Lebanon’s electricity sector has never fully recovered from the civil war which ended 26 years ago. During this time, the national electric company, Electircité du Liban’s (EDL) economic losses have been signficanly high, reaching $USD 2.2 billion in 2012, about 20% of GDP. . As of 2012, EDL was producing 1,500 MW of electricity. Electricity consumption exceeds the total produced by 900 MW, which is 60% more than what is being produced. There are also negative environmental externalities from this sector. Residents of Jiyyeh and Zouq have long complained about the pollution caused by the power plants in the two areas.
Frequent and continuous power cuts have become normalized in Lebanon. As a result, a profitable generator business has emerged, offering electricity to compensate for the shortage. In 2006, the World Bank estimated that about 30% of the electricity consumed is through self generation. This has most likely increased since 2006.
There are many factors that have contributed to the current situation. Instability and political differences have weakened many governments over the past few decades and this has been a major obstacle for all services provided by the public sector, including electricity – despite promises by successive governments of 24/7 service.
Lately, and as the trend is in the rest of world, there has seen a push towards renewable energy. In 2009, the Lebanese government committed to increasing the share of renewable energy in the energy mix to 12%. In the Paris Climate Conference last year, one of Lebanon’s pledges is to supply 15% of its power and heat demand from renewable energy. To help stimulate the growth, the Central Bank plans to launch an 80 million Euro credit line for renewable projects in 2017 and currently provides soft loans catered for the green sector (which includes renewable energy). These incentives have had a massive impact on renewables. Between 2012 and 2015, about $USD 450 million has been invested in renewable energy, energy efficiency, and green buildings. Solar PV projects have increased from 18 in 2011 to 259 in 2015, over a thousand percent increase. The figure is expected to double in 2016.
Adaptation of renewable energy will take time and the government needs to support other forms of renewable energy such as wind. Lebanon has an estimated potential of 215 million Gigawatt hours (GWH) of electricity from hydropower, wind power, and solar power. This would significantly help alleviate the electricity shortage.
There also needs to be an effort to rehabilitate the current electricity infrastructure. Investing and promoting renewable energy is a positive step but it does not address EDL’s position as a major financial burden on the government and nor the environmental impacts of its power plants. This also applies for the unofficial generator industry. Subject to minimal regulations and no oversight, the generators have been a major source of pollution.