Lebanon has the potential to generate up to 30 per cent of its electricity from renewable sources by 2030, according to a new report published by the International Renewable Energy Agency (IRENA).
The Renewable Energy Outlook: Lebanon report suggests that scaling-up renewable energy adoption can help the country meet growing energy demand, support economic growth, create annual savings of up to USD 249 million and strengthen the country’s response to the COVID-19 pandemic.
IRENA Director-General Francesco La Camera outlined in the report, while the pandemic has brought hardship and grief, the need to respond quickly and effectively has underlined the value of close, transparent coordination. “Beyond short-term recovery measures, the country and its people need to focus their efforts together on longer-term improvements, including ensuring energy security and building a resilient economy,” he said.
As the country moves forward, renewable energy technologies offer the prospect of stable, clean power and heat systems. While energy and electricity demand have weighed heavily on Lebanon’s economy, and fuel imports account for close to a quarter of the national budget deficit, renewable energy technologies offer the prospect of clean, domestically sourced power and heat systems. In recognition of the economic opportunity of renewables. Lebanon has adopted an ambitious target to cover 30% of its energy consumption from renewables by 2030.
“Scaling-up renewable energy adoption can help the country meet growing energy demand, improve its energy security and support economic growth”, he added.
The successful acceleration of renewable energy deployment requires significant adjustments to the regulatory framework governing Lebanon’s energy sector, with several current conflicting laws, presenting a barrier to private sector investment. IRENA suggests integrating energy-related laws under an overarching amended law, overruling any current discrepancies or overlaps.Power Purchase Agreements (PPAs) that allow developers to sell electricity directly to specific consumers could in turn open the way for peer-to-peer contracts. Taking advantage of advancements in the areas of peer-to-peer trading and blockchain can promote implementation of community-scale renewable energy systems. Reinstating incentives for the installation of solar water heaters and small-scale applications would also support uptake.
In 2018, Lebanon updated its renewable energy target to 30 percent of consumption (power and heat) by 2030. However, a lack of clarity over the technology mix remains a hindrance.
IRENA suggests complementing the target by defining the individual target capacities for each technology. Specifically, 1 000 MW of wind; 601 MW of hydro; 2 500 MW of centralised solar PV; 500 MW of decentralised solar PV; and 13 MW of biogas.
Setting subsidies for heat pumps to increase competitiveness and complement current solar water heater incentives may support the introduction of the tools required to improve the uptake of renewables in the heating and cooling sector. Furthermore, establishing a databank on application and current market status with tailored support programs can incentivise investments.
Electricity in Lebanon is highly subsidised. Therefore IRENA suggests increasing tariffs and reducing electricity subsidies may encourage public and private investments in renewable energy projects and allow for the proliferation of renewables through small- and medium-scale deployment.
Lebanon’s grid is subject to major technical and non-technical losses, amounting to 21% in 2018. Therefore, renewable energy projects – particularly large-scale projects – face significant difficulties. IRENA’s analysis finds that Lebanon’s 30% target can be reached if the stability of the system is preserved.
While several incentives such as NEEREA, the Lebanon Energy Efficiency and Renewable Energy Finance Facility (LEEREFF) and the Green Economy Financing Facility (GEFF), administrative processes can be streamlined for both large-scale and small-scale applications. Additionally, the development of suitable risk mitigation schemes specific to renewable energy projects by international financial institutions will offer security to investors.
The report was prepared in collaboration with the Ministry of Energy and Water and the Lebanese Center for Energy Conservation (LCEC).