Powering Recovery

Jon Alterman: Will Todman is a fellow here in the Middle East Program. You have heard him on Babel before as a participant. Now, he's a guest. He joined CSIS in 2016. He's focused on aid, sustainability, and displacement in the Middle East, with an emphasis on the Levant. He’s done field research in nine different countries, including several for this report. Will, welcome to Babel.

Will Todman: Thanks so much for having me, Jon.

Jon Alterman: You have a new report out—Powering Recovery: Reform, Reconstruction, and Renewables in Conflict-Affected States in the Arab World. What is it about?

Will Todman: It’s about what international actors can do to support the more reliable and affordable provision of electricity in conflict-affected states. Conflict-affected states aren't just states that are experiencing active conflict, but it includes those where conflict dynamics continue even after fighting has stopped. Lebanon and Iraq are countries that fit that category. I also looked at Yemen, and our colleague in the Middle East Program, Lubna Yousef, looked at Libya, too.

Jon Alterman: How did you hit on this idea of renewable energy in conflicted-affected states?

Will Todman: When I lived in Lebanon several years ago, I experienced power cuts every day—as all Lebanese residents do. There have been rolling power cuts for three hours every day for decades since the end of the Civil War. While there, I had heard of this mythical place called Zahlé. Zahlé is not actually a mythical place, but it’s a city in the Beqaa Valley that has 24/7 electricity. Something stuck with me about this one town. How did some people manage to produce their own electricity when the rest of the country suffered from three hours or more of power cuts per day? Now, the situation in Lebanon has gotten many times worse. Most Lebanese get a maximum of two hours of power from the state. But there are examples of people who have managed to come together at the community level and produce their own electricity. And often, those systems integrate renewables to some degree. Part of the reason for that is that renewables are now as affordable as traditional methods of generating electricity using diesel, because diesel costs go up in conflict-affected environments. This got me thinking: if local people are taking matters into their own hands and managing to produce more reliable, cheaper, cleaner electricity, then shouldn't we be learning from that? Shouldn't we be looking into what factors allowed them to navigate the complex political and economic environments and see if there are ways of scaling that up. So, I zoomed out and went beyond Lebanon, looking at Iraq, Yemen, and Libya as well. I really tried to focus on what role international actors have in electricity reconstruction and how learning from local examples might require a different approach altogether.

Jon Alterman: When you have a situation where there's only two hours of electricity provided by the state every day, how are people living? Where are people getting electricity from?

Will Todman: For people who can afford it, there are a whole network of private electricity providers, often at the neighborhood level. These are commonly neighborhood generators. You can have a subscription to these services, and they theoretically fill the gaps when there is no power from the state. The problem is that it’s really expensive, and as crises really tighten and the situation gets worse, fuel gets more expensive. As part of the research for this report, I spoke to people in rural parts of the Beqaa Valley in Lebanon, and they can’t afford to pay their generators anymore. They can’t afford to keep their food cool. They can't afford to turn the lights on. Simply charging a mobile phone costs the equivalent of an entire month’s salary from a Lebanese solider. Tiny amounts of electricity are absolutely extortionate, and quite frankly, it is still something of a mystery to me how people get by in the 21st century under those conditions. And of course, it exacerbates all the other humanitarian crises. If you don't have electricity, it cripples local economies. It really undermines education and healthcare systems as well. You can’t have lights on in schools. You can't print papers for students. You can't operate fans in clinics. It has dire humanitarian consequences.

Jon Alterman: But you've also talked and reported about how in all of these countries with broken electrical systems, there are people who are benefiting from broken electrical systems.

Will Todman: That’s the core of the problem—that uneven electricity provision actually benefits some people. If you have really unreliable electricity and you are in a position of power to be able to determine who gets electricity and who doesn't get it, then you can provide preferential access to constituents to secure their loyalty. You can help build coalitions by providing it to members of the private sector who might be a helpful source of support. You can also then undermine your rivals. You can deliberately limit electricity to other rival groups, so electricity also becomes a weapon of war. But it's not only about these political elites providing some electricity to certain people and denying it from others. It's also about the fact that they benefit from these informal systems that crop up. The generator owners that I talked about often have close ties to local political leaders, and they often have ties to national political leaders as well. Those political leaders get a cut of their proceeds to allow these generators to have a monopoly in a given area, so these networks of graft are really entrenched in a lot of these situations. It's not just Lebanon. It's in Iraq as well. It’s in Libya to a degree as well, where politicians actually make money from electricity crises.

Jon Alterman: The United States put a lot of money into reconstructing Iraq. Why was the United States not able to move beyond a system that seems to reward both political graft and corruption, but also poor electricity?

Will Todman: I would argue that they fundamentally underestimated the degree to which powerful actors have an incentive to ensure that some of these projects that they funded fail. They also failed to understand the interests of these actors in pushing for certain interventions over others. So, you said that the United States spent billions of dollars in Iraq. The United States spent more than $5 billion on electricity infrastructure in Iraq. A lot of that money was for major multimillion dollar power stations which are an easier way for them to operate. They can work out a single contract. They have to engage with fewer people. And theoretically, the impact of these really big power stations is huge. In one single contract, they can provide electricity to hundreds of thousands, if not millions of people. The problem though—especially if you're living in an area with ongoing fragility—is that those very big, centralized pieces of infrastructure then become attractive targets. The Baiji power station in Iraq is a prominent example of this phenomenon. Siemens built the Baiji plant to the north of Baghdad, and shortly after it went online, the Islamic State Group (ISG) destroyed it. The plant and its destruction wasted hundreds of millions of dollars—all gone in one fell swoop. I argue that this strategy which donors have advanced creates serious fragilities and serious single points of failure in the system that then have devastating consequences.

Jon Alterman: So, what are the advantages of renewable systems? And where do renewable systems just not work in post-conflict environments?

Will Todman: There are different types of renewable systems. Some are major pieces of infrastructure, like utility-scale wind or solar farms. They’re better for the environment. They’re getting cost competitive with major hydrocarbon-fueled power stations. But they’re not appropriate for lots of environments because donors are wary of funding these massive projects when fighting is ongoing because it could be destroyed. But what I think makes renewables different is that you can have distributed renewable systems—a decentralized system where there are much smaller producers, like solar farms for example, at the community level. There are loads of advantages for those systems in conflict-affected environments. First, they’re much smaller, so if they are destroyed, the impact is going to be more isolated and fewer people will suffer the consequences. It actually reduces losses as well because the power is produced closer to where it’s consumed, so the targets for malign actors to attack are smaller. That reduces technical losses as well. It also really reduces the reliance on regular fuel imports. This is really important because for hydrocarbon-fueled power stations, you constantly need fuel to operate the system. But during conflicts, it can be really difficult to import the fuel and then get it to these stations. With distributed renewable systems, you don’t need that anymore. Of course, there are the environmental benefits as well. There are health benefits because there are less toxic fumes. What I argue in the report is that by building these systems, donors can actually act a lot earlier than they otherwise could. They can install these systems while fighting is ongoing in other parts of the country. We've seen this in Yemen. Less than 30 miles from the frontline, there are really successful local mini grids that have fueled economic development and helped combat humanitarian crises. It can be used to pump drinking water. It can be used to power medical facilities and schools. This approach allows donors to operate much sooner, and then save them money in the longer term.

Jon Alterman: Your study, though, found that in most cases renewables wouldn't work. You had four case studies, and three of them did not seem especially auspicious for renewables. As a donor looks at the opportunity for renewables, when do renewables work the best? And what kinds of factors make them unlikely to work?

Will Todman: Part of this comes down to economics, and part of this comes down to the social contract. On the economic side, if the governments are able to fund very generous fuel and energy subsidies, then renewables will always be more expensive. In places like Iraq and Libya, where the government spends vast amounts of money subsidizing fuel and energy for its people, then it's much less cost-competitive for renewables because it's cheaper to operate the local diesel-based generators that I mentioned. The other piece of this is the social contract. I spoke to Iraqis in Baghdad who said to me, "We live in a country with the fifth-largest proven oil reserves in the world. Why on earth should we have to invest in renewable energy when the government has all of this that it should be providing for us?" So part of this is about what people expect from their governments, and when they feel like it's in their interest to invest at the individual level, or at the community level, to compensate for government services. Often, conflicts actually shift these patterns, though. In Yemen and Lebanon, crises have forced the government to lift subsidies, which, suddenly makes renewables much more economically competitive. That’s why we have seen the massive flourishing of solar panels in Yemen and Lebanon. The other reason why renewables can't work in some cases is that these actors that I mentioned earlier who have vested interests in the status quo—particularly political elites who are making a lot of money from the current system, even if or because it’s dysfunctional. Because it is uneven and forces people to rely on expensive measures, they benefit from the system. So, then you have these actors who are making huge amounts of money and do not want to see their profits undermined, and they are the ones who are responsible for implementing new policies that could allow for the flourishing of renewables. When that’s the case, that change is not going to happen. Iraqi and Libya are the key examples of that, but Lebanon also has deeply entrenched interests at the central level, where people don't want more accountability. They don't want more competition in the electricity sector. One example of that is that Lebanon’s parliament passed a law in 2002 which called for an independent regulator for the electricity sector. It's now more than 20 years later and none of the many governments that have taken office since have actually implemented the law. Why? Because they don't want more accountability in the electricity sector. I think certain powerful individuals are very happy with the way things are at the moment, and they don't want to see more competition.

Jon Alterman: That shows the argument to come in earlier, which you say the smaller more distributed systems allows you to do. You come in earlier so you don’t have these patterns set up in the first place.

Will Todman: Exactly. I argue that there is a window of opportunity to act and to set these societies on a pathway of greater environment sustainability and better governance. If you can get in earlier while things are still in flux, before some of these actors have really been able to dig their claws in and entrench their power in the status quo, then that's when you can act. You said that of the four cases, the only real source of optimism is in Yemen. I agree that Yemen is a good example where I believe donors should be looking to fund the much broader uptake of community-scale renewable infrastructure. I would also argue that there is a silver lining in Lebanon's current collapse as it relates to electricity because people are already investing at the community level. Donors should try to highlight these successful community-scale efforts much more than they do now. They should be experimenting more with different types of systems to see what works in the local context. Sometimes, we see that this is happening. The U.S. Agency for International Development (USAID) is funding a project called INARA, which stands for Innovation for Affordable and Renewable Energy for All. That program is working at the local level in Lebanon to support municipality level projects and clusters of municipalities. I would love to see other donors as well adopt the same approach to band together and to try to unlock greater amounts of international financing. Climate financing, in particular, is really underutilized in these contexts. I think they can show people who live in these contexts that a better path is possible. And acting earlier spurs local economic development. It spurs job creation. It helps with peacebuilding, sometimes between communities that may have otherwise competed for limited access to electricity. And it can set these societies on a much more promising pathway forward. So, even though the challenges are huge, and circumstances are really dire, there is actually opportunity amid all of this, and I believe that you can use renewable energy to power recovery, which is in the title of the report.

Jon Alterman: So, when they are looking at a conflict-affected environment, what's the process that donors should go through to decide, "Is this appropriate for the more conventional approaches to providing electricity? Or should we give Todman's idea a try?"

Will Todman: Well, I’d argue that my report does have some recommendations for the central level as well, but essentially, what donors should do is try to work out what they can do at the central level—working directly with the government or ruling authorities. And what can they do at the local level? They need to answer two main questions. What is the capacity of central authorities? Do they have the ability to enact reforms and to take on big projects? Do they have the human capacity? Are their staff still there or have they been displaced? The second question they have to ask is to what degree do actors, political and economic actors, benefit from the status quo? To what extent are these vested interests in dysfunction entrenched? At the end of the report, I actually lay out a series of questions that donors should ask. And I've got a table, which lays out four different categories according to those assessments. If you have a government with a strong capacity and really limited vested interests in the status quo, then that is the ideal situation. In this situation, you can be thinking about advancing legislation that would allow for distributed renewable systems, but also about advancing much larger utility-scale systems. You can also work with a government on some repairs to the existing grid that make sense and that would benefit a lot of people. On the most restrictive end of the scale, you have a government that actually has a lot of capacity, but where there are also very entrenched interests in the status quo. That would be Iraq or Libya, from the cases that we looked at. It is very difficult to intervene and to have a positive impact in a place like that. In those places, I argue that more can be done to try to shift the culture around renewable energy—highlighting success stories where they exist, working with communities, particularly rural communities, that may benefit from solar-powered irrigation systems and things like that. You can do that, but, ultimately, you shouldn't be putting a lot of funding into these situations because, sadly, actors who seek to cause these efforts to fail will attack them, destroy them, and undermine them—militarily, legislatively, and using whatever tools they have at their ability to ensure the continuity of the status quo. On the level in-between those cases, you have a situation where government maybe doesn't have much capacity, but also there aren't many vested interests. That’s a scenario when you can try and go to the local level, highlight these successful cases, encourage experimentation with different systems, and try to attract funding from other donors and from the private sector or climate finance mechanism to really scale those efforts up so you can set societies on a more promising pathway forward.

Jon Alterman: Will Todman, author of the new report, Powering Recovery, thanks for joining us on Babel.

Will Todman: Thanks so much, Jon.