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Abu Dhabi, UAEMonday 20 August 2018

Lebanon's power struggle looms between government and ‘generator mafia’

Yet the state remains unable to provide 24-hour power

Electric wires connected to a generator which runs when the national power grid is down in one of Tripoli's heavily populated neighbourhoods, north Lebanon, 30 July 2018 EPA
Electric wires connected to a generator which runs when the national power grid is down in one of Tripoli's heavily populated neighbourhoods, north Lebanon, 30 July 2018 EPA

For decades, Lebanon’s private generator owners have charged customers extortionate prices to fill a gap in electricity supply from the state, profiting from the country’s crumbling infrastructure.

The illicit industry is thought to be worth more than $1 billion, giving those involved enormous influence that some say has been used to stymie reform.

But after years of operating unhindered, the Lebanese government appears to be taking action against the so-called “generator mafia,” introducing rules that require meters to be installed to measure their use.

Raed Khoury, caretaker economy minister, said on Tuesday that the move is aimed at preventing fraud and will ensure consumers are only charged for what they use.

“We are not running in a confrontation with anyone, our main goal is to implement the law,” he said, adding that the owners would pay the cost of installing the meters.

But generator owners have threatened to turn off the power if the regulations are put in place.

“Apparently all the problems are solved in the country and they now have time to deal with us,” said a statement from a representative of owners earlier this week.

“Without the generators, you will see darkness,” the statement added.

Power outages have plagued Lebanon since the 1975-1990 civil war. Today, the low rumbling of diesel-powered generators is an all-too-familiar sound across the country. Tangled wires strung haphazardly from house-to-house are a daily reminder of the dysfunction.

A lack of investment in energy infrastructure over the years has made it impossible for Lebanon to meet its power demands. The country was ranked 125th out of 127 countries in the World Economic Forum’s Energy Architecture Performance Index (EAPI) released last year, and a worsening economy makes it unlikely that much-needed investment will arrive any time soon.

The arrival of more than 1 million Syrians since the outbreak of civil war there in 2011 has put even more strain on the power grid.

Electricity du Liban (EDL), the national utility company, currently generates around 1,700 megawatts of energy, far short of the actual consumption of over 3,300 megawatts. That means that the government must ration its supply. In the capital Beirut, scheduled power cuts last three hours a day. Outside the city, the outages can last for up to 12 hours.

During the summer months, power outages become more common as consumption rises dramatically with the use of air conditioners. EDL warned recently that rising oil prices might force it to ration supply even further.

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Lebanon's years-long power problem:

Lebanese swelter in summer as long-term power cuts continue

Lebanon short of electricity

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With EDL unable to provide 24-hour power, officials are reluctant to increase the price of household bills — set years ago and never increased to reflect the cost of electricity generation today. As such, the government continues to cover EDL’s over $2 billion annual deficit that represents around 15 per cent of the state’s total yearly spend — compared with seven per cent on healthcare or nine per cent on education.

Meanwhile, generator bills can run up to $150 a month on top of what a household pays for regular electricity. But owners argue that they are performing an essential function in lieu of a proper government service.

“It doesn't make any sense,” said generator business owner who has around 700 customers, and who declined to give his name. “In Beirut, it won't work because there are several generators for each building and each area — they are all mixed up together.

“Going around to take the reading every month is a lot of work. The government should just provide electricity for people,” he added.

But residents seemed to welcome the move if it would mean saving money.

“We can’t live without the generator,” said Christina Karam, a resident of Beirut. “But it’s better to have a meter so we pay only what we use.”

Some local authorities have had success in outmanoeuvring generator owners. The town of Zahle, in eastern Lebanon, currently provides 24/7 electricity for its 250,000 residents. But it didn’t get there without a fight. Generator owners burned tires and blocked roads in protest at the plans. Officials at the local electricity provider, Electricite de Zahle, received death threats for the move, and shots were fired at one of its transformers.

The southern village of Qabrikha was able to generate round the clock electricity thanks to an EU-funded solar farm. Lebanon plans to generate 12 per cent of its electricity with renewable sources by 2020.

The power struggle between generator owners and the government is the latest in a series of incidents to shine a light on Lebanon’s energy woes.

Since 2013, it has relied on two floating power stations from Turkey to narrow the deficit in supply. The boats were supposed to be a temporary measure while new power plants were built, but the plans never materialised.

A third arrived last month and was supposed to dock off the coast of Jiyyeh in the south, but locals blocked the giant barge from mooring and released a statement that called on authorities “to distance the death [machine] from our families and children.”

That sent the barge on a meandering journey back up the coast, to Zouk Mikhael, where it can only produce a portion of its potential output.

The power barge saga came hot on the heels of an embarrassing week for EDL, after it was discovered that a member of staff had been maintaining a chicken coop in the basement of the company’s headquarters in Beirut.

The coop, which was discovered during an inspection of the building, was fitted with lights for an incubator and received 24 hours of electricity a day.

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