The Lebanese Electricity Woes: An Estimation of the Economical Costs of Power Interruptions

Elie Bouri,Joseph El Assad

doi:10.3390/en9080583

Abstract

This paper contributes to the political and scientific debate surrounding the economic costs entailed by the regular power cuts in Lebanon. Examining the data on electricity consumption that was produced by onshore and offshore power plants, this paper estimates the economical costs of power interruptions in Lebanon over the period 2009–2014. Based on 700 USD/MWh, representing the average value of lost load (VOLL) in that period, results indicate that electricity shortages continue to render significant transfers of wealth to the detriment of economy and society as a whole. Over the period 2009–2014, the total losses for the Lebanese economy reached 23.23 billion USD. Just as importantly, some evidence suggests a sharp decline in the economical costs of power interruptions with the inception of the two floating power plants in 2013. The results are crucial for the decision makers to identify the economic efficiency of alternative measures to enhance the security of the Lebanese electricity supply.

Highlights

Access to a reliable and continuous supply of electricity, as a major element of infrastructure services, is essential to all economic activities (Gurgul and Lach [1])
Using a simplified model in line with Coll-Mayor, Pardob, and Perez-Donsion [3], this paper quantified the costs of power cuts monetarily, even though the estimation of outage costs is often associated with many uncertainties (Zachariadis and Poullikkas [22]); the adopted model can be used to analyze the losses at regional as well as country levels (Coll-Mayor, Pardob, and Perez-Donsion [3])
Our study is a unique work by distinguishing itself from prior studies by depicting, within a simplified model, both the direct and indirect economic costs of power interruptions in the Lebanese context where the official electric generation coexists with the private one

Summary

Introduction

Access to a reliable and continuous supply of electricity, as a major element of infrastructure services, is essential to all economic activities (Gurgul and Lach [1]). Since the end of the civil war in the early 1990s, Lebanon has never enjoyed an acceptable degree of electricity supply security. A closer look at the electricity supply/demand balance indicates that the electricity demand in Lebanon is outstripping the supply, leading to electricity supply shortages, which in turn cause regular power cuts across all parts of the country. As the Syrian war intensified in 2011, Lebanon became more like an energy island; electricity imports were disrupted and a substantial (new) demand for electricity was provoked by the influx of thousands of Syrian refugees to Lebanon, leading to a wider electricity capacity shortage. In an attempt to replace those crucial imports, the Lebanese authorities rented two Turkish power ships in 2013

Methods

Results

Conclusion