Middle East power outages highlight urgent need for reform, says GlobalData’s MEED

Jennifer Aguinaldo, Energy & Technology Editor at GlobalData’s MEED, comments: “As countries that are more tuned into climate change in the region jockey for position as potential green hydrogen hubs, protests are erupting in countries including Iraq, Lebanon and Algeria due to power outages, lack of potable water, or both. The summer months are especially challenging for these countries as soaring temperatures drive electricity demand higher, causing ageing thermal power plants or weak and inefficient transmission and distribution facilities to trip.”

The situation in Lebanon is especially difficult, if not unprecedented. Two of its main thermal power plants, which supply around 40% of the country’s electricity, have shut operations twice within two months due to lack of fuel, plunging certain parts of the country into power outages of up to 22 hours a day. While Lebanon has a renewable energy plan in place, it has installed barely 50MW of renewable energy, unlike fellow fossil-fuel-challenged countries Jordan and Morocco, which have each achieved double-digit renewable energy share in their electricity generation mix.

Aguinaldo continues: “Lebanon’s future government will have to prioritise building renewable energy capacity to reduce fuel import bills. Equally important, the country will have to revamp its entire energy structure by addressing the subsidies regime and administrative and fiscal issues, particularly at state utility Electricite du Liban, and rampant illegal connections.”

Supply disruptions

In Iraq, protests erupted in early July due to power outages that affected even the more affluent areas of Baghdad. While demand has routinely outstripped Iraq’s electricity production in the summer months, alleged acts of sabotage on transmission and distribution networks exacerbated the loss of electricity in parts of the country in July.

Aguinaldo comments: “Despite the semi-annual power outage-related incidents and protests, Baghdad has yet to make a major breakthrough in terms of building renewable energy facilities, although the recent signing of an agreement with UAE-headquartered Masdar to develop about 2GW of renewable energy capacity is promising.”

In Algiers, reports of people queuing for drinking water emerged recently as the country began rationing water supply due to the past three extraordinarily dry years with little rainfall. While the government has been making efforts to build small-scale water desalination plants across parts of the country, a more consistent strategy is required to avert a country-wide water crisis.

Aguinaldo adds: “The prevalent inadequacy of utilities and services in these countries reflect their governments’ failing strategies to combat bureaucracy, overhaul their investment legislations and attract foreign entities to invest in modernising their infrastructure. Until these changes are implemented, investors will be happy to invest elsewhere, and these protests are likely to remain an unfortunate summer staple.”