The Hashemite Kingdom of Jordan is heavily dependent on oil imports from neighbouring countries to meet its energy requirements. The huge cost associated with energy imports creates a financial burden on the national economy and Jordan had to spend almost 20% of its GDP on the purchase of energy in 2008.
Electricity demand is growing rapidly, and the Jordanian government has been seeking ways to attract foreign investment to fund additional capacity. In 2008, the demand for electricity in Jordan was 2,260 MW, which is expected to rise to 5,770 MW by 2020. Therefore, provision of reliable and clean energy supply will play a vital role in Jordan’s economic growth.
In 2007, the Government unveiled an Energy Master Plan for the development of the energy sector, requiring an investment of more than $3 billion between the year 2007 and 2020. The major target of the Plan is to enhance the contribution of renewable energy in the energy mix to 7 percent by 2015 and upto 10 percent by 2020. Concerted efforts are underway to remove barriers to exploitation of renewable energy, particularly wind, solar and biomass.
Renewable Energy Scenario
Jordan has been a pioneer in renewable energy promotion in the Middle East with its first wind power pilot project in Al-Ibrahemiya as early as 1988. Systematic monitoring of the technological developments and implementation/execution of demonstration and pilot projects has been the hallmark of Jordan’s foray into clean energy sector. However, renewable energy remains largely untapped due to high cost associated with non-conventional energy resources and relatively cheap availability of oil and natural gas.
With high population growth rate, increase in industrial and commercial activities, high cost of imported energy fuels and higher GHGs emissions, supply of cheap and clean energy resources has become a challenge for the Government. Consequently, the need for implementing energy efficiency measures and exploring renewable energy technologies has emerged as a national priority.
Wind energy is feasible mainly in areas overlooking the Jordan Valley and Wadi Araba. Solar energy potential is also high since many parts of the country experience 300 to 320 days of full sunshine throughout the year. Biomass energy potential is also attractive in the form of urban wastes, organic industrial wastes and animal manure. With rapid technological advancements, other sources such as waste-to-energy, hydro power and geothermal energy are also realistic options.
Presently, Jordan has 1MW biogas plant that utilizes methane from biochemical decomposition of organic waste for electricity production. Expansions are underway to increase the total capacity to 5 MW. There are 2 MW wind farms at Hofa and Al‐Ibrahimiyah in the north working successfully. Moreover, there is an area of 1.35 million m2 of installed solar water heaters panels in Jordan, and a 150 KWh of installed photovoltaic power. In addition, there are 25 solar water heaters factories in Jordan which produce 4000 solar water heater annually.
Future plans include three wind parks with a total capacity of 125‐150 MW, and a hybrid Solar Power Plants (CSP) with a capacity of 100‐250 MW. 60% of the wind turbine parts in the wind parks are supposed to be provided by local wind turbine manufacturers. Meanwhile, private consortiums are looking to establish photovoltaic and concentrated solar power plants in the Ma’an area.
The €10-million ‘Capacity Building in Wind Energy and Concentrated Solar Power’ project, funded by the European Union, will support Jordan's National Energy Research Centre (NERC) to steer and facilitate the implementation of the Jordanian government's Renewable Energy Strategy 2007-2020 by installing a wind testing facility, as well as a pilot Concentrating Solar Power (CSP) plant.
Investment in Clean Energy
Jordan has tremendous wind, solar and biomass energy potential which can only be realized by large-scale investments. This transition from conventional fuels to renewable energy resources will require capital investments, technology transfer and human resources development, through a package of investments estimated at US $ 1.4 – 2.2 billion. The investment package includes Build-Operate-Transfer (BOT) deals for wind energy with a total capacity of 660 MW and solar energy plants of 600 MW. This will be paralleled with the reduction of energy produced from oil from 58% currently to 40% in 2020. The Ministry of Planning and International Cooperation (MOPIC) is actively seeking support for renewable energy and energy efficiency initiatives through continuous cooperation with international partners and donors.
The best prospects for electricity generation in Jordan are as Independent Power Producers (IPPs). This creates tremendous opportunities for foreign investors interested in investing in electricity generation ventures. Keeping in view the renewed interest in renewable energy, there is a huge potential for international technology companies to enter the Jordan market. There is very good demand for wind energy equipments, solar power units and waste-to-energy systems which can be capitalized by technology providers and investment groups.
The government has also established a new Energy Fund to support the infrastructure development of new renewable energy facilities. In addition the government is seeking to provide tax incentives to remove the barriers for the comprehensive use of energy efficiency and renewable energy technologies in the Jordanian market.
The strategy will be supported by a "Renewable Energy Law" which includes regulations and incentives for renewable energy production from investments in areas designated to be utilized to build renewable energy facilities. The law provides investors with a lot of incentives including 100 percent exemption from income tax for 10 years.
Private companies with renewable energy projects will now be able to negotiate directly with the Energy Ministry as part of a series of changes to the sector. Investments in renewable energy will be quicker as part of sweeping changes included in the recently endorsed Renewable Energy Law.
One of the major components of the legislation allows local and international companies to bypass a competitive bidding process and negotiate with the ministry directly to establish renewable energy projects. Also under the law, the National Electric Power Company (NEPCO) will be obligated to purchase any and all electricity produced by renewable energy power plants. The law will also allow citizens with solar power or wind turbines to sell electricity back to their electricity provider.
There has been significant progress in the implementation of clean energy systems in Jordan, with active support from the government and increasing awareness among the local population. In the recent past, Jordan has witnessed a surge in initiatives to generate power from renewable resources with financial and technical backing from the government, international agencies and foreign donors. Jordan has the potential to become a regional energy hub characterised by political as well as economic stability. The already accomplished projects and studies in this field has provided Jordan with scientific and practical experience, qualifying it for entering a new phase of renewable energy development by means of cooperation between local institutions and foreign companies.