Over the last couple of years, Lebanon has become most notorious for its electricity sector. The country has struggled to keep the lights on since the civil war, and has hit its worst milestone with a complete blackout in October 2021. On its own, the state-owned company Electricité du Liban (EDL) has never been capable of satisfying national electricity demand, wreaking the havoc the country now faces. While Lebanon depends directly on fuel imports as a means of energy production, EDL accounts for reported yearly deficits of around $2 billion. The company is also subject to global oil price fluctuations, feeling the impact of the global energy crisis in the third quarter of 2021, as well as government caps on oil purchases, which directly and indirectly impact the national economy. Relying less on oil and gas imports and more on renewable energy (RE) sources, particularly solar energy, will manage to reduce Lebanon’s alarming balance of payments deficit and prevent further blows from market shocks, due to the fact that RE is largely a domestic source of energy.
In March of 2019, the Lebanese parliament ratified the Paris Agreement under law 115. Lebanon committed to covering 30 percent of its energy consumption from renewables by 2030, requiring the installation of 4,700 MW of renewable energy projects, namely solar, wind, and hydro.2 Such projects would reduce the electricity costs by around 50 percent, as well as lower pollution levels, create jobs, support rural development and eco-tourism in remote areas, and spur economic and industrial growth thanks. They would also allow Lebanon to achieve energy security and stability. This idea presents itself today as a solution independent of institutional reforms. This idea stems from Lebanon’s sunny climate which provides around 3,000 hours of sunshine per year, and should be mainly focused on solar energy, which in terms of costs for production is estimated at around $0.04 – $0.05/kWh for utility scale projects; and around $0.07 – $0.08/kWh when storage (batteries) is included. By comparison EDL’s average production cost, comes out to around $0.14 – $0.16/kWH. The demand for solar energy has already increased by factories and companies, with the aim of reducing electricity costs.3
Decentralization and irradiation
Usually when discussing solar power, people often refer to photovoltaic (PV) cells, the black panels that are attached to the roofs of houses or are used in solar farms. This type of solar panel is composed of a layer of N-type silicon and P-type silicon with a conductor linking them; however, efficiency can vary greatly. Traditionally, running conventional power cables from a central source such as EDL towards remote areas is an expensive ordeal, and approximately 30 percent of electricity generated is lost during transport. Solar power; however, can be distributive which means households, schools, hospitals and/or municipalities can install panels and run cables only the short distance to the inside. In rural areas, for example, the cost of solar energy becomes cheaper and more efficient than centralized power sources.4 Solar PV is already an established sector in Lebanon with a decent number of competitive private companies adopting it. The growth potential remains significant. The International Renewable Energy Agency’s (IRENA) Global Atlas for Renewable Energy indicates that annual average solar irradiation in Lebanon ranges between 1,520 kWh/m2/year and 2,148 kWh/m2/year, with most regions being above 1,900 kWh/m2/year. Based on this, IRENA estimates a potential utility scale solar PV of 182 GW.5
In addition to its lower cost and ability to ensure energy security, solar energy has the potential to enable local development and boost innovation in rural areas and across the country. Installing solar and other kinds of renewable energy projects requires well situated land, areas such as in Hermel, Ras Baalback, Tfail, the Chouf, Rachaya, Aqoura, and Taraya. These regions are some of the poorest in the country, and allowing for Power Purchase Agreement (PPA) projects to take place in these regions would help their development, a study conducted by the Lebanese Foundation for Renewable Energy (LFRE) found that approximately 2,700 permanent jobs can be created from RE projects, with two thirds in underdeveloped areas. Moreover, Lebanon’s reliance on highly polluting fossil fuel plants has caused a series of environmental and health problems on the national level. Needless to say, neither the people nor the environment are reaping any benefits from this.
As the country plunges deeper into economic collapse and with the long foreseen energy crisis now here, renewable energy technologies offer the prospect of stable and clean power and heat systems. Solar energy in particular will not only reduce the national budget deficit by decreasing fuel imports, it will also ensure greater stability and energy security, benefiting the country on the economic and social levels. To reap its benefits at this critical period in Lebanon’s history, necessary steps need to be taken in order to support the uptake of renewables.
Solar Energy: A Solution for Lebanon
Levant Institute for Strategic Affairs (LISA)
Lebanon needs to take advantage of the current power crisis to move towards decentralized energy production and reform EDL at the technical and administrative level. Major recommendations mentioned in the LISA policy note to kick-start solar energy uptake include:
• Allocating part of the $1.135 billion in Special Drawing Rights (SDRs) allocated by the IMF towards investment in solar energy projects through dedicated solar energy funds.
• Developing a conducive policy environment that will contribute to capitalizing on the use and benefits of solar energy. To date, no permits for Independent Power Producers (IPPs) have been given by the government to build utility-scale projects and these permits need to be issued ASAP.
• Installing solar panels on the rooftops of school buildings as a means to support the education sector. A study6 conducted by the Lebanese Foundation for Renewable Energy mapped 2,561 educational buildings and found that installing solar PV on their respective rooftops would generate 455 MW of clean energy. The government should use part of the SDRs to build solar PV installations on school rooftops in order to guarantee an education for Lebanese children and evade any future fuel crisis the country might face.
• Utilizing existing micro grids of back-up generators to scale-up solar energy on the short term. Given their extensive network and efficiency when it comes to supply and cost, the existing micro grids hold significant potential in being used for solar energy. If these generators along with their grids were to be bought out and transferred towards the municipality, there is potential for further investment. Currently, municipalities cannot take loans to scale up these investments. Therefore, laws linked to decentralization to allow municipalities to undertake such projects need to be formulated and implemented as soon as possible.
• Paving the way by the government for smart and clean grid solutions through modernizing and stabilizing the grid. Modernizing the grid can provide greater quantities of zero-to-low-carbon electricity reliably and securely, including handling the intermittency of renewables like solar and wind power. In addition, investment in base load power is a pre-requisite to scale up renewable energy and reach our 2030 targets. This can be achieved with gas-fired power plants or storage if financially efficient.
