A new power plan that aims to solve Lebanon’s electricity shortage for good has gained “immense interest” from three major international companies. A political source that has been briefed on the plan told The Daily Star General Electric, Siemens and Mitsubishi may all throw their hat in the ring when, and if, it is adopted.
“Two new power plants will be built by the companies [that win the contracts] … in [Batroun’s] Selaata and [Nabatieh’s] Zahrani,” the source said.
The Selaata and Zahrani plants would need 18 months to be completed, the source added.
Currently, there are power plants in Kesrouan’s Zouk as well as south Lebanon’s Jiyyeh and Zahrani.
These plants will be shut down if the new plan materializes.
The source noted that a power plant in Deir Ammar is already complete and ready for use, adding that it “is expected to use natural gas imported from Egypt.”
Late last month, Lebanon’s Energy Minister Nada Boustani said Lebanon is considering importing natural gas from Egypt after meeting with Cairo’s envoy to Beirut.
The new contracts would be based on a power purchasing agreement between the companies and the Lebanese government.
The Lebanese government will pay 8 cents per kilowatt-hour to the company that builds the plant.
The government will, in turn, sell electricity at 14 cents to consumers.
Currently, the state pays 16 to 18 cents per kilowatt-hour and sells at 9 cents. This drains the state’s treasury and accounts for almost a third of the annual deficit.
The state-run Electricite du Liban’s yearly deficit ranges between $1.5 billion and $2 billion, depending on the fluctuation of oil prices in the international market.
And while the 14 cents charged to users will be higher than the current 9 cents, this will be one bill as opposed to the two bills a majority of people in Lebanon pay now to the state and generator owners.
As a stopgap, while construction is ongoing, the companies will build substations within six months that will provide a large portion of the required 1 gigawatt.
After the plants are built, more work will be done to upgrade the grid and system.
The grid that distributes electricity from the plants to the end users will have smart meters installed so that the companies will be able to turn off an individual residence or building’s power if a bill is not paid.
The meter will also allow the companies to monitor if electricity is being stolen.
A smart electricity grid can “intelligently integrate the actions of users that are connected, creating so-called ‘prosumers’ who are able to produce electricity as well as consume it” through solar panels for example, according to a European Union fact sheet.
The EU adds that the grid also provides “utilities with secure, two-way flow of data and may form part of a smart grid.”
This will essentially make the responsibility of collecting revenues that of the companies rather than the government.
Around $400 million in soft loans from the World Bank has been earmarked for the smart grid project.
Siemens CEO of Levant & Libya Syed Tahir Nazir told The Daily Star over the phone that his company and the Lebanese authorities are in “regular contact” over a potential project.
The CEO added that the German conglomerate has made several proposals to Lebanon and said that “we are all always interested in being in Lebanon.”
“We are waiting for Lebanon now,” Nazir said.
Although he did not reveal specifics, Nazir noted that his company is capable of carrying out the entire project, including the smart grid network.
“We would like to deliver the entire plan, but it is not for us to decide. We will do whatever the Lebanese government asks us to do in order to provide a sustainable, long-term solution using natural gas and other renewables,” Nazir said.
The Daily Star