Jessica Obeid, New Energy Consult
The energy sector mirrors political reality, especially in countries shaped by power-sharing or “Mouhasasa” political systems. Power sharing (Mouhasasa systems) such as in Lebanon and Iraq, are established as a deterrence to conflict. Yet, these systems typically end up hindering growth and reforms, including power sector reforms. Designed as conflict-prevention mechanisms, Mouhasasa systems, prevalent in Lebanon and Iraq, distribute political and institutional power across sectarian or ethnic groups to avoid dominance by a single faction and potential clashes. However, their practical outcomes often fall short and lead to recurrent political blockade, institutional paralysis and economic dysfunction, especially visible in the energy sector.
Centralised governance in these fragile contexts frequently proves inadequate, urging a shift toward decentralised, community-driven solutions. Lebanon and Iraq offer potent illustrations of how energy decentralisation can serve as a pathway to improved sector performance, if adequately managed.
Decentralised energy generation often flourishes due to incentives. However, policy and institutional failures have been witnessed to lead to a steep uptake in distributed renewable energy systems. Nowhere is this more evident than in Lebanon and Iraq.
Lebanon portrays this as its centralised national electricity utility has chronically struggled with power supply shortages, resulting in frequent blackouts and severe economic impacts. Reforms have been impossible for more than three decades due to political bickering and vested interests. Similarly in Iraq, despite investing billions of dollars, the country continues to endure daily power cuts as central governments’ attempt to reforms have not worked. Consequently, both countries have relied for decades on expensive and pollutant private diesel generators.
In 2019, Lebanon was hit by economic, financial, and political crises prompting a switch to rooftop solar systems. The power sector alone accounts for nearly half of the country’s public debt and is a primary contributor to its economic collapse. Post 2019, Lebanon’s declining foreign currency reserves restricted fuel imports, worsening the supply shortages from the electricity utility. Previously, neighborhood diesel generators served as temporary solutions to national electricity outages, albeit at high costs. However, diesel generators, designed as backup power supply, could not keep up with the skyrocketing demand. Citizens turned towards a second, more sustainable alternative to the national electricity utility; decentralised solar PV.
In Iraq, policy failure has prompted communities, municipalities, and even entire regions to install decentralised power generation, ranging from localised solar installations to hybrid systems combining renewables with backup generators. Communities, particularly in regions like Kurdistan and southern provinces, showcase that decentralised power infrastructure can effectively bypass political stalemates, providing essential energy security during times of national instability.
In these countries, energy decentralisation thus evolved from necessity into a reflection of its fragmented governance.
When power-sharing systems are adopted as a conflict deterrent, the causes for conflicts often remain, triggering long-term instability, or in the best-case scenario, non-durbale peace. As such, conflicts remain in the horizon and have to be accounted for. To address this, decentralisation also emerges as a strategic pathway to provide reliable electricity precisely when it is most vulnerable; during conflicts. Decentralised energy systems have particularly proven their effectiveness in maintaining reliable electricity supply in conflict-prone regions. Centralised power grids, vulnerable to targeted attacks and sabotage, often become strategic liabilities during wars, rendering communities powerless and amplifying humanitarian crises. In both Lebanon and Iraq, decentralised energy solutions, ranging from diesel generators to renewable solar photovoltaic systems, have stood out as resilient alternatives during wars.
Solar PV systems offer additional strategic advantages during conflicts by significantly reducing reliance on fuel logistics and supply chains. In fact, decentralised renewable energy systems generate electricity locally and therefore mitigate logistical vulnerabilities associated with transporting fuel through conflict zones. This highlights that decentralised energy systems not only enhance resilience but are fundamental to ensuring energy security and basic service continuity amid instability and conflict.
While Lebanon and Iraq illustrate the promise of decentralised energy solutions, caution is necessary. Decentralisation in energy governance mirrors political decentralisation and may exacerbate existing divisions and vulnerabilities, if not strategically managed.
When the decentralised energy systems are massively deployed due to policy and institutional failures, the market may develop without solid regulation, standardisation, or consumer awareness or protection rights. Thus, the market can become a target of low-quality components and low-quality installations. This has been recorded in Lebanon in the past few years. Additionally, Bosnia and Herzegovina warns us of the dangers posed by overly fragmented energy governance. The decentralised entity-based system has frequently prevented effective national-level energy, causing inefficiencies and stagnation.
However, structured political decentralisation, when coupled with coordinated national oversight, can lead to coherent energy strategies.
Energy decentralisation emerging organically in Lebanon and Iraq highlights an essential lesson: governance structures deeply influence the efficacy of energy systems. For power-sharing democracies, embracing decentralisation in energy policy is not merely technically beneficial, but is also politically imperative. It offers a realistic pathway out of political paralysis and sector dysfunction.
Yet, decentralised systems demand adaptable governance models tailored explicitly for localised contexts, along with institutional flexibility, and comprehensive strategies aligning local empowerment with national integration. Failure to acknowledge these risks prolonging energy insecurity and undermining economic resilience.
Jessica Obeid is Founding Partner at New Energy Consult. She is an energy engineer and policy consultant with a track record spanning more than 15 years. Her extensive experience in engineering, think tanks, and consulting across Europe, the Middle East, and Africa uniquely positions her to contribute to the development of low-carbon energy systems.