Syria faces annual demand for electricity growing at around nine per cent. It also must replace much of its oil fired power generation to preserve valuable oil reserves.
Syria is one of several countries that lays claim to being the cradle of civilization. Certainly its capital Damascus is regarded as one of the oldest inhabited cities in the world and the people of that region have passed on their influence to other cultures and nations around the world. Despite periods of political instability and trade sanctions, economic activity in Syria has been increasing and the demand for energy has nearly tripled in the last three decades.
The population of Syria is around 17.4 million with the majority of Syrians living by the Mediterranean coast where the largest cities are sited. As a consequence the electrical load requirements are concentrated along this eastern side of the country. Since 1965 the responsibility for electricity production and distribution in Syria has rested with the government on a monopoly basis. In 1994 two main authorities were created, the Public Establishment for Electricity Generation and Transmission (PEEGT) and the Public Establishment for Distribution and Exploitation of Electrical Energy (PEDEEE).
PEEGT is responsible for transmission of electricity at the 230 kV and 400 kV level and supplies consumers at 230 kV. It also controls exchange of electricity through interconnections with neighbouring countries and provides electricity to PEDEEE. A separate public entity, the General Establishment for the Euphrates Dam, operates three hydroelectric plants that are connected to the grid providing about nine per cent of the country’s total electricity production. The Ministry of Petroleum also operates power plants at various refineries and oil fields supplying around four per cent.
Running on empty
Fossil fuel is the mainstay of Syria’s power industry with oil and gas accounting for 86 per cent of generation. The remaining 14 per cent comes from the country’s hydropower resources mainly on the Euphrates River. Figures available for 2002 show that of the installed capacity of 7014 MW, 3636 MW was steam generation, 1250 MW gas turbines, 600 MW combined cycle and 1528 MW hydropower.
The heavy use of oil in steam generation has meant diverting significant amounts of Syria’s high-quality light crude oil to internal use at the expense of valuable export earnings. This was sustainable while Syria was producing an average of 600 000 barrels a day and consuming 200 000. But Syria’s own oil resources are fast running out and the country fears the prospect of becoming a net oil importer The foreign exchange earned from oil exports has effectively subsidized the Syrian economy and ensured a healthy supply of cash to the ruling Baathist regime. The last few years have seen oil production fall to an estimated 410 000 barrels/day in 2004, while at the same time domestic oil consumption has been rising, probably topping 300 000 barrels/day in 2004.
Syria hopes to reverse the trend toward declining oil exports. It plans to achieve this through a two-pronged approach of intensifying oil exploration and production efforts as well as reducing the consumption of oil used in power generation through increased gas fired power generation. The government is focusing on developing its non-associated gas reserves to free up more of its crude oil production for export. New power plant capacity in Syria is being built on a combined cycle basis in order to add capacity quickly and increase the use of natural gas.
Coping with growth
In common with many other Middle Eastern countries, Syria is faced with rapidly increasing demands for electricity driven by population growth and increasing economic activity and industrial demand. Syria has a high level of growth and is seeing demand for electricity running at an annual rate of nine per cent. This is expected to increase to ten per cent in the coming years. The country currently has an installed capacity of around 7600 MW and by 2010 the PEEGT plans to add a further 3000 MW to the system, as set out in its Master Plan Study.
Figure 1. The trends in Syrian electrical peak load based on three possible PEEGT scenarios
Such a trend and building programme calls for considerable investment in the power sector if electricity shortfalls are to be avoided and the Syrian Ministry of Electricity has responded by launching an ambitious plan to invest heavily in power generation and distribution. Although PEEGT is promoting the use of natural gas instead of oil as a fuel it does plan to rehabilitate some of the steam turbine plants. It plans to convert existing gas turbine plants from open to combined cycle as in the cases of the plants at Tishreen, Al-Nasrieh and Zezoun, which has added 400 MW. It will also increase the power system capacity with new gas fired combined cycle plants.
In addition, PEEGT plans to upgrade the existing electricity network to the required standard so that Syria can participate in the Arab Electrical Network Project. The size of investment in the electricity sector in Syria over the next 20 years is expected to exceed $10 billion. Syria has been able to secure European Union grants to assist with some of the investment needed in the power sector. These loans have been aimed at modernizing and improving efficiency within the sector, encouraging reforms and increasing competitiveness.
Figure 2. The planned EIJLST project will greatly improve Syria’s synchronous interconnec
Most of Syria’s hydropower resources are now exploited except from some pumped storage. During the 1980s Syria conducted a feasibility study along with the Soviet Union into the construction of a 1200 MW nuclear plant. The plan was dropped in the light of economic, political and military obstacles.
Other strategic alternatives such as power imports are being studied and since 1972 Syria has had interconnections (in an isolated mode) with both Lebanon and Jordan. In order to improve its synchronous interconnections Syria is participating in both the EIJLST interconnection project and the Medring, both of which will open up options in the area of power import/export. A $400 million project being financed by the Kuwait-based Arab fund for economic and social development to link the power grids of Syria, Egypt, Jordan, Lebanon, Turkey and Iraq should be finished by the end of 2006. The inter-Arab link will connect with European countries through Turkey and Greece.
Two major combined cycle power plant projects are currently underway in Syria. The Deir al-Zor and Deir Ali CCGT plants will in total add about 1500 MW when commissioned in 2007.
The announcement by PEEGT of the preferred bidder on the 750 MW project at the Euphrates city of Deir al-Zor is imminent. Three EPC bid proposals are being considered from a German joint venture (JV) of Siemens and Koch, Canada’s SNC Lavalin and a Spanish/Polish JV of Iberdrola and Alstom Poland. Germany’s MVV Energie is the technical consultant on the project. The European Investment Bank (EIB) has granted a g200 million ($236 million) loan towards the construction of the plant. The Islamic Development Bank will contribute g86 million ($102 million) and Kuwait-based Arab Fund for Economic & Social Development is lending g80 million ($94.5 million). PEEGT will provide the rest of the funding.
The German JV of Siemens and Koch has begun construction of the 750 MW combined cycle power plant at Deir Ali for PEEGT following the award of the $522 million engineering, procurement and construction (EPC) contract in September 2005. The estimated 30-month contract includes the supply and installation of two 250 MW gas turbines and a 250 MW steam turbine. The EIB is providing g200 million ($263 million) and the Arab Fund for Economic & Social Development (AFESD) is providing $100 million of finance towards the project.
PEEGT is also carrying out feasibility studies for an estimated $400 million project to build a new 750 MW combined cycle power plant at Qattineh, near Homs, and adding 400 MW to the existing power plant at Banias, which has a capacity of 680 MW. Tenders are expected to be issued in 2006 for both plants.
Alternative power generation options such as renewable energy from wind and solar power have yet to become established on a commercial basis in Syria although a study of the country’s renewable resources has indicated that they offer considerable potential for the electricity sector. A solar wind station was built by the ministry of electricity in Adra near Damascus in 1979 and in 1984 the directorate of research at the ministry of electricity issued a primary evaluation of the overall wind energy potential in Syria in cooperation with the United Nations Development Programme.
In 2003 the ministry of electricity in co-operation with the United Nations Department of Economic and Social Affairs announced the outcome of a three-year study to develop wind and solar power in Syria and set about raising the $1.48 billion needed to implement the plan through to 2011. The plan projected the installation of a total of 800 MW of wind power capacity as well as 16 000 solar power units in 1000 villages. The ministry of electricity is planning to build a national centre for energy studies and research. This will assume all responsibility for activities related to development and use of renewable energy sources and energy efficiency improvements.
Although the Syrian electricity industry looks set to remain centrally controlled, its laws do allow for private investment from the domestic and foreign markets. Future power plants could be executed or operated on a joint venture basis or as Independent Power Plants (IPPs). This would reduce the burden on the government to finance projects through its own resources or using commercial loans.