Lebanon’s energy dilemma: power cuts and costly solar

Reuters/Mohamed Azakir

• ‘Chaotic decentralisation’ as private operators override state authorities
• EDL provides just three to four hours a day
• Households spend 44% of income on energy procurement

In a car park in West Beirut, a fuel tanker pumps 4,000 litres of diesel into barrels that will keep Bassem Jabir’s four illegal energy generators humming for another few days.

Linked to local houses by dozens of thick cables strung across pavements and dangling from street lamps, generators like these have become the primary source of electricity for people struggling through Lebanon’s energy crisis.

The moteur industry, as it is known, is a necessary evil for Lebanese citizens but the private generators have tripled toxic emissions in residential areas over the past four years.

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On June 27 a generator exploded just 2km away from Jabir’s, wrecking six cars and three apartments, but he rejects any criticism of his operation.

“There’s no electricity here,” he says. “The system is trash, so what are you going to do?”.

Jabir set up his business a year ago following the partial collapse of state energy supplier Électricité du Liban (EDL) – which came shortly after the 2019 liquidity crisis became a full-blown economic meltdown.

Reuters/Mohamed Azakir

Efforts to bring power back have been piecemeal as political gridlock and entrenched interests have held back crucial reform in the energy sector.

The central energy authority is incapable of servicing the nation’s electricity needs but is unwilling to loosen its grip on the grid.

While the electricity supplied by EDL has increased since the height of the crisis, it still provides just three to four hours a day.

Over the same period, private generator use has more than doubled.

Between 2017 and 2022 the amount of diesel imported for use in private generators increased from $900 million a year to $1.9 billion.

In 2021 the private sector imported three times as much fuel as state-supervised oil installations.

A private generator subscription does not come cheap. Jabir charges around $100 a month for a basic package and is increasing his prices soon.

Lebanese households spend 44 percent of their monthly income on energy procurement, according to a Human Rights Watch report in March.

Reuters/Mohamed Azakir

Big rise in personal solar, but power is not flowing back to grid

In an effort to save money, many people have turned to photovoltaic panels.

Between 2020 and 2022 the combined capacity of personal solar installations increased by 800 percent and the energy ministry now estimates it at over 1000MW.

This is despite the relatively large investment required — a basic system starts at around $3,000 — and the shortage of financing options.

Government officials say the increase in personal solar power capacity, which is now double their 2030 green transition targets for decentralised solar PV, is one of the few good things to come out of the crisis.

But Christina Abi Haidar, attorney at law firm Abi Haidar and a commission member of the International Union for Conservation of Nature’s World Commission on Environmental Law, sounds a note of caution. “This is not an energy transition,” she says.

While the increase in solar usage takes business away from diesel generators, the lack of regulation limits their potential.

Reuters/Emilie Madi

Abi Haidar

The panels are not connected to the grid, so excess power created during sunny spells is either wasted or stored in batteries at a loss to total energy efficiency.

The upsurge in lithium battery use also threatens a refuse crisis in the near future.

“Soon your batteries will reach their expiry date,” says Abi Haidar. “Where are you going to throw your batteries?”.

A better approach, she argues, is to allow solar panel owners to sell excess energy to the grid and buy it back when needed.

This is one of the features of the Decentralised Renewable Energy law, which Abi Haidar began drafting in 2016 but has yet to be ratified.

The law also breaks EDL’s monopoly by allowing private investors to build up to 10MW of renewable energy capacity to sell to the grid.

While deeper issues within the energy sector require complicated reforms, the decentralisation law “is something that can be done now,” according to energy consultant Carol Ayat.

She thinks that, if it had been ratified before 2020, the increase in solar PV would have been more effective.

“We still believe that the private sector and economy will benefit from this law,” she says.

Yet it is making slow progress through Lebanon’s dysfunctional parliament.

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Abi Haidar says the energy ministry has begun seeking amendments to the law requiring private investors to get ministerial permission to sell energy in a way that she believes contradicts its central purpose.

“The main issue of the electricity sector is political,” she says. “It’s not technical.”

While government bodies fight to retain control of the energy market, the informal sector’s share continues to grow.

“We’re reaching a new kind of reality,” says Marc Ayoub, associate fellow at the Issam Fares Institute of Public Policy at the American University of Beirut.

“Some people, after the crisis, do not need EDL any more.”

In lieu of formal decentralisation, Ayoub says, “what’s happening is a chaotic decentralisation.”