assessing solar pv's potential in lebanon · solar pv in specific areas. the paper showed that...

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ASSESSING SOLAR PV’S POTENTIAL IN LEBANON Ali H. BerjawiSara Najem Ghaleb Faour Chadi AbdallahAli Ahmad

Issam Fares Institute for Public Policy and International Affairs

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Published by the Issam Fares Institute for Public Policy and International Affairs, American University of Beirut. This report can be obtained from the Issam Fares Institute for Public Policy and International Affairs office at the American University of Beirut or can be downloaded from the following website: www.aub.edu.lb/ifi. The views expressed in this document are solely those of the authors, and do not reflect the views of the Issam Fares Institute for Public Policy and International Affairs or the American University of Beirut. Beirut, August 2017 © All Rights Reserved

Cover photo credits: Ministry of Energy and Water / Lebanese Center for Energy Conservation (LCEC) - 2016

Assessing Solar PV’s Potential in Lebanon / 1

ASSESSING SOLAR PV’S POTENTIAL IN LEBANON Ali H. BerjawiEnergy Policy and Security in the Middle East Program, Issam Fares Institute for Public Policy and International Affairs, American University of Beirut

Sara NajemNational Center for Remote Sensing, National Council for Scientific Research (CNRS), Beirut, Lebanon

Ghaleb FaourNational Center for Remote Sensing, CNRS, Beirut, Lebanon

Chadi AbdallahNational Center for Remote Sensing, CNRS, Beirut, Lebanon

Ali AhmadEnergy Policy and Security in the Middle East Program, Issam Fares Institute for Public Policy and International Affairs, American University of Beirut, Lebanon

WORKING PAPER #43

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“Lebanese policy-makers underestimate the role that solar power could play to improve Lebanon’s energy security, lower its energy bill and the environmental impact of using fossil fuels for electricity generation.”


CONTENTS

04ABSTRACT

144. UTILITY-SCALE SOLAR PV 4.1 Daily Load 144.2 Resources and Feasibility 15

051. INTRODUCTION

175. DISCUSSION 5.1 Potential Locations for Solar PV Farms in Lebanon 175.2 Future Cost Reductions 185.3 Financing Solar PV Farms in Lebanon 195.4 Dealing with Intermittency 205.5 Political Stability and Governance 21

062. ELECTRICITY SECTOR IN LEBANON 2.1 Indicators and Governance 62.2 Renewable Energy Policies in Lebanon 82.3 Current Status of Solar Energy 9

226. CONCLUSION AND POLICY RECOMMENDATIONS

113. DISTRIBUTED SOLAR POWER: CASE STUDY OF BEIRUT 3.1 Method 113.2 Results and Discussion 12

23REFERENCES

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This working paper presents a holistic view of the potential of solar photovoltaic (PV) in Lebanon for both distributed rooftop systems and utility-scale projects. It covers the technical and policy analysis that answers questions on the required financial and land resources, potential locations, deployment and financing mechanisms. As part of the technical analysis, a detailed solar map was produced for Beirut, Lebanon’s capital city. This map acts as a stand-alone feature that is available online to help inform residents and policy-makers about the technical feasibility of solar PV in specific areas. The paper showed that Lebanese policy-makers underestimate the role that solar power could play to improve Lebanon’s energy security, lower its energy bill and the environmental impact of using fossil fuels for electricity generation. We showed that solar PV alone could at least cover the daily peak load. Further technological improvements and additional substantial reduction in PV module prices would actually make such prospects more promising. In terms of practical steps, this analysis proposes that Lebanon build a capacity of around 1,000 MW of solar PV. This capacity can be divided between large-scale solar farms and distributed (rooftop) solar PV, with the majority of production coming from solar farms.

ABSTRACT


If you ever lived in or visited Lebanon, chances are you have experienced daily electricity outages. With an increasing demand for electricity, induced by population growth that is partly due to the large influx of refugees in recent years, Electricité du Liban (EDL) continues to fall short of meeting demand with an average supply of 15h per day. The deficit, which was estimated to be 33 percent in 2014, is covered by private diesel generators. Electricity generation in Lebanon is almost completely covered by imported petroleum products, consuming around 50 percent of Lebanon’s imports of fossil fuels (Ibrahim et al., 2013). On the other hand, renewable energy (RE) constitutes only 4 percent of the total power production, mainly via hydropower with a tiny contribution from other forms of renewable energy (Amine and Rizk, 2016). To improve electricity supply, diversify energy sources and reduce carbon emissions, Lebanon has pledged to cover 12 percent of its electricity demand using renewable energy sources by 2020 and signed to join the International Renewable Energy Agency (IRENA) in the same year (Hauge, 2011). This target has been further asserted in the Electricity Sector Policy Paper in 2010 (Bassil, 2010), the National Energy Efficiency Action Plan (NEEAP) 2010-2015 and the National Renewable Energy Action Plan (NREAP) 2016-2020. The Intended Nationally Determined Contributions (INDC) submitted to the COP21 climage change conference1 in Paris in 2016 (Republic of Lebanon, 2015) also committed an unconditional target of 15 percent of RE generation and a 3 percent reduction in power demand through energy efficiency (EE) improvements by 2030. These targets could be further improved to reach 20 percent and 10 percent respectively, if additional international support is provided.

1 COP: Conference of Parties

1. INTRODUCTION

In this working paper, we attempt to answer the question of whether the Lebanese government underestimates the potential of solar power. Starting from the answer of this question, the paper then proposes deployment scenarios that would accelerate Lebanon’s transition towards higher RE generation. Section 2 provides background information about the electricity sector in Lebanon, the current policy framework in support of solar energy, and the current status of this technology. Section 3 estimates the potential of rooftop PV installations in the capital Beirut, as a case study, while Section 4 examines the potential of deploying utility-scale solar PV power plants in Lebanon. Section 5 discusses the potential locations for solar farms, the future cost reductions and financing mechanisms, the issue of intermittency, and the political stability in Lebanon affecting the governance of the sector.

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2. ELECTRICITY IN LEBANON2.1 Indicators and Governance Currently, seven thermal power plants, six hydroelectric plants, and two power ships are operating in Lebanon, in addition to the diesel generators that are used to compensate for the deficit in supply (BlomInvest Bank, 2015). The actual electricity generation capacity by EDL in 2015 was 1983 MW, divided into diesel-fired Combined Cycle Gas Turbine (1051 MW), Heavy Fuel Oil (HFO)-fired steam turbines (525 MW), HFO-fired barges (367 MW) and hydropower (40 MW), in addition to generation from solar PV accounting for 9.45 MW (Amine and Rizk, 2016). Transmission and distribution losses are estimated at around 12 percent for 2010 (RCREEE, 2013). The total energy produced, excluding private generators, from 2009 until 2013 is shown in Figure 1. Prior to 2013, some electricity was imported from Egypt and Syria. This has reduced significantly due to the political instabilities in both countries and was compensated by power ships.

Figure 1. Energy production by EDL in 2009-2013 (Bassil, 2010; CAS, 2014; LCEC, 2016a)

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Electricity production by EDL in 2009-2013 (Bassil, 2010; CAS, 2014; LCEC, 2016a)

Figure 2 shows the evolution of electricity demand and supply from 2008 to 2014, illustrating the widening gap between supply and demand. The gap has increased from about 19 percent in 2008 to 33 percent in 2014.

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The mismatch between electricity demand and supply in Lebanon (adapted from BlomInvest Bank, 2015)

The share of electricity consumption by the different sectors in 2010 is shown in Figure 3 (LCEC, 2016a). Similar to other countries in the Middle East, the residential sector consumes the largest share of electricity. Although Lebanon is known for its active tertiary sector, contributing to 70 percent of the country’s GDP, the tertiary sector comes third in terms of electricity share with 18 percent, behind the industrial sector which contributes to 25 percent of the GDP and consumes 29 percent of the electricity (IDAL, 2014).

Figure 1. Electricity consumption shares by sector

Residential, 40%

Industrial, 29%

Tertiary, 18%

Agriculture and Fishery, 13%

Electricity Consumption by Sector

Figure 3

Electricity consumption by sector


The electricity consumption per capita is considered high and comparable with countries of a higher level of income. Noticeably, it is also ranked higher than the world average and the MENA region level in 2013 (Figure 4). Figure 4 also shows the low efficiency in the electricity sector showing relatively high levels of energy intensity. In terms of CO2 emissions, Lebanon generates around 22.5 Mt of CO2 equivalent (World Bank, 2016) and is ranked 78th globally (UNFCCC, 2015). Lebanon shows lower levels of CO2 emissions

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Electricity and emissions indicators (World Bank, 2016)

per capita than the MENA and the world averages and is ranked 59th globally (UNFCCC, 2015), while it has higher level of CO2 emissions per GDP USD than the World average. The power sector is responsible for 51 percent of the total GHG emissions, 32 percent being from EDL generation and 16 percent from private diesel generators, while the remaining is generated through the consumption of fuels used for cooking and heating (Ministry of Environment, 2016).

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The LCEC has developed the first NEEAP for 2010-2015 in accordance with the policy paper. It was adopted by the Council of Ministers in November 2011 and included 14 initiatives. Lebanon was in fact the first Arab country to officially adopt such a plan (LCEC, 2016a). The initiatives include promoting SWHs for residential use and employing wind and solar technologies for energy generation while encouraging decentralized power generation. These initiatives and others were only partly completed, achieving only 18.6 GWh/year of energy savings from a target of 2087.6 GWh/year (Jouni et al., 2016). The key barriers to the complete implementation of the NEEAP were lack of resources and coordination between stakeholders, lack of public engagement and robust data, and subsidized cheap electricity (Mortada, 2015). The most important achievements in solar energy were installing 350,000 m2 of SWHs with a subsidy of $200 per user by 2012 (RCREEE, 2013), establishing performance standards and labels, and implementing solar street lighting across many regions (Ruble and Nader, 2011). Moreover, building solar farms, namely the first stages of the Beirut River Solar Snake (BRSS) and the Zahrani power plant with an installed capacity of 1 MW each, were key achievements. The BRSS project aims to provide electricity for 10,000 houses with a final capacity of 10 MW and a cost of $40 million (Abdel Karim et al., 2014). The second NEEAP for 2016-2020 includes initiatives for EE measures only, while RE initiatives are separately discussed in the NREAP 2016-2020. The NREAP includes a detailed pathway to achieve the announced target for 2020 and estimations for 2030, employing wind, solar PV, CSP, and SWH technologies, in addition to biomass and waste-to-energy (LCEC, 2016b). It also discusses the policies and tools required to reach these targets, such as legislations, awareness raising, financing schemes, and a grid code (LCEC, 2016b).A major support for the expansion of solar energy in Lebanon is the net-metering policy which has been adopted by EDL since 2011. Net-metering allows the flow of electricity in two directions: from the grid to the customer in case energy demand exceeds production, and from the customer’s RE facility to the grid in case of excess production, using a bi-directional meter. Its advantages include legal and technical simplicity, in addition to the free installation of the meter by EDL (Hayek, 2011). The bill at the end of the month will be the difference between the electrical energy consumed from the grid and the energy injected into the grid. Any surplus will be carried to the next month and subtracted from the consequent bill. However, at the end of each year, the excess remaining will be cancelled (Melhem and Mougharbel, 2014). On the other hand, Feed-in-

The cost of electricity generation by EDL reached 22.73 USC/kWh in 2014 (BlomInvest Bank, 2015), while for instance, energy for residences is charged for 2.33 to 13.33 USC/kWh (Bassil, 2010). The levies from subscribers thus cannot cover the costs of generation and constitute only 22.8 percent of EDL’s financial resources in 2013, not to mention energy theft, meter tempering, and uncollected bills (BlomInvest Bank, 2015).The electricity sector is governed by the Ministry of Energy and Water (MoEW) as mandated by Law 462, which also includes provisions for privatization, liberalization, and unbundling of the electricity sector (Bassil, 2010). However, the law is not yet fully implemented; thus, the ministry still operates on the pre-law structure, namely decrees 16878/1964 and 4517/1972 which give EDL exclusive authority for generation, transmission, and distribution. Hydropower is an exception in addition to some private concessions in the areas of Zahle, Jbeil, Alley, and Bhamdoun (Farajalla et al., 2016).The Lebanese Centre for Energy Conservation (LCEC) is another body affiliated to the MoEW that develops and implements RE and EE policies and projects. Other major supporters are the UNDP and EU-funded projects, namely the CEDRO project that has implemented many EE and RE projects mainly in large institutions such as municipalities, hospitals, and schools.2.2 Renewable Energy Policies in LebanonThe Electricity Sector Policy Paper (Bassil, 2010) which was endorsed by the Council of Ministers in 2010 presents several technical options for EE and RE in addition to legislative recommendations. The actions revolve around launching the NEEAP, supporting the use of solar water heaters (SWHs), and establishing a national financial mechanism for green energy projects. The policy paper also calls for introducing the Independent Power Producers (IPP) model in collaboration with the private sector, mainly for wind farms, supported by new laws that promote green energy. Law 462 does not include any articles on RE and its support; however, it allows private generation for personal use up to 1.5 MW. Beyond that, it requires a permit or a license from the Energy Regulatory Authority (ERA) (LCEC, 2016b). Clearly, this is an obstacle to the development of RE, particularly in the absence of the ERA, which is yet to be established. Currently, laws 288/2014 and 54/2015 allows the MoEW and the Ministry of Finance to grant permits and licenses to IPPs temporarily and until the ERA is formed (LCEC, 2016b). The LCEC aims to keep these permits exclusive to RE technologies, in line with the national targets (El Khoury, 2016).


Tariff (FiT) policy is not yet introduced in Lebanon since it requires stability and credibility to be durable, which is not currently possible (Beheshti, 2010).Finally, the financing scheme, National Energy Efficiency and Renewable Energy Action (NEEREA), was implemented in 2010 by Lebanon’s Central Bank (BDL), supported by the EU, to provide incentives for green energy projects in the shape of interest-free, long-term loans provided by commercial banks to end users. The loans’ upper limit is $20 million and is offered at an interest rate of 0.6 percent for no more than 14 years (LCEC, 2015). By September 2016, NEEREA has approved more than 464 loans, totaling $322 million. Under NEEREA, 338 solar PV projects, corresponding to 63 percent of all NEEREA projects, were installed with a capacity of 13.5 MWp (Halawi, 2016). NEEREA helped in creating more than 10,000 direct and indirect jobs, with the increase in the number of companies working in solar PV from 5 in 2010 to more than 70 in 2016. (Halawi, 2016)2.3 Current Status of Solar EnergyWith around 300 sunny days a year, 8 to 9 hours of sunshine a day (CEDRO, 2013) and solar insolation between 2 and 8 kWh/m2/day (Comair, 2009), solar energy presents a clean alternative to blackouts or diesel generators, given that most electricity rationing occurs during the day. In addition to the solar irradiance levels, the relative lack of dust and sand and the moderate temperatures make Lebanon favorable for solar PV farms and ensure maximum efficiency (LCEC, 2016b). LCEC has announced that the target is to reach 12 percent of the electricity and heat energy demand in 2020 from renewable sources (El Khoury, 2016). This target includes plans to implement 150 MW of solar PV farms (capacity greater than 1 MW) and 100 MW of distributed PV systems (rooftop applications and systems with local consumption) generating 240 GWh and 160 GWh respectively and accounting for 1.35 percent of the total energy demand by 2020. The total capacity of solar PV installed in Lebanon has encountered a significant increase particularly after the introduction of the NEEREA mechanism in 2012. According to Amine and Rizk (2016), it reached 9.45 MWp in 2015 accounting for 0.47 percent of the total electricity capacity of EDL, increasing from only 320 kWp in 2010. The installed capacity constitutes of 8.37 MWp of decentralized systems and the BRSS project of 1.08 MWp. The electricity generation from the solar PV installations was estimated to be around 14 GWh in 2015, equivalent to 0.11 percent of the total annual generation by EDL (Amine and Rizk, 2016). Figure 5 shows the evolution of solar PV installed capacity and the total annual energy generation from 2010 until 2015.

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Figure 1. Solar PV installed capacity and total generation from 2010-2015 (Amine and Rizk, 2016)

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Solar PV installed capacity and total generation from 2010-2015 (Amine and Rizk, 2016)

The number of new solar PV projects increased from 18 in 2011 to 259 in 2015, with the average size of each project also increasing from 5 kWp in 2010 to 21 kWp in 2015. The total investments in these projects reached $30.52M in 2015 (Amine and Rizk, 2016). One can contribute the reason behind the increase in the rate of installing PV systems to the decrease in the price of these systems, where it fell by more than 60 percent in just six years, from 7,178 $/kWp in 2010 to 2,675 $/kWp in 2015. Electricity generation from solar PV has led to an estimated cumulative monetary saving and emissions reduction of $7,400,000 and 17,855 tCO2 until 2015 respectively (Amine and Rizk, 2016).

The Beirut Governorate stands second in terms of solar PV installations amongst other governorates in Lebanon with 25 percent, following Mount Lebanon. Being the capital of Lebanon and the center of its economic activities, Beirut consumes about 12 percent of the total electricity produced, while its area is just 0.2 percent of the total country area (BEF, 2015). Moreover, the distribution of electricity consumption in Beirut by sector, shows that the tertiary sector (comprising commercial, public, hotels and hospitals) consumes 71 percent of the energy provided by EDL, while the residential sector consumes 27 percent of it (BEF, 2015). This, compared to the fact that the commercial and residential sector are leading all around Lebanon in terms of implementing solar projects, indicates a significant potential for expanding the adoption of this technology in Beirut, within these sectors.


Further, we collected data of electricity consumption in Beirut for the years 2006 until 2013 from EDL. Our aim was to build a model that can predict the variation in this metric, which we denoted by E, and have a yearly estimate of the solar energy return. For this we split our data into training and test sets: the first consists of five years of electricity consumption and the remaining three years constitute the test set, which are both randomly sampled without repetition, 1,000 times. For each realization, we calculated the prediction and training errors for linear and higher order polynomials. Finally, the maximum likelihood model minimized both types of errors which in this case is given by

𝐸𝐸 = −7.468 × 1010 + (3.775 × 107 × 𝑌𝑌)

𝑁𝑁𝑠𝑠 = −3022997 + (1585 × 𝑌𝑌)

(1)

Likewise, we used the yearly number of subscribers from EDL, which is denoted by Ns, to predict it for 2016. Similarly, we computed the respective errors of the training and test sets for linear and polynomials to identify the maximum likelihood model, which is given by𝐸𝐸 = −7.468 × 1010 + (3.775 × 107 × 𝑌𝑌)

𝑁𝑁𝑠𝑠 = −3022997 + (1585 × 𝑌𝑌)

(2)

Then, given the number of subscribers and the total electricity consumption in Beirut we computed its average value per user, which is denoted by U.The number of potential benefitting subscribers Nk for each building k is given by:

11

𝑁𝑁𝑠𝑠 = −7.468 × 10103.775 × 107 × 𝑌𝑌 (2)

Then, given the number of subscribers and the total electricity consumption in Beirut we

computed its average value per user, which we denoted by U.

The number of potential benefitting subscribers Nk for each building k is given by:

𝑁𝑁𝑘𝑘 =𝐼𝐼𝑘𝑘ℎ×𝐴𝐴𝑘𝑘×𝑓𝑓𝑘𝑘×𝜖𝜖𝑘𝑘

𝑈𝑈 (3)

Where for building k, 𝐼𝐼𝑘𝑘ℎ is its global horizontal irradiation data, Ak is the area, fk is varying the

fraction of its usable rooftop, and 𝜖𝜖𝑘𝑘 denotes the different PV efficiencies.

Since the actual number of subscribers per building Na,k is not available, Nk will serve as an

approximation of the potential number of subscribers that can make use of solar power in a

building. The total number of potential subscribers making use of solar power in Beirut

𝑁𝑁𝑡𝑡 = ∑ 𝑁𝑁𝑘𝑘𝑘𝑘 , was also computed and compared with the total number of subscribers Ns.

Similarly, we calculated Nk and Nt corresponding to the direct normal irradiation 𝐼𝐼𝑘𝑘𝑑𝑑.

Using the Solar Analyst of ArcGIS, we ran monthly simulations to compute the cumulative

yearly irradiation Beirut receives by varying its diffuse fraction based on the work of Sfeir

(1981). The results were retrieved in the form of rasters that mapped out the global horizontal

as well as the direct normal irradiations, read in RStudio, a software used for statistical analysis,

and overlaid on top of the buildings' shapefile, to create the interactive solar map (Figure 6).

When a building's polygon is clicked on the map, a popup message appears containing

information about the average daily global horizontal irradiation 𝐼𝐼𝑘𝑘ℎ, the average daily direct

normal irradiation 𝐼𝐼𝑘𝑘𝑑𝑑, and their corresponding Nk1

1 Together with the Beirut Solar Map, available at

http://beirutsolarmap.cnrs.edu.lb/BeirutSolarMap/, a Tangram/Mapzen map was produced

showing an animation of the buildings’ shadow dance for educational purposes, and is available

at http://s-najem.github.io/Beirut-Solar-Map/#15/33.8913/35.4947.

(3)

Where for building k,

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𝑁𝑁𝑠𝑠 = −7.468 × 10103.775 × 107 × 𝑌𝑌 (2)





𝑈𝑈 (3)




















is its global horizontal irradiation data, Ak is the area, fk is varying the fraction of its usable rooftop, and

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Figure 6 The Beirut Solar Map

The expected total solar power from the yearly global horizontal irradiations Sh is (4153 × 𝜖𝜖𝑘𝑘)

GWh, where 𝜖𝜖𝑘𝑘 is taken to be 10-15 percent. These powers are calculated as follows: 𝑆𝑆ℎ =∑ 𝐴𝐴𝑘𝑘𝐼𝐼𝑘𝑘ℎ𝑘𝑘 𝜖𝜖𝑘𝑘. In order to evaluate these findings, we compare it to the total predicted electricity

consumption in Beirut, given by the maximum likelihood model (Equation 1) shown in Figure

7. The blue line is the fit of the maximum likelihood model that minimizes the test error.

denotes the different PV efficiencies.Since the actual number of subscribers per building Na,k is not available, Nk will serve as an approximation of the potential number of subscribers that can make use of solar power in a building. The total number of potential subscribers making use of solar power in Beirut

11

𝑁𝑁𝑠𝑠 = −7.468 × 10103.775 × 107 × 𝑌𝑌 (2)





𝑈𝑈 (3)




















, was also computed and compared with the total number of subscribers Ns. Similarly, we calculated Nk and Nt corresponding to the direct normal irradiation

11

𝑁𝑁𝑠𝑠 = −7.468 × 10103.775 × 107 × 𝑌𝑌 (2)





𝑈𝑈 (3)




















.

3. DISTRIBUTED SOLAR POWER: CASE STUDY OF BEIRUT As part of this study, the Beirut Solar Map, an interactive online tool, has been developed to estimate the potential of solar power gains from the installation of PV panels on rooftops in Beirut. The map also aims to promote the use of solar energy and serves as a decision-making tool for PV installations. The map, made publicly available, shows the irradiation data for each and every building in Beirut. Relevant data were only available in the form of monthly average global horizontal and direct normal irradiations in the Climatic Zoning report (UNDP, 2005), where their spatial variability within the city is not captured. Conversely, our estimates are based on fine-grained computation of irradiation on the building level using the solar analyst of ArcGIS. The simulation used buildings’ elevations and the city’s topography combined with the weather data to produce a year-long, city-wide irradiation map. Simultaneously, a maximum likelihood model was built to predict the increase in energy consumption and the number of users. Subsequently, the average total yearly savings and the number of beneficiary subscribers were estimated.3.1 MethodIn order to compute Beirut’s solar irradiation, we used its topography raster combined with the shapefile of the buildings’ footprints and elevations, accounting for the urban setting where neighboring buildings affect the total irradiation a given rooftop receives. A survey was carried out to collect the details of all the buildings. Although the three-dimensional details of the rooftops are important, it was safely assumed that they are all flat. However, this assumption should be corrected by providing the three-dimensional building details available at the municipalities. Alternatively, this could be done using LIDAR images, which when provided to a ray back-tracing algorithm, can reveal the full building details. However, these are not available for Lebanon. In addition to the geometry and elevation of neighboring buildings, overshadowing is season and latitude dependent, and directly linked to the diffuse fraction of solar irradiation which Sfeir (1981) measured and tracked its monthly variation and is in our simulation.

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3.2 Results and DiscussionUsing the Solar Analyst of ArcGIS, we ran monthly simulations to compute the cumulative yearly irradiation Beirut receives by varying its diffuse fraction based on the work of Sfeir (1981). The results were retrieved in the form of rasters that mapped out the global horizontal as well as the direct normal irradiations, read in RStudio, a software used for statistical analysis, and overlaid on top of the buildings’ shapefile to create the interactive solar map (Figure 6). When a building’s polygon is clicked on the map, a popup message appears containing information about the average daily global horizontal irradiation

11

𝑁𝑁𝑠𝑠 = −7.468 × 10103.775 × 107 × 𝑌𝑌 (2)





𝑈𝑈 (3)




















, the average daily direct normal irradiation

11

𝑁𝑁𝑠𝑠 = −7.468 × 10103.775 × 107 × 𝑌𝑌 (2)





𝑈𝑈 (3)




















, and their corresponding Nk2.

Figure 6

The Beirut Solar Map available online at: http://beirutsolarmap.cnrs.edu.lb/beirutsolarmap/

2 Together with the Beirut Solar Map, available at http://beirutsolarmap.cnrs.edu.lb/BeirutSolarMap/, a Tangram/Mapzen map was produced showing an animation of the buildings’ shadow dance for educational purposes, and is available at http://s-najem.github.io/Beirut-Solar-Map/#15/33.8913/35.4947.

The expected total solar power from the yearly global horizontal irradiations Sh is

12






GWh, where

12






is taken to be 10-15 percent. These powers are calculated as follows:

12






12






. In order to evaluate these findings, we compare it to the total predicted electricity consumption in Beirut, given by the maximum likelihood model (Equation 1) shown in Figure 7. The line is the fit of the maximum likelihood model that minimizes the test error.


10001050110011501200125013001350140014501500

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Table 1

Comparison of rooftop solar PV performance in Beirut as a function of panel efficiency and fk in 2016

PERCENTAGE OF SOLAR POWER PRODUCTION FROM THE TOTAL ELECTRICITY CONSUMPTION IN 2016

Єk fk= 0.3 fk= 0.8

10 8% 23%

15 13% 34%

EXPECTED POTENTIAL SAVINGS FROM PV INSTALLATIONS IN 2016 (MILLION USD)Єk fk= 0.3 fk= 0.8

10 9.11 26.21

15 14.81 38.73

EXPECTED POTENTIAL REDUCTION IN CO2 EMISSIONS FROM PV INSTALLATIONS IN 2016 (TCO2 )

Єk fk= 0.3 fk= 0.8

10 74,048 212,888

15 120,328 314,704

Training/Cross-Validated Predicted

Figure 7Variation in Beirut’s electricity consumption

The value predicted for 2016 is 1424 GWh. It is compared with Shfk for different PV efficiencies and varying fractions of the available rooftop area. Results are shown in Table 1. Table 1 also shows the corresponding monetary savings from energy generation assuming the cost of 1 kWh is 118.32 LBP/$0.08 USD, and the savings in terms of CO2 emissions, considering an emission factor of 0.65 tCO2/MWh (LCEC 2012).The average daily global horizontal was estimated to be around 2000 Wh/m2, while that given by UNDP (2005) is 4855 Wh/m2. This discrepancy can be explained by the fact that our simulation took into account the urban setting and the buildings’ overshadowing, whereas the Climatic Zoning values are measured from a few installed stations as well as the BRSS, where insolation is minimally affected by neighboring buildings, if at all.The number of subscribers predicted for 2016 using Equation 2, is Ns=172,114 and the corresponding average energy use is estimated to be U=8,432 kWh/year. Subsequently, Nk for each building was computed and added to the interactive map. Nt is then computed for different

12






and fk and compared to Ns. Our simulation shows that solar energy can cover 8-34 percent of Beirut’s energy demand and be accessible to the same percentage of subscribers, depending on the rooftop free-area and the panel efficiency. Accordingly, the yearly monetary savings could range from around $9 M to nearly $40 M, and the consequent CO2 emissions saving could range from 74,048 tCO2 to 322,660 tCO2. The rather conservative lower bound of 8 percent can accordingly contribute 71 percent of the target to generate 160 GWh from distributed solar PV by 2020, while the upper bound of 34 percent can exceed the target by 3 times.

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4. UTILITY-SCALE SOLAR PV

In the previous section, we have discussed the potential of distributed solar PV through results generated by the Beirut Solar Map. In this section, we examine the potential for large, utility-scale solar PV farms. The NREAP for 2016-2020 draws a pathway to achieve the announced target of 12 percent of RE by 2020. This includes a target of installing 150 MW of large centralized solar PV systems. These are defined as having capacities of 1 MW or more and not being connected for local consumption but exported to the national grid (LCEC, 2016b). The LCEC considers this target to be realistic however, in this section we show that this target underestimates the true potential for such plans and could be improved. First, ignoring the possibility of storage, we aim to identify the amount of resources required to cover the daily peak load in both the winter and summer seasons in Lebanon, and compare it to the national targets.4.1 Daily LoadThe latest daily load curve data available is from 2006, showing a typical day in January and another in June (World Bank, 2009). We manipulated this data accounting for the energy demand growth rate from 2006 until 2016, assuming the daily trend of consumption is similar. The average annual growth rate between 2008 and 2014 is estimated to be around 8 percent (see Figure 2). The resulting load curve for 2016 is shown in Figure 8.

230024002500260027002800290030003100320033003400350036003700380039004000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

(MW)

Hours

June January

Figure 8

Daily load curve for Lebanon in 2016

We are interested in the peak demand during daylight time. This time is around 10 hours in January from 7am until 5pm, while it is around 14 hours in June from 6am until 8pm (Comair, 2009). Therefore, the peak load is the area under the curve between the daylight times for the respective curves, minus the base load between these times. Results are shown in Table 2.

Table 2

Daily day loads in 2016 (in MWh)

DAY TOTAL LOAD

DAY BASE LOAD

DAY PEAK LOAD

January 34,073 23,900 10,173

June 46,887 33,776 13,111

Therefore, our target is to cover 10,000-13,000 MWh of daily peak load during the day. On the other hand, the official targets estimate the energy output subsequent of implementing 150 MW of solar PV to be 252,228 MWh/year, which is equivalent to an average of 691.2 MWh/day. This is only between 5 and 7 percent of the day peak load. Covering the daily peak load using solar PV would supply around 14 percent of the total energy demand by 2020, compared to the national target of 12 percent using all sorts of RE technologies. It is true that solar PV is only one part of the plan described in the NREAP. However, it has the lowest LCOE and the shortest payback period among other RE technologies (LCEC, 2016b).


4.2 Resources and Feasibility The two factors that are the most important and critical in the case of Lebanon for the deployment of large-scale solar PV farms are land availability and cost.To estimate land requirements, the following formula is used (CEDRO, 2016):

16

We are interested in the peak demand during daylight time. This time is around 10 hours in

January from 7am until 5pm, while it is around 14 hours in June from 6am until 8pm (Comair,

2009). Therefore, the peak load is the area under the curve between the daylight times for the

respective curves, minus the base load between these times. Results are shown in Table 2.

Table 2. Daily day loads in 2016 (in MWh) Day Total Load Day Base Load Day Peak Load January 34,073 23,900 10,173

June 46,887 33,776 13,111

Therefore, our target is to cover 10,000-13,000 MWh of daily peak load during the day. On the

other hand, the official targets estimate the energy output subsequent of implementing 150 MW

of solar PV to be 252,228 MWh/year, which is equivalent to an average of 691.2 MWh/day.

This is only between 5 and 7 percent of the day peak load. By covering daily peak-load using

solar PV would supply around 14 percent of the total energy demand by 2020, compared to the

national target of 12 percent using all sorts of RE technologies. It is true that solar PV is only

one part of the plan described in the NREAP. However, it has the lowest LCOE and the shortest

payback period among other RE technologies (LCEC, 2016b).

The two factors that are the most important and critical in the case of Lebanon for the

deployment of large-scale solar PV farms are land availability and cost.

To estimate land requirements, the following formula is used (CEDRO, 2016):

𝐸𝐸 = 𝐴𝐴 × 𝜀𝜀 × 𝐼𝐼 × 𝑃𝑃𝑃𝑃 (4)

Where E is the actual energy yield (MWh), A is the PV active area (m2), 𝜀𝜀 is the PV conversion

efficiency (%), I is the average daily horizontal solar irradiation (MWh/m2), and PR is the

performance ratio accounting for losses and deviation from standard testing conditions.

Average values of daily total horizontal solar insolation for the months of January and June in

different regions in Lebanon are shown in table 3 below (UNDP, 2005). The different regions

show similar values of insolation. Accordingly, an average value of the different regions was

used in the calculations.

Table 3. Global horizontal insolation values for Lebanon Wh/m2/day Beirut Bayssour Qartaba Zahle Cedars Average January 2,388 2,504 2,472 2,522 2,357 2,449

(4)

Where E is the actual energy yield (MWh), A is the PV active area (m2), Є is the PV conversion efficiency (percent), I is the average daily horizontal solar irradiation (MWh/m2), and PR is the performance ratio accounting for losses and deviation from standard testing conditions.Average values of daily total horizontal solar insolation for the months of January and June in different regions in Lebanon are shown in Table 3 below (UNDP, 2005). The different regions show similar values of insolation. Accordingly, an average value of the different regions was used in the calculations.The efficiency factor is taken to be 16 percent as the average value of commercial crystalline solar panels, which have the highest global market share with around 90 percent (IEA, 2014). However, efficiency is expected to further improve and contribute in a major way to less prices and more yield per area (Gielen et al., 2016). The best achieved commercial efficiency of crystalline solar panels currently exceeds 21 percent (IEA, 2014), while its global average is expected to reach 21 percent by 2025 (Gielen et al., 2016). According to IEA (2014), a well-designed PV plant can achieve a yearly average PR of 80 to 90 percent. Therefore, we will assume a yearly average of 85 percent. This is in line with the tested value reported by LCEC (2016b) for the BRSS plant during the month of April, which is 88 percent. Parameters and results for 2016 are given in Table 4.

Table 3

Global horizontal insolation values for Lebanon (Wh/m2/day)

BEIRUT BAYSSOUR QARTABA ZAHLE CEDARS AVERAGE

January 2,388 2,504 2,472 2,522 2,357 2,449

June 7,192 7,210 7,193 7,211 7,211 7,203

Table 4

Area requirements for installing solar PV farms

PARAMETERS JANUARY JUNE

Energy Yield (MWh) 10,173 13,119

GHI (kWh/m2/day) 2.4485 7.2034

Performance Ratio 0.85 0.85

Efficiency 0.16 0.16

Area (km2) 30.55 13.38

Assuming installed plants have efficiency of 21percent, the required area would significantly decrease to 25.7 km2 in January and 11.26 km2 for June, for the same energy yield.The required capacity of the solar farm is calculated by dividing the actual energy yield by the number of daylight hours. To cover the winter day peak load, the required capacity is 1,018 MW, while that of summer time is around 937 MW. Since the capacity needed for the winter case is greater, it will be considered as the target for the following discussion. Therefore, this capacity can cover even more than the day peak load during summer and contribute to the base load generation. This is approximately an excess of 1,133 MWh, which is enough to cover around 3 percent of the baseload during the day in June.

16 / Working Paper

4.2.1 Cost AnalysisThe major barrier usually considered for building solar PV farms is the upfront cost. However, the global weighted average utility-scale solar PV costs have declined greatly from around 5,000 USD/kW in 2009 to 1,800 USD/kW in 2015. They are further expected to fall by 57 percent to 790 USD/kW in 2025 (Gielen et al., 2016). Accordingly, the required investment for building 1,018 MW of solar PV would cost around $1.83 billion, assuming the full capacity is built in the current prices. However, if Lebanon decided to adopt an ambitious expansion plan of solar PV, this will likely be multi-phased, i.e., benefiting from potential cost reduction in the future. On the other hand, the cost required to build coal-fired and natural gas power plants is about 3,000 USD/kW and 1,200 USD/kW respectively (Gielen et al., 2016). Therefore, a plan to build gas-fired plants with the same capacity would cost around $1.22 billion.A conventional way to look at costs is to conduct a levelized cost of electricity (LCOE) analysis. It follows from the standard discounted cash flow method which considers the time-value of money. It is used to calculate the life cycle cost of producing electricity by different technologies. For solar PV, the parameters we used and the results are presented in Table 5. PV modules are usually guaranteed for a lifetime of 25 years at a minimum of 80 percent of their rated output (IEA, 2014), thus the annual degradation of 1 percent. Operations costs, mainly maintenance costs, are typically around 1 percent of the capital cost (Gielen et al., 2016). Sensitivity analysis is also considered, accounting for falling capital cost and improved efficiency for 2025 assuming the same capacity is planned. It should be noted that a relatively high value of discount rate of 10 percent has been chosen for this analysis, reflecting Lebanon’s poor credit rating.3

3 Ten percent discount rate is perhaps a bit conservative value for Lebanon as Lebanon’s current credit rating is B- according to S&P, which is higher than the investment grade rating of BBB-, however the existence of political risks could play a role in deterring investors.

Table 5

Levelized cost of electricity for solar PV in 2016 and 2025

TECHNOLOGY ASSUMPTIONS 2016 2025

Project size (MW) 1,017 1,017

Investment cost ($/kW) 1,800 790

Annual load factor 25% 25%

Discount rate 10% 10%

Lifetime 25 25

Annual degradation 1% 1%

Operations cost 1% 1%

Fuel cost ($/kWh) 0 0

Levelized cost of electricity (USC/kWh) 10.69 4.74

The cost of electricity generation by EDL reached 22.73 USC/kWh in 2014 (BlomInvest Bank, 2015) with the highest contribution coming from the fuel bill (Bassil, 2010). Therefore, employing solar energy using PV farms would generate savings of around $500 million/year with a 10 percent discount rate. This would result in a payback period of not more than four years, based on an assumption of covering the daily peak demand with fuel oil rather than solar PV in 2014 prices, noting that only around 70 percent of the whole demand is covered by EDL generation (Figure 2). Clearly, oil price is a major parameter in any comparative analysis of renewables vis-à-vis fossil fuel electricity generation. Bassil (2010) reports the cost of electricity generation by EDL was equal to 17.14 USC/kWh in 2009. Comparing the current prices of oil with that of 2009, it is approximately in the same range. As a result, the savings according to today’s oil prices would be around $275 million/year. The payback period could therefore be longer. Similarly, huge savings of CO2 emissions can be achieved summing up to around 2.76 MtCO2/year, considering an emission factor of 0.65 tCO2/MWh (LCEC, 2012).The aforementioned analysis did not include the cost of land. According to LCEC (2016b), the cost of land varies significantly across Lebanon, ranging from 2.5 USD/m2 to 40 USD/m2. The variation is dependent on the proximity to urban areas, roads, touristic sites, water bodies, and other factors. Therefore, for an area of around 30 km2, this would consequently result in a cost of land required for building solar PV plants ranging from $75 million to $1.2 billion. However, focusing on land with lower values, we expect the cost to range between $75 million to $300 million.


5. DISCUSSION

non-south facing slopes, and land areas of less than 10,000 m2 (to be able to cater at least 1 MW), were all omitted. Moreover, a 5km wide strip along the shore was not considered to prevent the high cost of land, while a 5km buffer zone within all urban settlements was considered to reduce the cost of transmission and distribution and stay close to electrical substations. Finally, the remaining areas were overlaid with the irradiation map to identify the locations with the best technical potential.

5.1 Potential Locations for Solar PV Farms in LebanonFigure 9 shows the areas with the best technical and economic viability, and the least environmental and social drawbacks. The total suitable area is around 148 km2 of Lebanon’s total area (10,452 km2), with 61 km2 having the highest irradiation levels (2265 kWh/m2). This is twice as much as required in our study. This total area excludes areas exposed to hazards such as landslides, fires, earthquakes and floods. Additionally, agricultural land, forestry, historical sites, wetland and water bodies, slopes of more than 10 degrees,

Figure 9

Filtered potential land areas for solar PV farms in Lebanon

18 / Working Paper

In this context, Assi et al. (2016) propose integrating solar PV panels with existing thermal power plants, which has already been implemented in the Zahrani power plant, while taking as case studies the Zouk and Jiyeh power plants. This would lead to increased generating capacity, greener power plants, cheap unused land made available for use, and downsized storage cost (Assi et al., 2016).5.2 Future Cost ReductionsSolar systems have encountered a big revolution in the past years with the global installed capacity increasing from 40 GW in 2010 to 227 GW in 2015 (Gielen et al., 2016). This is mainly due to the plummeting costs of these systems. These costs have reduced by more than half in the past years, with instances reaching as low as 1200 USD/kW in India, and are further expected to fall in the coming few years by more than 50 percent. The projected decline can be attributed to a combination of technological innovation driven by global competition, economies of scale, and the learning curve (IEA, 2014). Moreover, solar systems accounted for 20 percent of the total installed capacity built in 2015 with a typical cost ranging between 6 and 10 USC/kWh, while the weighted average LCOE for solar PV was 13 USC/kWh in 2015 (Gielen et al., 2016). However, further lower prices can be found

(Figure 10) with a recent example from the United Arab Emirates with a record bid of 2.42 USC/kWh submitted to build a 365 MW plant in Abu Dhabi (Bloomberg, 2016a). The LCOE for solar PV systems has already reached below retail electricity prices in several countries such as Australia, Denmark, Italy and Spain, providing additional incentives for consumers to build decentralized systems and consume the electricity they generate (IEA, 2014). The cost of solar PV is getting closer to the cost of electricity generation from traditional sources, particularly due to the strict air pollution standards on new coal plants, the increasing safety standards on new nuclear plants, and the varying prices of natural gas for new gas plants (IEA, 2014). Comparing to coal and gas-fired power plants, its global weighted average LCOE range is between 5 and 10 USC/kWh (Gielen et al., 2016). For instance, the previous record low bid of 2.99 USC/kWh in Dubai is even a third less than the cost of electricity generation by a coal plant commissioned recently there (Bloomberg, 2016b). Therefore, with the projected price fall of solar PV for 2025, it is expected to become the cheapest form of power generation.

Figure 10

New low solar bids 2013-2016 (Adapted from Cleantechnica, 2016)

Figure

5.85

4 3.7

8.5

7.1

5.84 5.714.9 4.85 4.5

3.95 3.65 3.62.99 2.91

2.42

0123456789

New Low Solar Bids 2013-2016

Subsidized Price (USC per kWh) Unsubsidized Price (USC per kWh)


5.3 Financing Solar PV Farms in LebanonLooking at the economics of solar PV, project costs are not the only variable, but it also depends on the business model for financing and recovering the revenues. Despite the decreasing cost of solar PV systems, financial incentives are still needed to support the deployment of this technology, not only because it is capital intensive, but also because it is more sensitive to investment risks due to the technology and resource uncertainties and the lack of a long-term price visibility (Abdmouleh et al., 2015; IEA, 2014). The risk is highlighted by the high discount rate which can overburden investments unnecessarily as it may not reflect the actual project risk (Sgouridis et al., 2016). Also, comparing to conventional methods of energy generation, RE projects are usually smaller in scale thus could not always benefit from economies of scale (Abdmouleh et al., 2015). However, models such as build-operate-transfer (BOT) or build-own-operate (BOO) can decrease the chosen discount rate to reflect the true project risk at the utility scale (Sgouridis et al., 2016).Funding can be obtained either from the public sector or the private sector. Public sector funds are provided by the governments to invest in RE projects either through grants or low-interest loans. The main facilitators of investments in solar PV are governments providing low-interest loans and available lands. Private sector funds, on the other hand, are provided from banks or other financial institutions. These play an important role in the long-term commercialization of RE.A common model used for rooftop applications is leasing where households can install the systems without upfront costs, but are required to pay a monthly fee cheaper than the electricity tariff of the grid (Gielen et al., 2016). However, this model is losing ground to long-term loans (Gielen et al., 2016). Other incentives include the widespread policies of FiT and net-metering, which are currently being scrutinized upon the reduced costs and increased deployment of PV systems (IEA, 2014).For utility-scale RE projects, the most common model is the power purchase agreement (PPA). A PPA is a legal contract between two parties, a power purchaser, often a state-owned utility, and a selling privately-owned electricity producer, usually lasting between 15 and 30 years (Beshara, 2012). The agreement includes provisions for start and termination dates, capacity and output, operations and metering, and the rates for electricity (Beshara, 2012). Mechanisms to regulate this can be done mainly through FiT or a tendering process, i.e., competitive bidding (Abdmouleh et

al., 2015). The latter system is the most favorable system as it encourages competition resulting in cost reduction via market-based pricing. However, the risk emerges with unsustainable price bids. PPA is part of any BOT, BOO or BOOT model for power generation projects to be implemented by an IPP (Beshara, 2012). Long-term PPAs have a key role in making RE projects successful in terms of financing and profitability, as it secures long-term revenue stream for a BOT or a concession project for an IPP from the sale of energy produced, and provides guarantees that this energy is needed by the purchaser (Beshara, 2012). In practical terms, if RE projects are to be done through competitive bidding, the request for proposals should include a PPA model as proposed by the purchaser (Beshara, 2012). Looking at countries around Lebanon, the model frequently used for building utility-scale solar plants is a partnership between the public and private sectors. PPAs with tendering process is employed for privately-owned plants, in addition to international loans or grants for state-owned plants and decentralized systems. For instance, the latest projects in the UAE were based on long-term PPAs (Bloomberg, 2016b), while low borrowing costs supported the low record bid (Bloomberg, 2016a). Jordan, with its ambitious targets for renewables, is also expanding its RE capacity by PPAs through IPP tendering which is receiving low bids. By September 2014, the Jordan Ministry of Energy and Mineral Resources has signed 12 agreements to develop solar power projects (Calabrese, 2015). For instance, the largest solar plant in Jordan, Shams Ma’an, is a privately developed and owned plant, which has signed a 20-year PPA with the Jordanian electricity authority (ShamsMaan, 2016). Accordingly, Jordan has received loans from the European Bank for Reconstruction and Development (EBRD), which has financed 4 out of 12 solar PV plants in Jordan (Zgheib, 2016). Other funders include the International Finance Corporation (IFC), the Dutch Development Bank, and the Europe Arab Bank (IFC, 2016). Jordan has also implemented the net-metering policy to incentivize rooftop applications, and has received funds from the French Development Agency to support the transmission capacity (MESIA, 2016). In Morocco, the largest solar power plant in the world under construction, has received funding from the African Development Bank, Climate Investment Fund, and the World Bank (Calabrese, 2015) for building CSP facilities reaching 510 MW in 3 stages, while it initiated an IPP-based program for PV facilities totaling 170 MW (MESIA, 2016). Egypt, on the other hand, has resorted to the FiT mechanism

20 / Working Paper

to support RE projects, while also receiving funds from multilateral financial institutions including the IFC, the EBRD, and the Overseas Private Investment Corporation (OPIC) (MESIA, 2016). The legal framework in Lebanon, including the Electricity Sector Policy Paper and law 462 and its amendments, supports the inclusion of the private sector through the IPP and PPA models. This allows Lebanon to be ready for public-private partnerships to increase the solar power capacity through utility-scale projects. However, no permits for IPPs have been given by the government yet to build utility-scale projects, as per the process described earlier. More recently though, a call for expression of interest was launched by the MoEW to build several solar farms by the private sector with a total of 120 to 180 MW, in addition to rooftop systems on ten public buildings (El Khoury, 2016). Moreover, in support of decentralized PV projects, NEEREA loans are offered by most commercial banks in collaboration with BDL covering 100 percent of the proposed system price with low interest rate for up to 14 years. However, a lack of awareness of the existence of such supporting schemes and of the falling prices of PV systems is evident as per a survey by Greenpeace (2016), showing that more than 65 percent of respondents do not know of the existence of the NEEREA scheme and the net-metering policy, while 60 percent attributed their unwillingness to install PV systems to their high cost.5.4 Dealing with IntermittencyOur analysis considers generation during daylight hours which aims to cover the energy peak load during these times, and therefore does not include the possibility of storage for night generation. However, even during the day and throughout the seasons, solar energy may still encounter intermittency due to weather conditions such as cloud cover or snow. In our analysis, we presented estimations for the required capacity for both winter and summer seasons, hence accounting for different solar irradiation levels and total peak load required. Accordingly, we considered the maximum of these two, i.e., the capacity required to cover the load in the winter. In addition, EDL currently provides less than 70 percent of the energy demand with blackouts reaching 8 hours on average. Thus, any additional source of generation would be considered a plus at the moment, even with prospects of intermittency and variability, rather than being a waste or a destabilizer.

Technically, there are several solutions for managing the intermittency of solar power and other variable renewable energies. These include the creation of flexible mix for electricity generation, grid interconnections, demand-side management, electricity storage, oversizing generation capacity, forecasting the weather, and using non-variable energy sources such as hydropower to fill temporary gaps in supply. Reliable daily and seasonal weather forecasting can reduce the cost of operating solar PV by $0.01-0.02/kWh (Delucchi and Jacobson, 2011), providing an opportunity to optimize the energy system (Abdullah et al., 2015). Interconnections of geographically dispersed facilities allow smoothing out the effects of variability of solar PV over large areas due to passing clouds, thus enabling flexible sharing of power generation (Delucchi and Jacobson, 2011). It is also important to avoid setting up high solar PV capacities in areas with low power demand and relatively weak distribution grids where variability may cause voltage problems, create reverse power flows, and lead to large grid congestions (IEA, 2014). Therefore, in addition to interconnections, a smart grid and grid codes would help drive inverters to automatically provide voltage control and frequency regulation (IEA, 2014). The network grid in Lebanon already lacks grid codes and sufficient interconnections, but there are current works and plans to implement it in scope of expanding renewable energy generation (LCEC, 2016b). Grid proximity was also considered when setting up the potential locations map in Figure 9, making these locations close to urban settlements and electricity substations and in line with the existing grid network to reduce the transportation cost and keep the possibility for storage.The MENA region provides an advantage for employing solar PV to supply the peak load given the natural overlap of power demand for cooling and the solar power supply when the sun is out (Abdullah et al., 2015). The complementary nature of renewable energy sources is another advantage which can be considered. For instance, when the sun is not shining, the wind is often blowing, and vice versa. Therefore, solar PV plants can be complemented with existing hydropower and wind power facilities set to be implemented in Lebanon.


5.5 Political Stability and GovernanceA strong political support is required to fulfill commitments in terms of RE targets. This support includes regulatory frameworks and financial schemes mentioned earlier, which are relatively adequate in Lebanon now. However, political continuity is not usually sustained between governmental or parliamentary terms, where a new minister can decide to discard his or her predecessor’s work and plans, particularly if he or she belonged to an opposing political party. Moreover, the lack of transparency in governance and particularly in bidding processes in all the sectors managed by the Lebanese authorities, such as the telecommunication and waste management sectors, is a barrier to the trustworthy involvement of the local or international private sector in partnerships with the public sector. Additionally, political stability is required for a safe investment environment, not only for the private sector, but also for international fund support. For instance, the political stalemate in the country in recent years has delayed the agreements of loans from the World Bank reaching €1 billion euros and led to losing other loans from France (AFP, 2015). Therefore, international financial support, similar to that given to neighboring Jordan or Egypt, may be at risk anytime due to unexpected political deadlocks. Even further, any new legislation or policy in support may be hindered due to political problems or an institutional vacuum. Political interests can also be a barrier in the case of heavy energy subsidies that are decreasing the competitiveness of RE. This is the case when politicians are not able to remove these subsidies partially or gradually, to push for a wider use of RE fearing from public anger, although it is mentioned in the reforms of the Electricity Sector Policy Paper. Another challenge is the regional turmoil surrounding Lebanon, particularly near the eastern borders with Syria. Figure 9 shows that the area of land with the highest irradiation level, although barren and technically sound, are concentrated very close to the eastern border. This constitutes a practical barrier and a high-level security threat to the implementation of solar PV projects in these locations.

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6. CONCLUSION AND POLICY RECOMMENDATIONSThis paper presented a holistic view of the potential of solar PV in Lebanon, covering distributed rooftop systems and utility-scale projects. The analysis showed that Lebanese policy-makers underestimate the role that solar power could play to improve Lebanon’s energy security, lower its energy bill and reduce the environmental impact of using fossil fuels for electricity generation. While Lebanon’s LCEC considers the current national targets as realistic, the analyses presented in this paper showed that solar PV alone could at least cover the daily peak load, being technically and economically sound. Further technological improvements and further substantial reduction in PV module prices would actually make such prospects more promising. In terms of practical steps, we propose that Lebanon can build a capacity of around 1,000 MW of solar PV. This capacity can be divided between large-scale solar farms and distributed (rooftop) solar PV, with the majority of production coming from solar farms. The Beirut Solar Map analysis presented in Section 3 concludes that a minimum of 114 GWh/year can be generated using rooftop application in Beirut alone, while the maximum can reach 484 GWh/year. A full deployment of these applications in Beirut only can contribute by around 12 percent to the total load targeted. Even under conservative estimates, assuming a 50 percent deployment scenario, rooftop solar PV systems can contribute 6 percent of the load. However, this would incur additional costs as rooftop applications do not benefit from economies of scale, and are thus more expensive than utility-scale installations, even though grid savings can balance the difference. As proposed above, this paper advocates large expansion of solar PV farms in Lebanon. Our preliminary location screener showed that Lebanon can at least have 10 suitable locations to build such projects. The screening methodology included several constraints such as the avoidance of steep topographies, shores, and hazard zones susceptible to earthquakes, fires, landslides, and floods in addition to favoring locations with areas exceeding 10,000 m2 lying in the vicinity of the urban settlements. These respectively guarantee the generation capacity of at least 1MW and low transportation costs. However, further improvements to the grid may be required to be able to handle the full capacity targeted. Financing can be obtained

through partnerships between the public and the private sectors through the long-term purchasing power agreement models, in addition to grants and loans from international donors and multilateral financial institutions. Lebanon’s legal framework is ready to include the private sector in production in partnership with the public sector. Nonetheless, Lebanon remains vulnerable to political instability which might constitute a barrier to the wide deployment of PV systems and the advancement of the electricity sector.


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ABOUTTHE PROGRAMEnergy Policy and Security in the Middle East ProgramThe Energy Policy and Security in the Middle East Program at the Issam Fares Institute for Public Policy and International Affairs was launched in 2016 as a Middle East-based, interdisciplinary, platform to examine, inform and impact energy and security policies, regionally and globally. The Program closely monitors the challenges and opportunities of the shift towards alternative energy sources with focus on nuclear power and the Middle East. The Program has been established with a seed grant support from the John D. and Catherine T. MacArthur Foundation.

ABOUT THEAUB POLICY INSTITUTEThe AUB Policy Institute (Issam Fares Institute for Public Policy and International Affairs) is an independent, research-based, policy-oriented institute. Inaugurated in 2006, the Institute aims to harness, develop, and initiate policy-relevant research in the Arab region.

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▸ Enhancing and broadening public policy-related debate and knowledge production in the Arab world and beyond

▸ Better understanding the Arab world within shifting international and global contexts ▸ Providing a space to enrich the quality of interaction among scholars, officials and civil

society actors in and about the Arab world ▸ Disseminating knowledge that is accessible to policy-makers, media, research communities

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