BEIRUT: The secretary general of the Higher Council for Privatization (HCP) Ziad Hayek said the public and private sector should work closely to secure an additional 600 MW of electricity. Hayek’s remarks came in a report on the current state of electricity in Lebanon and the best solution to solve the chronic problems of this sector, which has literally exhausted the financial resources of all successive governments.
At present, all of the existing power plants in the country, some of which date back more than 40 years, have a combined maximum capacity of 1,500 MW while the country’s actual need is more than 2,300 MW.
Lebanon has been experiencing severe electricity rationing due to the limited capacity of the power plants.
The previous government pledged to privatize the electricity sector as part of efforts to overhaul the sector and reduce the mounting losses.
Among the quick solutions, according to Hayek, is the rehabilitation of the Zouk Mikayel thermal power station.
The HPC chief also talked about medium- to long-term plans for electricity.
Hayek stressed that the government should stick to law 462 pertaining to the reform of the electricity sector.
He added that all of the concerned parties such as Electricite du Liban (EDL), the Council for Development and Reconstruction and the Energy and Water Ministry have taken part in the creation of law 462 law.
However, outgoing Energy and Water Minister Alain Tabourian dismissed all calls for the privatization of electricity as apure waste of time.
The minister submitted a proposal to caretaker Prime Minister Fouad Siniora in order to solve the electricity problems but this scheme was turned down by the premier.
Hayek believes that the electricity sector will continue to be in financial deficit as long as the rates are directly connected to the prices of fuel oil.
Most of the country’s aging power plants run on fuel oil and kerosene, which leaves Lebanon at the mercy of the volatile prices of oil on the international markets.
Hayek proposed a new price ceiling for electricity which takes into account the fluctuation of oil prices in the international markets.
It is worth noting that the Lebanese government subsidizes the rates of electricity fees charged to the consumers.
Experts said that if the government were to lift the subsidies on electricity then the bills for the consumers would soar.
But Hayek stressed that not all Lebanese should pay the differences of the electricity rates, adding that any change in the rates should take into account the small consumers.
The HPC chief added that the private sector should take part in the production and distribution units of EDL.
“The electricity sector today suffers a deficit of nearly 700 MW and this is expected to rise to 1,500 MW in the future. In addition, there is a need to replace some of the aging power plants that have a capacity of 1,000 MW,” Hayek said.
Hayek said one way to reduce the financial losses was to switch to gas or coal to generate power.
He also suggested installing reciprocating engines for a short period of time until the government is capable of investing in new power stations.
Hayek said that in the short term, the government needs to have powerful generators that can produce 300 MW, which will curtail the financial deficit to a great extent.
He also underlined the need to involve the private sector in the management of EDL and to improve the efficiency of the auditing and accounting departments. – The Daily Star