May 18, 2022

Lebanon’s Energy Crisis: A Day Without Electricity

The Lebanese energy crisis is not a new issue. The power outage on November 12, 2017 was the first one since 2006 and it left many people wondering what went wrong. However, this event has been years in the making. Lebanon’s electricity sector is riddled with problems including aging infrastructure and an inefficient system of distribution networks that can be hard to maintain due to political instability. These issues have culminated into the current state of affairs where only 40% of households are connected to the grid while others rely on expensive diesel generators for their power needs.

Now is the time to look at what went wrong and how we can fix it. The first step in this process is understanding the system as it stands now and where we want it to be. As such, we have mapped out ten facts that everyone should know about Lebanon’s power sector:

1) Power generation has been incapable of meeting demand for many years

The first thing everyone needs to know about Lebanon’s power sector is that it has always been in the red. Even though there are other data out there, the best numbers about electricity generation come from Entergy’s “Annual Report of Operating Statistics”. This report includes datasets on how many GWh of electricity were generated and how many kWh of electricity were consumed.

Renewables are not included in Entergy’s datasets, but we can estimate their output by looking at the total consumption numbers. As you can see on the following graphic, Lebanon has been generating less power than it needs for decades. The numbers peaked in the mid 80s, but have been in decline since then.

2) The main cause of power outages is not due to low capacity… it’s because demand is so much higher than generation

This brings us to the next fact: when there are outages, they are usually short and generally do not impact large parts of the country. This is because Lebanon’s power sector suffers from peak-hour shortages, which means that peak demand exceeds the capacity of the distribution network. As you can see on the following graphic, daily blackouts are sometimes longer than 30 minutes, but there have also been cases where they were only a few minutes long.

Lebanon’s electricity generation is not capable of meeting peak-hour demand and this has been the case for several decades. However, there are options that can be taken to reduce power shortages such as: (i) investing in distributed generation, (ii) increasing transmission capacity between different regions, and (iii) refurbishing existing distribution infrastructure.

Doing only one of these actions is not enough. Doing all three together is the most efficient option.

3) Power sector losses are around 25% due to theft and non-payment of bills

While it is true that power outages are usually short, this does not mean they don’t have an impact on Lebanon’s economy. Blackouts cost the country around $1 billion a year according to a recent World Bank report.

The blackouts not only impact businesses and Lebanese citizens but also contribute to power sector losses, which are currently hovering at 25% due mainly to theft and non-payment of bills. This is equivalent to 1.2 billion kWh or roughly $290 million in terms of value.

These losses place an added burden on the rest of the population who pay for them through taxes and electricity bills. According to a World Bank report, the total revenue lost is equivalent to 12% of Lebanon’s GDP. This number does not even include revenues from municipalities which could add around another 9% to the total.

4) Intermittent renewable energy sources like solar and wind are only capable of producing up to 7% of current demand

Renewable energy is often seen as an alternative for Lebanon’s growing power needs, but their intermittent nature means they can meet at most around 7% of demand (see graphic). In the near future, this will become even less as demand increases.

In order to bank on renewable energy, Lebanon needs to keep investing in hydroelectricity and waste-to-energy generation over the next few decades until its non-hydro renewables can reach commercial scale. That is roughly when solar and wind generation will become able to meet the country’s needs. These intermittent renewables are not capable of replacing the thermal generation that Lebanon currently relies on for its base load.

5) The latest block auction of solar power was oversubscribed by more than 10 times the available capacity (100 MW out of 900 MW)

This brings us to solar power, which has recently received much attention. As you can see on the following graphic, there are currently over 600 MW of solar projects under construction or about to be built.

These numbers mean that renewables alone will not be enough to solve Lebanon’s power shortages. If all of these projects meet their completion deadlines, they would account for around 30% of peak-hours shortages. The rest of the gap would have to be filled by gas turbines, which are the most expensive generation option currently available in Lebanon.