After Beirut Blast, Lebanon’s Electric Sector Must End Blackouts, Unplug ‘Generator Mafia’

August 10, 2020

Preliminary results of the investigation into the blast that leveled much of central Beirut last Tuesday show that the tragedy is due to the government corruption and incompetence that has plagued Lebanon since the end of the 15-year civil war that ended in 1990.

Since the end of that bloody war, tangible evidence of Lebanon’s corruption was delivered in the form of electricity shortages and blackouts that lasted from three to eight hours per day. Those blackouts became even longer – as long as 20 hours or more per day in parts of Lebanon — in the months before some 2,750 tons of ammonium nitrate detonated at the port in Beirut and killed more than 150, injured thousands, and left some 300,000 people homeless.

The blast — and the economic crisis that preceded it — has sparked new and widespread protests in Beirut with thousands of people filling Martyrs’ Square and others protesting in Parliament Square, demanding reforms and the disbanding of the government. While it is too early to know what will happen to the war-torn country — and whether reformers are able to win the fight against corruption — it is clear that the future success or failure of Lebanon can be assessed by simply looking at it through the lens of electricity. That is, Lebanon’s success will be gauged on whether or not it can overcome the corruption that plagues its state-owned utility, Electricité du Liban, put an end to the blackouts, and in doing so, finally pull the plug on Lebanon’s notorious “generator mafia.”

At first blush, it may sound simplistic to determine a country’s health or poverty by looking solely at its electric grid, but electricity systems provide a near-perfect reflection of the societies they power. Lebanon’s tattered grid proves that point. Long before the devastating explosion leveled much of the city once known as the Paris of the Middle East, Lebanon was a failed state. As I explain in my new book, and my new documentary, Juice: How Electricity Explains the World, nearly everyone in Lebanon pays two electric bills: one to EdL, and another to the generator mafia, the term used for the people who own and operate neighborhood-based diesel-fired generators and sell power to customers during the country’s daily blackouts.

Over the last few months, those blackouts became even more common as an economic crisis rocked the country and the Lebanese pound lost more than 80% of its value. A shortage of dollars is preventing Lebanese businesses, including the generator mafia, from importing the goods they need from overseas suppliers, including diesel fuel. Lebanon’s electric grid is almost wholly dependent on oil-fired generators, which are more expensive to operate and produce more air pollution than generators that are fueled by natural gas. Lebanon gets nearly 100 percent of its electricity from oil. Globally, less than four percent of electricity production comes from oil.

While in Lebanon, I saw a large example of the country’s dependence on expensive, oil-fired generation at Jiyyeh, on the coast north of Beirut. That’s where a Turkish-owned powership is moored. It burns fuel oil to generate about 200 megawatts of electricity for the Lebanese grid. EdL leases the Turkish powership (and another that’s moored at Jounieh) because it has been unable to build its own power stations.

In Beirut, I interviewed Nader Hajj Shehadeh, the founder and president of Engineers without Borders of Lebanon, and a sustainability advisor to several organizations. During our discussion, he told me that Lebanese residents “can’t live without electricity for 12 hours a day, so we have to rely on private generators.”

In an email on Friday, he told me that “from a country perspective,” the effect of the explosion on the Lebanese grid has been “minor because we were already suffering reoccurring blackouts due to the lack of diesel availability at both utility and generator mafia levels.” He added that most electricity systems in the country were not “affected much by the blast, because the back-up generators [owned by the generator mafia] are decentralized and distributed over the country.”

His assessment was similar to that of Mustafa Baalbaki, a software engineer who I also interviewed in Beirut in 2017. Baalbaki created a free iPhone app called Beirut Electricity that lets users know when the electricity in Beirut will be off. The app even sends an alert to warn users just before the blackouts are expected to start.

Now, in the wake of the explosion, the economic crisis, and the drastic reductions in electricity generation, Baalbaki told me by email, it is “hard for the app to indicate accurate information for the full day.” He added that with the disarray in the government and EdL, “It’s totally unpredictable with so many factors affecting” the production of electricity, “including the crash in the economy and total failure of the corrupt politicians.” Baalbaki added that on some days, Lebanese consumers were getting as little as one or two hours of electricity per day from EdL and that service “was quite random.”

Rampant corruption in the government and EdL is imposing an energy tax on everyone in Lebanon. A 2016 analysis by Elie Bouri and Joseph El Assad, two academics at Holy Spirit University of Kaslik, found that blackouts were costing the Lebanese economy about $3.9 billion per year, or roughly 8.2 percent of the country’s GDP. They also estimated that the generator mafia was collecting more than $2 billion per year in revenue from its customers, money that, in theory, should have been paid to EdL.

The state-owned utility is also producing lots of power for which it never gets paid. By one estimate, some 80 percent of people living in Hezbollah-controlled areas of Lebanon get electric service from EdL, but do not pay for it. Hezbollah, the Shiite Muslim party, is backed by Iran and won’t give up its political and military influence in Lebanon voluntarily. But anger at the group is rising. Some Lebanese leaders are blaming Hezbollah for the explosion at the port.

Could Lebanon consumers switch to renewables and avoid EdL altogether? E24 Solutions, a Beirut-based company, has been installing solar-and-battery electric systems in Lebanon for several years. In 2017, the company’s founder, Antoine Saab, was confident that his company’s technology could fuel a paradigm shift. “Microgrids are the future,” he told me.

The economic crisis and the explosion have changed his outlook. “I do not expect to create further solar micro-grids,” he told me in an email on Monday morning. “It has become impossible to import goods given that the banks have seized the funds in the bank for the entire Lebanese people…So unless Lebanon receives funding from the international community or international private investors, it is impossible to create any new projects.”

Given the long history of sectarianism and corruption in Lebanon, it’s clear that even with thousands of protesters in the streets of Beirut, any reform effort will take time. The Lebanese government is in shambles and mired in debt. Food is in short supply and the monthly inflation rate exceeds 50 percent. Despite the myriad challenges, Saab told me, “I am hopeful for the future as I think we have almost reached the bottom. It is time to create a NEW LEBANON.”

What that new Lebanon will look like and when it might be created cannot be known. But if Lebanon is ever to emerge from the chaos, widespread reform is imperative and the electric sector must be among the top priorities.

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