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EDL shutting down plants to limit losses

The Zouk power plant is operating below full capacity in a bid to conserve fuel.

BEIRUT: An official at the state-owned Electricite du Liban said Wednesday that power plants have been shut down to limit fuel consumption, warning that severe electricity rationing may have to be introduced if fuel subsidies do not reach the required level.

“So far we are producing 1,500 megawatts but the actual demand has exceeded 2,900 megawatts and this is due to the presence of 1.5 million Syrian refugees. If the Finance Ministry does not meet our demand to raise the allocations for fuel and gas subsidies then we have no other choice but to make further power cuts,” an EDL official told The Daily Star.

She added that so far EDL has not yet expanded power rationing but admitted that two or three power plants have been temporarily shut down in order to limit the consumption of fuel oil and gas oil.

Lebanon’s dependence on fuel and gas oil to run the existing power plants is one of the causes of the company’s huge deficit.

Some critics have blasted former Energy Minister Gebran Bassil’s plan to build more power stations and upgrade the existing ones without seeking ways to reduce EDL’s losses.

EDL has written to the Finance Ministry that the allocation for fuel oil not be slashed from $1.8 billion to $2.2 billion, warning that any decision to revise the allocation would compel the company to increase rationing.

Outside Beirut, most parts of Lebanon are experiencing 8-10 hours of electricity rationing every day, but if the new measures are applied then customers could be left without power for over 14 hours a day.

The EDL official stressed that one of the options to cope with the increase in electricity production was an increase in tariffs in a proportional way and in a manner that would not hurt limited income families.

Energy and Water Minister Arthur Nazarian said earlier that the 700 MW plan that was approved by the Cabinet in 2010 would be implemented very soon, noting that two or three plants would increase production at the end of this year.

But the minister insisted that increasing electricity production could cause EDL’s deficit to increase to alarming levels, and for this reason he favored revising the electricity rates as the best choice.

At a workshop, Nazarian said rates would only be revised once new power plants become operational.

He and other MPs said the new rates would be even cheaper than the fares charged by the owners of private generators.

MP Ghazi Youssef urged the government to take the bold decision to increase the electricity tariffs, reminding the participants in the workshop that the total spending on electricity, including the construction of plants and the cost of subsidizing fuel oil over the last 20 years, has cost the treasury over $27 billion.

 
A version of this article appeared in the print edition of The Daily Star on June 26, 2014, on page 5.

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Summary

An official at the state-owned Electricite du Liban said Wednesday that power plants have been shut down to limit fuel consumption, warning that severe electricity rationing may have to be introduced if fuel subsidies do not reach the required level.

If the Finance Ministry does not meet our demand to raise the allocations for fuel and gas subsidies then we have no other choice but to make further power cuts," an EDL official told The Daily Star.

She added that so far EDL has not yet expanded power rationing but admitted that two or three power plants have been temporarily shut down in order to limit the consumption of fuel oil and gas oil.

The minister insisted that increasing electricity production could cause EDL's deficit to increase to alarming levels, and for this reason he favored revising the electricity rates as the best choice.


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