The Race for Smart Grid
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|Tafline Laylin||July 22nd 2012|
Like Egypt, Israel, and the Palestinian territories, Lebanon has been slammed with energy shortages this summer. In some parts of the country, outside of Beirut, people are often without power for twelve hours a day.
These cuts have inflamed the local populace, sometimes resulting in tire-burning protests that further degrade the environment. But help may be on the way as Lebanon has signed a $360 million agreement to purchase energy from electricity-generating Turkish barges over a three year period.
Demand far exceeds production
The contract with Turkish firm Karkey Karadeniz Elektrik Uretim was finally sealed after two years of political bickering. The first barges are expected to arrive within four months and they will generate 270 megawatts of electricity, according to Energy Minister Gebran Bassil.
Lebanon’s energy demand has soared to 2,400 MW per day, but the state-run Electricite du Liban can barely reach a production of 1,500MW per day. And with annual subsidies of $1.9 billion, energy costs have risen to $0.17 per kilowatt hour. Bassil expects that the new ships will produce energy at a cost of $0.06 per kilowatt hour with total annual savings of up to $130 million for EDL.
Whether or not the Turkish firm will deliver on its promise to relieve Lebanon’s energy cuts for up to two hours a day remains to be seen, however, as the company is currently embroiled in a legal battle with Pakistan. Pakistan National Accountability Bureau is seeking $180 million in damages from KKEU following allegations of corruption and failure to produce the quantity of electricity stipulated in contracts.
KKEU has refused to pay the sum, according to the Daily Star, claiming that Pakistan’s breach of contract was a violation of international law. Bassil said in a statement that Lebanon will enforce steep penalties of up to $500,000 a day if efficiency rates do not meet expectations or if the firm fails to deliver the amount of energy promised.
Meanwhile, KKEU Chairman Ohan Karadeniz has stated that his firm will try to deliver the barges sooner, so that Lebanon can start to alleviate the country’s chronic energy crisis as soon as possible.
Tafline Laylin writes for Green Prophet, from where this article is adapted.