8 LEVANT: WHERE POLITICS DEFEAT ALTERNATIVE …
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The threat to the utilities is growing in Jordan and Palestine but is yet
to be felt in Lebanon, which has not embarked on subsidy reforms. For
NEPCO, the revenues from the highest paying consumers cover a significant share of the losses incurred from the subsidies retained for the lowest
consumers, and the utility cannot afford to lose them. Consequently,
as reported by interviewees, the Jordanian utility has been hesitant to
grant permissions for power wheeling, especially for commercial banks
and hotels, blaming the weakness of the grid. Eventually in 2019, the
government halted licenses for energy projects of a capacity higher than
1 MW, until grid was reinforced and in an attempt to delay restructuring
the power market.
Palestine’s distribution companies are the threat to solar energy. These
companies purchase power from Israel and make significant profits. Yet,
the cost of power from rooftop solar systems currently stands for the enduser at 10% less than electricity purchases, risking deflections from the
grid, and major revenue losses for the distribution companies.
Competing with Fossil Fuels
While the competition with the utilities is still nascent, the long history
of fuel imports has created vested interests across the value chain that
renewable energy threatens.
As these economies are not petroleum producers, there is no concrete
obvious internal pressure to maintain fossil fuels’ dominance. However,
alternative energy creates a wide set of winners and losers, with the latter
being led by the fossil fuel industry, casting no doubt that there is a sort
of competition, although not easily quantifiable.
Across the value chain, petroleum companies, fuel importers, and
distributors, among others, have been making hefty revenues from the
fuel dominance in quasi-monopolized economies. The key demonstration of the vested interests is the chronic lack of willingness to change the
electricity sector. Despite continuous discussions in Jordan to improve the
electricity sector, and deal with NEPCO fiscal deficit, the government has
not yet taken any serious efforts. Lebanon’s plans to switch to natural
gas date back to mid-2000s and have been formalized and adopted by
the Lebanese parliament through the 2010 policy paper for the electricity
sector, but have constantly been stalled. The plan included the implementation of one Floating Storage Regasification Unit (FSRU), a vital
component of LNG supply, but was changed in 2018 to three units to
231
The threat to the utilities is growing in Jordan and Palestine but is yet
to be felt in Lebanon, which has not embarked on subsidy reforms. For
NEPCO, the revenues from the highest paying consumers cover a significant share of the losses incurred from the subsidies retained for the lowest
consumers, and the utility cannot afford to lose them. Consequently,
as reported by interviewees, the Jordanian utility has been hesitant to
grant permissions for power wheeling, especially for commercial banks
and hotels, blaming the weakness of the grid. Eventually in 2019, the
government halted licenses for energy projects of a capacity higher than
1 MW, until grid was reinforced and in an attempt to delay restructuring
the power market.
Palestine’s distribution companies are the threat to solar energy. These
companies purchase power from Israel and make significant profits. Yet,
the cost of power from rooftop solar systems currently stands for the enduser at 10% less than electricity purchases, risking deflections from the
grid, and major revenue losses for the distribution companies.
Competing with Fossil Fuels
While the competition with the utilities is still nascent, the long history
of fuel imports has created vested interests across the value chain that
renewable energy threatens.
As these economies are not petroleum producers, there is no concrete
obvious internal pressure to maintain fossil fuels’ dominance. However,
alternative energy creates a wide set of winners and losers, with the latter
being led by the fossil fuel industry, casting no doubt that there is a sort
of competition, although not easily quantifiable.
Across the value chain, petroleum companies, fuel importers, and
distributors, among others, have been making hefty revenues from the
fuel dominance in quasi-monopolized economies. The key demonstration of the vested interests is the chronic lack of willingness to change the
electricity sector. Despite continuous discussions in Jordan to improve the
electricity sector, and deal with NEPCO fiscal deficit, the government has
not yet taken any serious efforts. Lebanon’s plans to switch to natural
gas date back to mid-2000s and have been formalized and adopted by
the Lebanese parliament through the 2010 policy paper for the electricity
sector, but have constantly been stalled. The plan included the implementation of one Floating Storage Regasification Unit (FSRU), a vital
component of LNG supply, but was changed in 2018 to three units to