Power policy

Lebanon’s power sector is dominated by fossil fuels and imports. In 2009, the government announced a target for 12% of primary energy consumption to come from renewables by 2020, and this ambition was adopted as a part of the country’s national strategy in 2010. An update in 2019 set a target for 30% of final energy consumption to come from renewables by 2030. Lebanon’s National Renewable Energy Action Plan (NREAP), which was released in 2016, provided a roadmap for how to achieve the 2020 and 2030 goals. However, the country largely missed its 2020 target as vested interests in the fossil fuel industry and financial crisis have made it difficult to make progress without foreign intervention. The next iteration of the NREAP will be released this year for the 2021-25 period.

Only one power purchase agreement (PPA) has been signed to date in Lebanon – a 20-year contract for the 226 megawatt (MW) Akkar Wind Farm. The auction for the farm was launched in 2013, but the PPA was only signed in 2018, and the project has yet to reach financial close or the start of construction. There are three more renewable energy auctions pending at varying stages: four wind farms (each 50-100MW) totaling 260-520MW launched in 2018; 12 solar PV plants (each 10-15MW) totaling 120-180MW launched in 2017; and three solar PV-plus-storage plants (PV: 100MW each and storage: 70MWh each) totaling 300MW launched in 2018.

Power prices and costs

Lebanon’s national utility, Electricite du Liban (EDL), has a monopoly on transmission and distribution to end-users but has not adjusted tariffs in several years. This has contributed to EDL accounting for around 40% of the country’s national debt.

Power market

EDL has a monopoly on transmission and distribution as well as retail of electricity. Any reforms to EDL or the power market are unlikely in the current political situation. Diesel and heavy-fuel generation dominate Lebanon’s power mix in the form of ageing plants, leased power ships, or illegal private generators. The country imports some electricity from the Syrian interconnector. The law authorizing IPPs is still pending implementation; however, an exceptional decree granting the executive temporary powers to license new projects, which was introduced in 2014 and extended for three years in April 2019, has made the current pipeline of projects possible.

Doing business and barriers

Massive debt has handicapped EDL’s ability to make system improvements, and so consumers experience outages for up to 17 hours each day. Private diesel generators often fill the generation gap.

Lebanon’s government had intended to launch another auction for 24 solar farms in 2020, targeting 240-360MW of capacity, but the economic crisis has stalled all progress in the renewable energy auction arena. Stakeholders suggest that these auctions will likely not move forward without international intervention, such as from the International Monetary Fund (IMF).

EV market

Article 55 of Lebanon’s 2018 Budget Law set customs and excise taxes for private electric vehicles (EVs) and hybrid electric vehicles (HEVs) at 0% and 20% of the vehicle price, respectively. For public passenger transport vehicles, the law set taxes at 0% for EVs and 10% for HEVs. Owners of EVs and HEVs were made exempt from registration fees and the annual road tax for the first year. The law was renewed in 2019 although it is unclear how long this support will last given Lebanon’s fiscal crises.

EV policy

Apart from the Budget Law, no substantial policy on clean transport has been passed and the EV market remains at an early stage.

Buildings market

In 2016, the Lebanese Center for Energy Conservation (LCEC) published the country’s second National Energy Efficiency Action Plan (NEEAP) for the 2016-2020 period. The NEEAP sets initiatives for energy efficiency across the country’s economy, including buildings, industry and agriculture. While the plan outlines several initiatives across the buildings sector, including setting energy performance standards, minimal progress has been made. This follows the LCEC recording 0% completion for the buildings code initiative outlined in the 2011-15 NEEAP. The LCEC is in the process of updating the document for the 2021-25 period.

It is worth noting that as a subtropical country, the low-carbon heating market remains immaterial for Lebanon.

Buildings policy

The government has yet to implement any substantive policy support in this sector and the low-carbon heat market remains at an early stage.