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Lebanese minister stresses need to upgrade power plants

19 February 2009

BEIRUT: Energy and Water Minister Alan Tabourian said Wednesday Lebanon urgently needed to replace the archaic power stations with more energy-efficient plants that run on coal. "I have submitted a short- and medium-term plan to the Cabinet to solve the electricity problem. I am still waiting for the cabinet's response to this plan," he told The Daily Star.

The electricity sector has become a chronic problem for all successive governments since 1992, despite massive investments to overhaul the existing plants and build two gas-fired stations in Tripoli and Sidon.

Most of the power stations are still run on fuel oil and gasoil, leaving Lebanon at the mercy of a volatile energy market.

The high prices of oil up to June of 2008 compelled the government to raise subsidies to finance the purchase of fuel oil, which represents around 80 percent of the entire energy bill in Lebanon.

Apart from Beirut, most parts of the country have been experiencing a sharp power rationing that ranges between eight to 12 hours day.

"There was no real investment in the sector. But there was lot of money spent on subsidizing the prices of electricity to the consumer," the minister said.

He refused to blame Electricite du Liban (EDL) for the problems, saying: " EDL was not given the tools to run an efficient operation. EDL can't do anything if most of the power plants run on [expensive] gasoil."

Tabourian stressed that EDL is not bleeding the Treasury, contrary to the general belief in the country.

"As a matter of fact, EDL is costing the treasury LL300 billion which covers the salaries and maintenance of the power stations. The rest of the money goes to cover the cost of gasoil and fuel oil.

The electricity subsidies are the third source of government spending after the cost of debt servicing and salaries of public employees and army and security personnel.

According to Tabourian's plan, Lebanon needs to introduce powerful and easily installed generators that have a capacity of 1,000 MW.

"This is a short-term plan for the next two years. The purpose of this plan is to increase electricity production from the current 1,500 MW to 2,500 MW. This will be sufficient to meet the needs of all areas around the clock," Tabourian said.

He added that this short term plan could cost between $1 billion to $1.6 billion, depending on the number of powerful generators that are installed.

The minister believes the successive government did not make sound investments in the electricity sector and "the citizens are paying the price."

He favors switching the electricity plants to coal, which is half the price of fuel oil and 25 percent cheaper then gas.

He admitted that switching to coal will cost around $3 billion and may take about five years to implement.

"If we go for this choice then we have to build a special harbor to receive the coal and a very powerful plant," he said.

The minister has been holding talks with a number of funds to explore the chance of financing the construction of coal-run power stations

"This is not my job to find financers for the projects. I am diagnosing the solution and the rest is for the government."

He disclosed that Lebanon is still hoping to receive gas from Egypt this year, but said Cairo expressed readiness to supply only half the amount of gas Lebanon has requested.

© Copyright The Daily Star 2009.