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Lebanon Energy: Ready for a Prosumer System?

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By Diana Ramadan, Craig Brown

· 6 min read

One year after the August 4th explosion in 2020, Lebanon continues to struggle with spiralling economic, monetary, and social crises. The growing budgetary deficit has led the Lebanese pound to lose 90 percent of its value since 2019 – at a time when global inflation continues to climb. The country’s already precarious energy system is at the brink of failure as the cost of importing fuels to meet domestic energy needs is quickly becoming out of reach.

The country today is in a dire situation: hours of queues at car petrol stations, food shortages and expiration due to lack of refrigeration, and frequent power outages at the height of summer heat. Lebanon’s electricity generation system is heavily reliant on imported fuel oils, which the country can no longer afford. As recently as July 2021, Lebanese officials had to sign a deal with Iraq to broker fuel sales in exchange for Lebanese goods and services [1]. A patchwork system of backup power generators is also running short on diesel fuel – leaving many of the country’s homes and hospitals critically vulnerable.

Lebanon has notoriously dealt with a lack of 24-hour electricity since the end of the civil war in the 1990s [2]. Électricité du Liban (EDL), the dominant state-run electric company, has not been able to supply 24-hour electricity for three decades. Electricity consumers have adapted to the regular blackouts and power outages by paying private, unregulated diesel generators to supplement the lack of power. Since most Lebanese live in units within multi-story buildings, residents usually have a private generator for their own building. In some cases, there are private generators which produce power for one city block or entire neighbourhoods.

This patchwork system of unregulated diesel generators has become so prominent that it now forms a vital, informal electricity generation source to the country. According to a 2018 World Bank Group study, private diesel generators supplement approximately 37% of unmet electricity demand in the country [3]. And with central power outages reaching up to a staggering 20 hours per day in 2020 [4], the demand for private electricity generation has increased.

However, since private generators are haphazardly distributed in almost every neighbourhood, it continues to be difficult for the state to impose regulatory measures or controls on their operation. Previous attempts by the government in 2018 to monitor and control the system by mandating the installation of electricity (sub)meters were met by protests and failed. 

Private generators – providing an opportunity for a sustainable prosumer system?

Because power generators are installed individually per building and each have an individual owner/manager, they could form the basis as a type of prosumer (producer-consumer) system. However, “prosumer” typically favours a system that derives power from a distributed, renewable energy source. Indeed, there are few supporting factors for the use of diesel generators as a prosumer system. Principally, they are highly potent in air pollutants, contaminants, and carcinogens. Diesel exhaust contains more than 40 toxic air contaminants and contributes to numerous health and environmental risks [5]. In areas where generators are particularly dense, diesel generators also impose significant noise pollution. Most arduously, though, the generators rely on expensive diesel that consistently falls short in supply.

Nonetheless, the ongoing electricity supply crisis in Lebanon – coupled with the country’s currency crisis and fuel import requirements for power generators – raises the opportunity to re-visit renewable prosumer systems in the country. There are several advantages already in place: aside from consumer familiarity with building-specific system and the health benefits of solar PV alternative, Lebanon records 300 sunny days per year and has strong solar irradiance levels. The city of Beirut also offers good rooftop availability, with the average rooftop area estimated at 185 m2, offering average capacity of 12-17 kWp (solar kilowatt peak) [6]. Cities and towns outside of Beirut offer even more rooftop potential.

Over the past decade, the government has received the support of various development bank programs and implemented a handful of distributed or small-scale solar PV programs. Most of these projects were for specific micro-applications, such as solar PV streetlights and solar water heater technology. However, the government has also tried to introduce new incentives, including a net-metering scheme, to encourage residential prosumers. Sadly, these programs have suffered from a lack of effective regulatory and legal frameworks, as well as overly cumbersome bureaucracy, which eroded confidence and participation in the programs [7]. The International Renewable Energy Agency (IRENA) summarised in a 2020 Renewables Readiness Assessment report, that “there is a lack of streamlined procedures and awareness amongst local authorities and the general public about (small-scale) project implementation” [8].

There is also the issue of the entrenched system of private generators – sometimes referred to as the “generator mafia”. Private generator operators control much of the energy sector, and to introduce a new alternative would be met with protest, or even violence. Lebanese energy experts have come up with workarounds for this hurdle by suggesting the inclusion of generator managers in the implementation of the green energy economy. Ali Ahmad, an energy policy specialist at the Issam Fares Institute at the American University of Beirut, suggests that employing the generator owners into the planning process and eventually giving them a level of ownership in the prosumer system will help avoid pushback [9].

A more deep-seeded hurdle facing the implementation of a sustainable prosumer system is the systemic political and institutional corruption in Lebanon [10]. When considering government reluctance in the development of the renewable energy sector, it is difficult to understate the overreaching effects of corruption. In a story for Asharq Al-Awsat, former Energy Minister Mohammed Abdul Hamid Baydoun raised concerns about the level of political bribery within the energy sector [11].

The World Bank and IMF have also made clear denunciations of corruption found within EDL, pointing again at the systemic rot that has infiltrated all aspects of Lebanese governmental workings [12]. Financial aid from the World Bank and IMF has kept EDL afloat over the decades, with little progress in return. These large international institutions have demanded that reform be made, and anti-corruption practices be implemented in EDL and the energy sector. However, increasing blackout hours and recurring protests outside the EDL headquarters have proven that no such efforts are being seriously fulfilled [13].

As Lebanon continues to descend further into darkness due to fuel shortages and currency crises, the conversation around a sustainable prosumer system is gaining traction. This system is suitable for the Lebanese consumer, and it can help democratise power while combatting corruption. But the implementation will require a transformation of the current political and legislative systems into adopting a technocratic approach to governing.

A glimmer of hope recently arose from the July 2021 engineers’ syndicate election, where independent subject-matter experts triumphed in a sweeping victory over candidates from the traditional class of political elite [14]. There is an opportunity to apply such results on a large-scale during the upcoming general election of May 2022. Should the scale tip in favour of independent technocracy, regulatory bodies can comfortably begin research into the reshaping of the current producer-consumer system. For Lebanon, trading diesel generators for rooftop solar PVs, incorporating private generator operators into the green energy economy, and forming legislation to regulate and invest in this system could soon be on the horizon.

Diana conducted her thesis research at the Oxford Institute for Energy Studies on the topic of consumer electricity in Lebanon, which was guided by Dr. Rahmat Poudineh.

Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.

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