| 19 August, 2017

Lebanon's PM eyes 24/7 electricity with gas-powered plants

Lebanon's Prime Minister Saad al-Hariri gestures as he talks at the governmental palace in Beirut, Lebanon August 10, 2017. Picture taken August 10, 2017. Dalati Nohra/Handout via REUTERS

Lebanon's Prime Minister Saad al-Hariri gestures as he talks at the governmental palace in Beirut, Lebanon August 10, 2017. Picture taken August 10, 2017. Dalati Nohra/Handout via REUTERS

19 August 2017

BEIRUT: Prime Minister Saad Hariri said Friday he would endeavor to provide 24 hours electricity to Lebanon through the construction of more power plants that run on gas.

“Yesterday we made a decision in the Cabinet to secure 800 MW within three to six months because 24/7 electricity is our main goal,” he told a large audience at the opening of a transformer station in Bahsas near Tripoli.

The Cabinet Thursday scrapped previous bids to lease power barges to improve electricity supply in the summer and demanded a fresh tender with new conditions, bringing the long-running issue back to square one amid ministers’ rifts over how to handle it.

Last month, the Finance Ministry signed a new contract with the Syrian government to increase the electricity supply by 300 MW.

Hariri explained that the government would pursue three stages for the electricity plan: an emergency stage, an intermediate stage, and a long-term stage.

“We called the emergency stage as such because it is not acceptable today to have a deficit of $1.5 billion to $2 billion per year in electricity when we do not have electricity 24/7,” Hariri said.

Hariri has echoed the repeated remarks of many energy experts who warned that the government cannot keep subsidizing the prices of electricity indefinitely.

“The deficit is due to the fact that Electricite du Liban sells electricity to citizens at less than its cost. The kilowatt costs 15 cents and EDL sells it for 9 cents,” the prime minister said.

He added that the natural solution is to get rid of the deficit.

“This deficit by the way adds every year to the public debt. [The ideal solution] is for the tariff of the kilowatt to become equal to the cost of its production at least! However, this is impossible when the citizen is obliged, in addition to the electricity he buys from EDL, to pay a second bill to the generators, which cost 30 to 35 cents per kilowatt,” Hariri said.

He added that this means the state is losing $2 billion annually while the citizens are losing $1 billion a year.

“The first thing we need to do is to provide electricity. This requires production plants. We inaugurated plants in Zouk and Jiyyeh with a capacity of 300 MW, which helped increase supply three hours a day.

“Within a month, the Cabinet should approve a solution for the Deir Ammar plant, whose contract has been awarded but is facing problems with the contractor. Its production capacity is 500 MW, which will reach the network in three years,” he said.

The plan to boost electricity production at Deir Ammar was put on hold two years after the company upgrading the plant accused the government at that time of failing to pay some of its dues to the firm.

“I reiterate that our purpose is electricity 24/7 as soon as possible. There is also an extra 1,000 MW by the private sector in Selaata and Zahrani to be awarded soon, especially since Parliament approved two days ago the public-private partnership law, which promotes investment in electricity production,” Hariri said.

The prime minister revealed the government asked the International Finance Corporation, part of the World Bank Group, to consult on preparing the request for proposals to operate the plants on natural gas to reduce the cost of production, pollution and environmental damage.

“Our main project for this goal is the use of liquefied gas in line with FSRU [floating storage and regasification unit] technology. All the alternative energies will be used to increase electricity production. The Cabinet will soon grant the production of 200 MW on wind power. We insist also on using solar energy and we prepared a request for proposals,” Hariri said.

He also disclosed that the Energy Ministry and EDL had started installing smart meters to stop waste and improve billing and collection.

“All this is good but if you notice, we are talking about a stage of three years, which means an intermediate stage. While I say that we want 24/7 electricity as soon as possible. The temporary solution, while waiting for all of the new plants to be completed, is to lease energy,” Hariri said.

He added that the long-term plan is a study that will be presented to the Cabinet concerning energy needs from now till 2024.

“Meanwhile, EDL has prepared with Electricite de France a transport master plan that will identify the required investments for 2017-2022,” Hariri said.

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