Lebanon plans to bulk up on renewable-energy assets beyond just rooftop solar in a move that could wean reliance on fossil fuels and avoid blackouts, according to a government agency.
“We’re expecting the first big utility-scale solar development to begin in 2017,” said Pierre El Khoury, director of the Lebanese Center for Energy Conservation in Beirut. “We’re also planning to build wind and hydro.”
The Mediterranean country that’s dependent on imported fossil fuels for its power wants to double the share of renewable energy to 12 percent by 2020. It’s also looking to reduce energy demand by 5 percent by boosting efficiency, according to the agency.
“Lebanon suffers from blackouts,” said Hassan Harajli, energy and environment project manager at the United Nations Development Program in Lebanon. “Outside of Beirut, some people have power cuts for nine hours a day. Diesel generators and storage is expensive so there’s a big demand for solar.”
To date, Lebanon’s renewable-energy industry has focused on solar panels for commercial buildings and factories, spawning dozens of local installation companies. The largest systems have capacities ranging from 100 kW to 600 kW, smaller than the utility-scale solar-power plants being built elsewhere the region.
The country’s first megawatt-sized project was commissioned last year in a joint venture between Lebanese developers Phoenix Energy and ASACO GTC. Photovoltaic panels with planned 10-MW capacity will be installed over the Beirut River in the so-called “Solar Snake” project.
A second utility-scale project in Southern Lebanon is being developed by ECOsys, a subsidiary of the ITG group, is expected to come online in the third quarter with a capacity of 1.1 MW, according to manager Elie Maalouf.
“It’s mostly about the economic benefit, saving on electricity,” said Maalouf, who projects his business could grow to 8 MW or 9 MW in 2017 from 1 MW last year. “We’re seeing an exponential increase.”
The central bank of Lebanon has allocated as much as $150 million credit for solar this year through the National Energy Efficiency and Renewable Energy Action program. Working with local commercial banks, it has lent $420 million since 2013, according to LCEC’s El Khoury.
The national energy efficiency loans bear an interest rate of 0.6 percent, with maturities stretching to as many as 14 years. They also include a four-year grace period. The program is supported by the European Union and the French Development Agency.
The European Investment Bank is also working with local Lebanese banks to provide 50 million euros ($56 million) for renewable energy and efficiency projects. It’s in the early stages of assessing direct project finance, according to spokesman Khaled El Nimr.
“Progress has been quick on commercial and industrial rooftops, and activity is picking up in other segments,” said Dario Traum, an analyst at Bloomberg New Energy Finance, which is currently conducting a survey of Lebanon for its Climatescope research project. “Utility-scale is the next step.”
Combined with the plummeting costs for photovoltaic panels, Lebanon’s solar resources, its ready access to capital through remittances and its well-educated population means the country could rapidly ramp-up renewable capacity, he said.
©2016 Bloomberg News
Lead image credit: U.S. Department of the Interior | Flickr