Full of gas

A lot of talk but lit­tle de­tail on plan to tackle elec­tric­ity

Executive Magazine - - Front Page - By Jeremy Ar­bid

Le­banon will fi­nally be res­cued from the elec­tric­ity cuts it has long suf­fered from, or so says the gov­ern­ment as it trum­pets its lat­est plan for the sec­tor. Eight years ago, Elec­tric­ité du Liban (EDL) sup­plied, on av­er­age, only 18 hours of elec­tric­ity per day, and an am­bi­tious plan from 2010 did not ac­com­plish much in terms of re­duc­ing the coun­try’s short­fall in gen­er­ated elec­tric­ity. It did em­ploy short-term mea­sures, like leas­ing elec­tric­ity barges, re­fur­bish­ing ex­ist­ing power plants, and con­struct­ing small-scale re­new­ables, all of which slightly boosted the elec­tric­ity sup­ply. The lat­est pro­posal looks like it will, again, em­pha­size short-term mea­sures, but the gov­ern­ment has so far avoided de­tail­ing the plan to the pub­lic.

At the end of March, Cab­i­net heard the elec­tric­ity plan. Ac­cord­ing to min­utes from a meet­ing that took place, Le­banon’s Min­is­ter of En­ergy and Wa­ter Ce­sar Abi Khalil pre­sented the plan to the cab­i­net, which agreed to it in prin­ci­ple, per­mit­ting him to pub­licly an­nounce the plan the fol­low­ing week in early April.

But Mel­hem Ri­achy, the Min­is­ter of In­for­ma­tion, told re­porters af­ter the March cab­i­net meet­ing that min­is­ters had made many com­ments on the plan, which would be kept se­cret, and that the plan would be im­ple­mented in a com­pletely trans­par­ent way af­ter it was rat­i­fied.

Ex­ec­u­tive re­quested an in­ter­view with the Min­istry of En­ergy and Wa­ter (MoEW) but did not re­ceive a re­sponse. A source at the min­istry, who did not want to be named, wrote to Ex­ec­u­tive in an email at the be­gin­ning of April that de­tails of the plan could not be dis­cussed be­cause there were sev­eral is­sues yet to be re­solved. The source would not ex­plain what those is­sues were and could not give a time­frame for the fi­nal­iz­ing of the plan’s de­tails.

The plan, in gen­eral, calls for mea­sures to bridge the gap be­tween the sup­ply of elec­tric­ity and con­sump­tion, ac­cord­ing to a draft that a sep­a­rate min­istry source, who also did not want to be named, con­firmed to Ex­ec­u­tive as au­then­tic but out­dated (it was dated March 24, 2017). In the short-term, the plan will call for new gen­er­a­tion ca­pac­ity by leas­ing new barges. Over the long-term, the fo­cus will shift to­ward con­struct­ing new power plants, and a switch from fuel oil to nat­u­ral gas for power gen­er­a­tion.

SHORT-TERM MEA­SURES

Le­banon, by the end of 2016, had a to­tal gen­er­at­ing ca­pac­ity of 1,873 megawatts (MW). The fig­ure in­cludes megawatts from two Turk­ish barges that con­nected to Le­banon’s elec­tric­ity grid in 2013, and from new re­cip­ro­cat­ing gen­er­a­tors in­stalled at the Jiyeh and Zouk power plants in 2016.

Last sum­mer, peak de­mand reached 3,100 MW. The gov­ern­ment wants to in­crease the sup­ply of elec­tric­ity by leas­ing new barges, ac­cord­ing to the draft plan, as a short-term mea­sure to meet this sum­mer’s elec­tric­ity needs.

The plan calls for mea­sures to bridge the gap be­tween the sup­ply of elec­tric­ity and con­sump­tion

In early April, the min­istry did pub­lish a ten­der for two new elec­tric­ity barges that would gen­er­ate be­tween 800 to 1000 MW, but bid­ding was post­poned, ac­cord­ing to a re­port in Al-Akhbar.

LONG-TERM MEA­SURES

New elec­tric­ity barges that the gov­ern­ment might rent are meant as short-term mea­sures that could turn into long-term

The new elec­tric­ity barges that the gov­ern­ment might rent are meant as short-term mea­sures that could turn into long-term. The gov­ern­ment wants to lease those barges to meet Le­banon’s elec­tric­ity de­mands, while it builds new power plants that it hopes to power with nat­u­ral gas or re­new­ables.

Ac­cord­ing to the draft plan, the gov­ern­ment wants to part­ner with the pri­vate sec­tor to build new power plants through a modal­ity known as In­de­pen­dent Power Pro­duc­ers (IPP), where com­pa­nies would own the power plant and sell the gen­er­ated elec­tric­ity to the pub­lic or Le­banon’s util­ity, Elec­tric­ité du Liban.

The gov­ern­ment wants to set up so­lar power in­fras­truc­ture that would gen­er­ate 1,000 MW and is now ready­ing to ten­der 120 MW of so­lar gen­er­ated elec­tric­ity af­ter re­ceiv­ing 265 ex­pres­sions of in­ter­est at the end of March, ac­cord­ing to a list of ap­pli­cants pub­lished on the web­site of the Lebanese Cen­ter for En­ergy Con­ser­va­tion (a gov­ern­ment agency tied to the MoEW). The plan also calls on the pri­vate sec­tor to build a 1000 MW plant at So­lata to be pow­ered by nat­u­ral gas. Elec­tric­ity Law 462, rat­i­fied in 2002, stip­u­lated that a reg­u­la­tor would be the au­thor­ity to li­cense new power plants, but the gov­ern­ment never got around to ap­point­ing that body. Par­lia­ment, in­stead, passed leg­is­la­tion in 2014 and 2015 to get around that road­block by al­low­ing cab­i­net, on the rec­om­men­da­tions of the MoEW and the Min­istry of Fi­nance, to de­cide when the pri­vate sec­tor can build power plants.

The gov­ern­ment is again look­ing to shift from burn­ing fuel oil to gen­er­ate elec­tric­ity at most of Le­banon’s power plants to us­ing nat­u­ral gas (see Walid Nasr Q&A, page 26). The coun­try’s new­est power plants at Deir Am­mar and Zahrani, built in the 1990s, were meant to use gas but were never sup­plied. Gas burns cleaner and would help Le­banon reach its cli­mate change com­mit­ments, and gas im­ports would be cheaper and more pre­dictable than fuel oil. It is also pos­si­ble that Le­banon might find off­shore gas fields as com­pa­nies are now pre­par­ing to bid for ex­plo­ration, with li­cens­ing ex­pected in Novem­ber this year. How­ever, find­ing gas and ex­tract­ing it is a pos­si­bil­ity that is sev­eral years

A lot of talk but lit­tle de­tail on plan to tackle elec­tric­ity stor­age

One of the two Turk­ish barges cur­rently con­nected to Le­banon’s grid

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