Renewable Energy Investment in Jordan

Jordan has tremendous wind, solar and biomass energy potential which can only be realized by large-scale investments. In 2007, the Government of Jordan developed an integrated and comprehensive Energy Master Plan. Renewable energy accounted for only 1% of the energy consumption in Jordan in 2007. However, ambitious targets have been set in the Master Plan to raise the share to 7% in 2015 and 10% in 2020. 

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.

As most of the clean energy technologies require high capital cost, investments in wind, solar and waste-to-energy plants will be possible only with appropriate support from the Government. Notably, the Government has expressed its readiness to provide necessary support within the framework of available resources. The Ministry of Planning and International Cooperation (MOPIC), is responsible for coordinating and directing developmental efforts in coordination with the public and private sectors, and civil society organizations. MOPIC is actively seeking support for renewable energy and energy efficiency initiatives through continuous cooperation with international partners and donors.

Jordan has significant strengths in the form of renewable energy resources, a developed electricity grid, strong legal and intellectual property protections, a market-friendly economy and a skilled workforce. So it is well positioned to participate in the expanding cleantech industry. 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.

Jordan enacted a Renewable Energy Law in 2010 which provides for legislative framework for the cleantech sector. The main aim of the law is to facilitate domestic and international projects and streamline the investment process.  The Law permits and encourages the exploitation of renewable energy sources at any geographical location in the Kingdom. In April 2012, the Ministry of Energy and Mineral Resources announced that it has qualified 34 international and local companies for investment in renewable energy projects, with an overall capacity reaching 1000 MW. Of the qualified companies, 22 companies will invest in solar power projects and the rest in wind energy.

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 from around the world.

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Energy Perspectives for Jordan

The Hashemite Kingdom of Jordan is an emerging and stable economy in the Middle East. Jordan has almost no indigenous energy resources as domestic natural gas covers merely 3% of the Kingdom’s energy needs. The country is dependent on oil imports from neighbouring countries to meet its energy requirements. Energy import costs create a financial burden on the national economy and Jordan had to spend almost 20% of its GDP on the purchase of energy in 2008.

In Jordan, electricity is mainly generated by burning imported natural gas and oil. The price of electricity for Jordanians is dependent on price of oil in the world market, and this has been responsible for the continuous increase in electricity cost due to volatile oil prices in recent years. Due to fast economic growth, rapid industrial development and increasing population, energy demand is expected to increase by at least 50 percent over the next 20 years.

Therefore, the provision of reliable and cheap energy supply will play a vital role in Jordan’s economic growth. 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 2260 MW, which is expected to rise to 5770 MW by 2020.

In 2007, the Government unveiled an Energy Master Plan for the development of the energy sector requiring an investment of more than $3 billion during 2007 – 2020. Some ambitious objectives were fixed: heating half of the required hot water on solar energy by the year 2020; increasing energy efficiency and savings by 20% by the year 2020, while 7% of the energy mix should originate from renewable sources by 2015, and should rise to 10% by 2020. 

Concerted efforts are underway to remove barriers to exploitation of renewable energy, particularly wind, solar and biomass. There has been significant progress in the implementation of sustainable energy systems in the last few years to the active support from the government and increasing awareness among the local population.

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.  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. 

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.

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Clean Energy Resources in Jordan

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.

Government Initiatives

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. 

Conclusion

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. 

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Renewable Energy in Jordan

Renewable energy systems have been used in Jordan since early 1970s. Infact, 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. 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. 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. 

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 between 300 and 320 days of full sunshine throughout the year, it also lies within the solar belt of the world. 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.

Currently, Jordan is looking at having 10% of its energy mix generated from renewable energy sources by the year 2020. Thus, the country is implementing a plan to generate 600MW of wind energy, and 600MW of solar energy to reach this target. It is to be mentioned that Jordan’s renewable energy potential is certainly higher than this target, which may led to the possibility of exporting surplus renewable power within the region and beyond.

Solar Energy

The solar energy potential in Jordan is enormous as it lies within the solar belt of the world with average solar radiation ranging between 5 and 7KWh/m2, which implies a potential of at least 1000GWh per year annually. Solar energy, like other forms of renewable energy, remains underutilized in Jordan. Decentralized photovoltaic units in rural and remote villages are currently used for lighting, water pumping and other social services (1000KW of peak capacity). In addition, about 15% of all households are equipped with solar water heating systems. Recently, a solar pond for potash production was built in the Dead Sea area.

Jordan has major plans for increasing the use of solar energy. As per the Energy Master Plan, 30 percent of all households are expected to be equipped with solar water heating system by the year 2020. The Government is hoping to construct the first Concentrated Solar Power (CSP) demonstration project in the short to medium term and is considering Aqaba and the south-eastern region for this purpose. It is also planning to have solar desalination plant. According to the national strategy the planned installed capacity will amount to 300MW – 600MW (CSP, PV and hybrid power plants) by 2020.

Wind Energy

Wind energy resources are abundant and can cover a significant amount of Jordan’s energy requirement if implemented properly. Jordan has an ambitious program in wind energy development, where about 600MW of wind turbines are to be installed by the year 2015 which is to be doubled by 2020.

There are a number of places known by their high wind speed (greater than 5 metre per second) and long windy times, such as Jordan Valley and Wadi Araba. The existing wind farms in Hofa and Al-Ibrahemiya are good examples of successful wind energy projects. These farms are connected to the national grid and characterized by a high availability and excellent capacity factors. Currently, there is a plan for three wind farms with maximum capacity of 300MW each, distributed among three sites in the northern and southern regions of Jordan.

Biomass Energy

Municipal solid wastes represent the best source of biomass in Jordan. The per capita of waste generated in Jordan is about 0.9 kg/day. The total generation of municipal waste in Jordan is estimated at 1.84 million tons per year. The main resources of organic waste in Jordan that can be potentially used to produce biogas are summarized as follows:

  • Municipal waste from big cities
  • Organic wastes from slaughterhouse, vegetable market, hotels and restaurants.
  • Organic waste from agro-industries
  • Animal manure, mainly from cows and chickens.
  • Sewage sludge and septic.
  • Olive mills.
  • Organic industrial waste

According to a study conducted by the Greater Amman Municipality, around 1.5 million tonnes of organic waste was generated in Jordan in 2009. In addition, an annual amount of 1.83 million cubic meter of septic and sewage sludge from treatment of 44 million cubic meter of sewage water is generated in greater Amman area. The potential annual sewage sludge and septic generated in Amman can be estimated at 85,000 tons of dry matter.

The Government of Jordan, in collaboration with UNDP, GEF and the Danish Government, established 1MW Biomethanation plant at Rusaifeh landfill near Amman in 1999.  The Plant has been successfully operating since its commissioning and efforts are underway to increase its capacity to 5MW. Infact, the project has achieved net yearly profit from electricity sale of about US $ 100, 000.  The project consists of a system of twelve landfill gas wells and an anaerobic digestion plant based on 60 tons per day of organic wastes from hotels, restaurants and slaughterhouses in Amman. The successful installation of the biogas project has made it a role model in the entire region and several big cities are striving to replicate the model.