Electricty plans for Lebanon

Why is electricity such a problem in Lebanon?

Last night Dr. Raymond Ghajar explained the problems, and the proposed plan to solve them, to assembled members of the British Lebanese Business Group at its monthly meeting. Britain has significant skills in the area of power supply and thus British companies are expected to be bidding for some of the projects that the plan will create.

Clearly this is a man steeped in his subject, he spoke with neither notes nor visual aids yet quoted numbers, dates and people with the same ease he answered a string of questions later. Not difficult to see why he is both a successful university lecturer (teaching practical economics to engineers) as well as being chief advisor to the minister of Energy & Water.

The issues are apparently threefold, technical, financial and legal/political.

The technical issues span the three arms of electricity supply; they are generation which needs power stations and fuel, transmission which needs an efficient grid and, finally, distribution which is about local supply from substations to consumers together with billing and collection.

Perhaps one example from the generation area will suffice. Gas is the fuel that gets used most efficiently by modern thermal power stations. There is a gas pipeline running between Egypt, Jordan, Syria and Lebanon. Not one of those four countries has its own on-stream gas reserves. Qatar has offered gas in the past, but there is no way to pipe the stuff over the Arabian Peninsula. Lebanon’s supposed gas power stations are therefore running on cheap, but much less efficient heavy fuel oil or HFO. The solution to this is to import liquid natural gas (LNG) by sea, but there is no LNG storage capability. Solution, convert an old oil tanker to store the gas. So that is what is in the plan as well as building additional generating capacity.

Meanwhile, there is a flourishing grey market in power generation (we buy extra from our local bakery, at over 35 cents a unit) where people buy the stuff at up to 10 times EDL’s loss-making price (just under 10 cents a unit on average).

We have heard plans before, three things give me hope that this plan will work. The first is that there are actions and a ministry agreed budget for this year. The second is that the finance is needed in easy stages, with a capability of some coming from the private sector. Finally it is a short term plan, not one finishing in 20 years. But there are hurdles to overcome too, not least that not even the Minister of Energy has the authority to agree the building of a new power station, each one needs a new law to be passed by parliament. So will there be the political will to agree on such a law?

If not, we’ll still be asking the same question next year and the one after that and the one after that, ad nauseum.