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.