a budget for that. That's one small, minuscule project and they can't finance it. So I doubt they'll try and fix anything else. As for the water, in my fifth complaint --they must have gotten annoyed by my disrupting their sob7iyat-- they said they have nothing to do with it, that it's the (useless) municipality's problem and that we should only go to pay there!!

    September 1, 2011

  • Sami

    The goverment is not able today to collect the money for the electricity it produces. Most electricity produced is stolen creating faked demand. In other words people who steal electricity are using more than their normal need because they are getting it for free. There should not be one dollar spent on producing more electricity until the goverment can prove it can stop the stealing of electricity and until it collects the value of the electricity it produces today. A public sector that is not even capable of keeping toilets at its offices clean, this sector is certainly not capable of running an electricity company. There is a very simple solution in my opinion that might work to fix the electricity problem: EVERY PUBLIC OFFICIAL SHOULD BE FORBIDEN FROM HAVING A GENERATOR AT HIS HOUSE. Try it for few months and I guarantee you that we will have 24/24 electricity in this country.

    August 29, 2011

  • Youssef

    How about getting rid of the Zouk power plant alltogether, and changing the land zoning to touristic in order to build a mega beach resort instead? Not only will this solve the air and water pollution problems that this plant is causing to the Jounieh population, but also the money made out of selling or exploiting this unique seaside location would largely finance the construction of a new modern powerplant, far more efficient than this 25 year old one, in a location where the price of land is far less expensive, maybe close to the Syrian border which would also save the huge costs of building a land pipeline to get the gas all the way to Zouk. Just dreaming aloud... Eid mubarak to all our muslim brothers.

    August 29, 2011

  • Someone

    As usual it is March 8 that blocks for the welfare of this country (especially Tayyar), ...they do nothing but block in pursuit of the personal interests of Aoun and his immediate family! ONE WAY TICKET!

    August 29, 2011