Jordan Energy Situation
Overview
| Hashemite Kingdom of Jordan | |||
| |
| ||
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Capital |
Amman (31°57′N 35°56′E) | ||
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Official language(s) |
Arabic | ||
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Government |
Constitutional monarch | ||
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King of Jordan |
Abdullah II | ||
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Prime Minister |
Marouf al-Bakhit | ||
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Total area |
92,300 km2 | ||
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Population |
6,407,085 (2010 estimate) | ||
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GDP (nominal) |
$99.129 billion | ||
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GDP Per capita |
$4,435 | ||
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Currency |
Jordanian dinar (JOD) | ||
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Time zone |
UTC+01 | ||
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Calling code |
+962 | ||
Energy Market
Overview Energy Market
Since 1967, the Jordan Electricity Authority (JEA) has been responsible for the generation and transmission of electrical energy throughout Jordan. In those regions whose power supplies were provided by neither of the two power distributors with a concession to supply end customers (JEPCo and IDECo), it was the JEA that also held responsibility for distributing power to end customers.
A lack of financial and administrative independence, autonomy and free-market orientation, as well as an inadequate tariff structure, led to a number of problems. Investment decisions were taken by a government commission and not in accordance with commercial criteria. Personnel policy was dictated by state targets, which did not meet the needs of the electricity sector. Moreover, the state’s tariff policy resulted in annual losses, because the electricity prices were too low to cover costs. At the same time, the tariff structure fostered considerable cross-subsidisation between various customer groups. In turn, these subsidies sent out the wrong price signals and led to distortions in the electricity market.
The rapid growth in the demand for power every year meant large-scale investments were necessary to expand the number of power stations and the power grid. The level of these investments, however, would have been a very heavy burden for the Jordanian national budget alone.
The Electricity Grid
| Power line ratings |
2000 |
2005 |
| km | ||
| 400 kV |
809 |
871 |
| 230 kV |
17 |
17 |
| 132 kV |
2200 |
2512 |
| 66 kV |
17 |
17 |
The Jordanian national interconnected grid transmits electricity from the power stations to the distribution substations and transformer substations in the various regions of the kingdom via 400-kV and 132-kV power lines. The star topography of the grid has a clearly identifiable north-south axis, along which the only 400-kV power line runs, from Aqaba in the south via Amman and up to the Syrian border. The only area in which the grid has a ring-shaped configuration is around the capital city.
In the north, the power grid is connected to the Syrian grid by means of a 230-kV and a 400-kV power line. In the south, there is a 400-kV connection to the Egyptian grid. The interconnected grid feeds the local distribution systems via which almost the entire population of Jordan receives its electricity. The overall length of the installed high voltage power lines (132 kV and 400 kV) is around 3,400 km.
The following table shows the level of expansion of Jordan’s transmission network in 2000 and 2005.
Installed Capacity
In 2005 the Jordanian interconnected power grid was supplied by an installed power station capacity of 1,873 MW. Compared with the previous year (1,643 MW), this was a capacity increase of 14%. The total power station capacity available nationwide, including the agreed import capacities, amounted to 2,019 MW in the same year. In addition to the power stations operated by the two state-dominated power producers, there are also a number of industrial enterprises that generate electricity in their own plants. Some of these also feed excess electricity into the Jordanian interconnected grid. Apart from these power sources, additional capacity can be called up when required from the Egyptian and Syrian grids. The four largest power stations are the station in Aqaba (656-MW steam power plant), the Hussein power station in Zarqa (396-MW steam power plant), the plant in Rehab (353-MW diesel-fired gas turbine) and a new combined-cycle power plant in Al-Risha.
| 2001 |
2002 |
2003 |
2004 |
2005 | |
| MW | |||||
| Steam power plants |
1013 |
1013 |
1013 |
1013 |
1013 |
| Diesel generators |
43 |
43 |
43 |
43 |
43 |
| Gas turbine (diesel) |
353 |
353 |
353 |
353 |
353 |
| Gas turbine (natural gas) |
120 |
120 |
120 |
120 |
120 |
| Combined-cycle power station (CCPS) |
300 | ||||
| Hydropower |
10 |
12 |
12 |
12 |
12 |
| Wind |
1.4 |
1.4 |
1.4 |
1.4 |
1.4 |
| Biogas |
1 |
1 |
1 |
1 |
1 |
| Installed capacity (total) |
1541 |
1643 |
1643 |
1643 |
1873 |
| Available capacity, incl. imports |
n.a |
1788 |
1788 |
1789 |
2019 |
Source: NEPCo
Electricity Generation
Of the roughly 9,650 GWh of electricity generated in Jordan in 2005, 82.5% came from steam power plants. 6.7% was generated in gas-turbine power stations fired with natural gas and a further 3.5% came from dieselfired power stations and diesel generators. Just under 6% was generated at what is to date the country’s only combined-cycle power plant located in Al-Risha.
Renewable energy sources account for only a minimal share of the electricity generated. In 2005, just 0.6% (57 GWh) of the electricity generated was sourced from hydropower. Biogas (5 GWh) and wind power (3 GWh) each accounted for less than 0.1%. The amount of electricity generated throughout the country by diesel generators (73 GWh or 0.7%) exceeds that generated from hydro, wind and biogas together (65 GWh).
| 2001 |
2002 |
2003 |
2004 |
2005 | |
| GWh | |||||
| Electricity sector |
7144 |
7630 |
7489 |
8471 |
9138 |
|
6240 |
6771 |
6430 |
7168 |
7524 |
|
1 |
3 |
1 |
1 |
2 |
|
83 |
115 |
262 |
464 |
341 |
|
769 |
680 |
746 |
776 |
648 |
|
558 | ||||
|
43 |
53 |
41 |
53 |
57 |
|
3 |
3 |
3 |
3 |
3 |
|
5 |
5 |
6 |
6 |
5 |
| Industrial sector |
405 |
502 |
505 |
496 |
516 |
|
364 |
434 |
428 |
422 |
445 |
|
41 |
68 |
77 |
74 |
71 |
| Total |
7549 |
8132 |
7994 |
8967 |
9654 |
Source: NEPCo
Since the amount of electricity generated in Jordan has for some years been insufficient to cover the country’s needs, additional power is imported from Egypt and Syria. In 2005, 982 GWh was bought in, which was a good 9% of the electricity available in Jordan overall. Inside the country itself, electricity is generated by the two state-owned power producers, CEGCo and SEPGCo, by industrial self-generators and industrial enterprises.
Electricity Prices
In June 2002, electricity tariffs in Jordan were raised slightly for the first time since May 1996. 2003 and 2004 saw further moderate price increases. The last adjustment of tariffs took place in July 2005. The price structure is divided roughly into two segments: major customers (large power users) and end customers. The major customers grouping – which, in addition to industrial enterprises, also includes local power providers – pay a demand charge for every kilowatt of their maximum consumption. On top of this is a kilowatt-hour rate, which is lower at night than during the day.
The tariffs for end customers make a distinction between commercial customers and private households. The price of electricity for households rises progressively with the amount of electricity consumed. The two groups of end customers pay two different minimum monthly payments: for households 1.10 euro, for commercial customers 1.37 euro.
| 1996-2002 |
2002-2003 |
since 2005 | |
| Major customers | |||
| Power providers | |||
|
2.63 |
2.63 |
2.63 |
|
0.032 |
0.034 |
0.037 |
|
0.021 |
0.023 |
0.026 |
| Large-scale industry | |||
|
2.63 |
2.63 |
2.63 |
|
0.052 |
0.053 |
0.053 |
|
0.035 |
0.035 |
0.035 |
|
End customers (excl. major customers) | |||
| Private households | |||
|
0.033 |
0.034 |
0.034 |
|
0.057 |
0.060 |
0.065 |
|
0.066 |
0.070 |
0.073 |
|
0.082 |
0.088 |
0.090 |
| Trades and crafts |
0.066 |
0.068 |
0.069 |
| Light industry |
0.040 |
0.042 |
0.045 |
| Hotels |
0.066 |
0.066 |
0.066 |
| Water pumps |
0.037 |
0.042 |
0.044 |
| Street lighting |
0.022 |
0.027 |
0.033 |
Source: NEPCo
Rural Electrification
The well developed supply network in the country also supplies a large proportion of the population in rural regions with electricity. There are now only a few remote settlements that still do not enjoy the benefits of a grid connection.
The Rural Electrification Project (REP) is a department of the Ministry of Energy and Mineral Resources and was set up in 1992. At that time, the Government had decided to introduce an additional charge of 0.11 euro cents (1 fils) on every kilowatt-hour consumed. In 1997, this charge was increased to 0.22 euro cents (2 fils). The money levied through this charge is being used for rural electrification.
A programme aimed at promoting the provision of power to those people who live in remote regions far from the national power grid with the aid of PV systems has been running since 2002. In particular, low-income population groups living in the countryside are to be given access to electricity through this programme. Within the scope of this programme, nine PV systems (solar home systems) have been installed in a small village, which are used to provide lighting and power radios and televisions in the households taking part.
Market Actors
In view of the annually increasing demand for electricity and the central role of electricity supply for economic development as a whole, the Jordanian Government decided back in 1997 to embark on a restructuring of the sector. The main objective of this reform was to increase the efficiency and performance capability of Jordan’s electricity sector, a goal that was to be achieved by among other things opening up the country’s electricity market and enabling private investors to participate in the expansion of the power sector. In the course of these measures, the power generation, transmission and distribution segments went through a process of unbundling. In place of the state authority, JEA, which until then had borne responsibility at all levels, separate businesses were formed, each of which operates in just one area.
Power generating companies
Central Electricity Generating Company (CEGCo)
This joint stock company, which has existed in its present form since 1999, operates the majority of Jordan’s power stations. In 2005, 94% of the electricity generated inside Jordan came from CEGCo power stations. All of the electricity the company generates is sold to NEPCo, which, alongside the Jordanian Government that itself holds 75% of CEGCo’s shares, is the only other shareholder of the national power provider.
Samra Electric Power Generating Company (SEPGCo)
This joint stock company was founded in 2003 and is 100% owned by the Jordanian state. It is responsible for running the combined-cycle power station in Al-Risha. In 2005, the Ministry of Energy and Mineral Resources awarded SEPGCo the contact to build another 100-MW steam power plant. The Jordanian Government is planning to privatise the company as part of an international tendering process.
Power transmission companies
National Electric Power Company (NEPCo)
The national power company, National Electric Power Company (NEPCo), is a joint stock corporation whose capital is completely in the hands of the Jordanian state. It is responsible for expanding and operating the nationwide transmission network. NEPCo purchases the electricity from the producers as the sole buyer, in order to sell it on to the operators of the distribution networks. The company operates a national load-dispatching centre to coordinate the demand for and the supply of power.
Distribution companies
Jordan Electric Power Company (JEPCo)
In 2005, the distribution company supplied power to around 739,000 end customers in the four governorates Amman (capital), Zarqa, Madaba and Balqa. This added up to 4,793 GWh or 55% of the electricity consumed nationwide. The company was founded in 1947 as a joint stock company. The 50-year concession to generate and distribute electricity for the above-mentioned governorates, on which JEPCo’s business is based, is due to expire in 2012.
Irbid District Electricity Company (IDECo)
In 2005, this distribution company supplied power to around 251,000 customers in the four governorates Irbid, Mafraq, Jerash and Ajlun in the north of the country (1,210 GWh). Around 14% of the electricity consumed in Jordan was distributed to end customers via IDECo’s network. IDECo’s concession runs out sooner than JEPCo’s, in 2011. IDECo was established in 1961 as a privately owned power supply (distribution) company. So far, NEPCo still holds 55 % of the shares in the company, but it wants to sell these as part of a further phase of privatisation of the power supply sector.
Electricity Distribution Company (EDCo)
In those regions of the country for which neither JEPCo nor IDECo have a concession, end customers are supplied with their electricity by EDCo. In 2005 this amounted to 139,000 customers, receiving 1,427GWh or just over 16% of Jordan’s total consumption. EDCo came into being as a power supply company when the Jordanian electricity authority began to be unbundled. The company is state owned and is intended to be sold off within the scope of privatisation of the sector.
Market potential for renewable energies
The use in Jordan of renewable energy sources has until now been marginal, accounting for a share of less than 1% of electricity generation. Potentials for generating power from renewable energy resources in the country are to be found primarily in the areas of wind and solar energy.
Wind Energy
Wind power potential
Jordan has a number of regions that enjoy wind speeds suitable for generating electricity. Those regions with the greatest potential are located in the north and south of the country. Each region can be placed in one of three categories depending on the wind speeds that prevail: under 4 m/s, between 4 and 6 m/s and above 6 m/s. Particularly attractive locations in the third of these categories can be found in Hofa in the northwest of the country, in Fjeij near Shawbak (Shobak) and in Wadi Araba near Aqaba in the south.
Wind measurements
A wind atlas, which was drawn up by the Danish Risø research centre in cooperation with the Jordanian authorities, has been available for Jordan since 1989. According to information provided by the Ministry of Energy and Mineral Resources, this wind atlas is in the process of being updated with results taken from recent measurements. The Jordan Meteorological Department operates fifteen permanently installed weather stations, whose measurements cover wind speeds and directions and are made available online.
The Deutsche Gesellschaft für technische Zusammenarbeit (GTZ) has conducted its own wind measurements at two potential locations for wind farms (Aqaba and Shawbak) in Jordan and published the results of these studies at the end of 2001. Average wind speeds of more than 6.5 m/s at a height of 50 metres were measured at both of these sites. There has also been a CDM baseline study (conducted on behalf of GTZ) available since 2002 for a privately financed wind farm at Aqaba with a capacity of 25 MW. GTZ has also commissioned another study for the Shawbak location, which investigates the suitability of the facility planned for there with respect to the CDM. Here, too, the plans are for a privately financed 25-MW wind farm.
A Swiss company, interwind, has been conducting wind measurements at fourteen locations in rural regions of Jordan since June 2003. These studies are being carried out on behalf of a Canadian company, RSW International, and are aimed at determining the extent to which wind power is suitable for providing decentralised power supplies in rural regions. 50 metre-high masts are being used to take these measurements. The results of wind measurements conducted in Tafila were published in 2004. Average wind speeds of only 4.4 m/s were measured here.
Wind farms
So far, two wind farms have been built and come on stream in Jordan, both of which feed into the national grid. The first of these farms has a generating capacity of 320 kW (4 x 80 kW) and was constructed in 1998, in cooperation with a Danish company, in Ibrahimyya near Hofa, as a pilot project. The second was completed in 1996 in Hofa (financed with funds from the German Eldorado programme) and has a capacity of 1.2 MW (5 x 225 kW). Both wind farms are operated by CEGCo and together they generated around 3 GWh of electricity in 2005.
Expansion Plans
The Ministry of Energy and Mineral Resources has been searching since 2002 for investors for the two highly promising locations in Fjeij near Shawbak and Wadi Araba near Aqaba. The intention is for these projects to be built and operated by independent power producers (IPPs) on the basis of BOO (Build-Own-Operate) contracts. A wind farm with a capacity of 25 to 30 MW to be fed into the interconnected power grid is to be built at each of these two locations. The level of capital expenditure is estimated at US$ 60-70 million. The projects were put out to public tender in 2005, but have so far attracted no potential investor.
Solar Energy
Solar energy
Jordan is a very sunny country. Average daily solar irradiation is 5.5 kWh/m2, while the sun shines approximately 2,900 hours per annum. Despite this, apart from for heating water for some households, solar energy is scarcely being used.
Photovoltaics
According to the Jordanian Ministry of Environment, there is a multitude of potential applications – such as for supplying electricity to small settlements and tourist facilities, as well as in agriculture – in which, thanks to the high level of solar irradiation, PV systems could be employed as an economically viable alternative to connecting to the grid. Despite this, very little use is being made of photovoltaics in Jordan. Across the country, there are only around 100 PV systems installed as stand-alone systems in remote areas. These are used to power water pumps or supply electricity for telecommunication systems, schools and other facilities. All in all, these systems have a total capacity of 184 kWp.
Solar thermal energy
Jordan has a fully developed market for solar water heaters. The majority of solar systems in use function according to the thermosyphon principle and are manufactured locally by more than 20 companies. A typical system comprises three solar panels with a surface area of three to four square metres and storage tanks with a capacity of between 150 and 1,000 litres. Roughly a quarter of Jordanian homes (around 220,000 units) are fitted out with a solar thermal water heating system. According to estimates of the Ministry of Energy and Mineral Resources, the total surface area of solar panels in use in the country amounts to approximately 1 million square metres, a large proportion of which was installed back in the 1980s. Around 10,000 square metres are being added every year. A national plan to further develop solar thermal energy – which has been formulated within the framework of the Euro-Mediterranean Partnership (MEDA Programme) – envisages an annual increase in new solar panels installed of 44,000 square metres. Included in this plan is the increased use in future of solar thermal energy to assist in the heating of buildings.
Hydropower
Jordan has no notable bodies of flowing water suitable for the construction of hydroelectric power stations. The only such plant is at the King Talal dam on the Az Zarqa River, with a capacity of 5 MW. Another hydroelectric generating facility employs a turbine to exploit the head of the cooling water taken from the sea to cool a thermal power station in Aqaba as it flows back to the sea. In 2005, these two stations together generated 57 GWh of electricity and were therefore the source of 0.59% of the electricity generated in the country as a whole.
Other renewable Sources
Biogas
In cooperation with the United Nations Development Programme (UNDP), a project has been developed for utilising the methane gas that arises at the municipal waste disposal site in Amman. With the aid of the Global Environmental Facility (US$ 2.5 million) and the Danish development agency DANIDA (US$1.5 million), a biogas facility has been financed that captures the gases that arise at the landfill and uses a 1-MW generator to generate electricity for the interconnected power grid. The facility has been in service since 2000 and generates some 5 GWh of electricity annually. The installation is run by the Jordan Biogas Company, a joint stock company that is owned by the Central Electricity Generation Company (CEGCo) and the Greater Amman Municipality (GAM).
Biomass
Due to the arid climate, there is not a great deal of vegetation in Jordan. This obviously limits the potential use of vegetable biomass. The burning of vegetable biomass serves to a limited extent in rural regions for cooking and heating and is the main source of energy of the Bedouin in the desert. Great energy potential is to be found in household wastes (municipal solid wastes), which has an organic content of roughly 60%, and is estimated to add up to an annual total of 1.1 million tonnes. This equates to a daily per capita figure of between 0.35 and 0.95 kg of waste with a gross calorific value of 7-11 MJ/kg. The figures vary depending on the time of year and also differ between urban and rural regions.
Geothermal energy
Geothermal resources in Jordan have been identified mainly in two regions. That said, both the sources on the eastern banks of the Jordan Valley and those on the plateau to the east of Madaba offer comparatively low temperatures below 100°C. This means they cannot be used to generate electricity and will continue to be used for thermal purposes only, such as for heating swimming pools and greenhouses.
Political Framework Conditions in the Energy Sector
Deregulation
In the mid-1990s, the Government decided to embark on a restructuring of the electricity sector, a process that was to be conducted in several stages, which have not yet been completed. This restructuring has the following aims:
- Efficient and reliable electricity generation, which supports general long-term development of the country by providing electricity at affordable rates.
- The electricity sector is to no longer burden the national budget through annual losses and is to provide or raise the capital necessary to maintain, develop and expand plants and networks itself.
- Operation and regulation of the electricity sector are to be reorganised in such a way that competition is fostered and private investors can be attracted into entering the Jordanian power market.
To achieve these aims, the reform programme has been set up in line with the following principles:
- To give high priority to recruiting private investors willing to participate in the expansion of the electricity sector. These investors are to help satisfy a growing need.
- To restructure and privatise state-owned companies wherever it makes sense, in order to create independent and economically viable facilities.
- To bring independent power producers into the sector.
- To set up a regulatory system that establishes reliable, transparent and comprehensible basic rules for all participants in the electricity sector.
- To promote environmental and safety standards as well as energy efficiency.
Implementation
This restructuring took place in three phases. In Phase 1 (1994 to 1996), the following measures were implemented: amendment of legislation to enable deregulation of the electricity sector; separation of legislative formation, regulation and operation of the electricity sector; transformation of the electricity authority, JEA, into a joint stock company (NEPCo) that operates according to free-market principles; establishment of the regulatory authority for specifying electricity tariffs; and finally, introduction of a legal framework for independent power producers.
The following measures were implemented in Phase 2 (1996 to 2001): unbundling of NEPCo into separate companies for power generation (CEGCo), transmission (still NEPCo) and distribution (EDCo), whereby NEPCo is still state owned and retains and operates the facilities for transmitting electricity and distributing the load nationwide; extension of the tasks of the regulatory authority to include the issuing of licences to operators of power plants and distribution networks, protection of the rights and interests of electricity customers, the setting-up of quality standards and the approval of investment programmes.
Phase 3 (running since 2001) comprises the privatization of NEPCo and its power generation and distribution subsidiaries. This is to be achieved either by issuing shares or by selling off stakes to strategic partners.
In March 2004, the Jordanian cabinet passed a resolution under which the state’s shares in the distribution companies EDCo and IDECo are also to be sold off, as are 51% of the shares in the national generation company, CEGCo, which has until now been wholly owned by the state. The first attempt in 2005 to sell these shares within the framework of an international tendering process failed due to the lack of a suitable bidder. Following a renewed call for tenders, negotiations were started with investors from Amman (JD Capital), Kuwait (Kharafi National) and Dubai (Abraaj Capital). In January 2007, 64 members of the Jordanian parliament issued a memorandum opposing the sale of CEGCo. Instead, they demanded an increase in the electricity prices of 0.54 euro cents/kWh (5 fils) to bale out the loss-making public corporation.
The Government has being attempting for a long time now to conclude contracts with independent power producers with the aim of expanding the number of power stations in Jordan’s electricity generating system, but it is made only very slow progress. A number of potential projects have been abandoned. The Jordanian Government is currently searching for private investors willing to invest in the construction and operation of new power plants up to 2015, plants that together will offer an additional 1,500 MW or so of capacity.
At the end of 2005, Jordan awarded the first concession for a privately funded power plant project. A combinedcycle power station with a planned capacity of 280-400 MW is being built in the vicinity of the capital, Amman. The US$ 280 million project, which is being financed and conducted by AES Oasis headquartered in Dubai20 and its Japanese partners (Mitsui & Company), is to come on stream in 2008. According to the Government, there are plans for a second project to be conducted by an independent power producer, with another 280-400-MW power station that is to commence generating electricity as of 2010.
As a general rule, the issuing of licences is regulated by the General Electricity Law, Article 28 onwards. In conformance with this law, the regulatory authority issues licences to firms that wish to generate, distribute or sell electricity. Generating plants with a capacity of up to one megawatt are allowed to operate without a licence. Local supply networks with a capacity of max. 100 kW can be operated without a licence, in the same way as power plants that are used solely to generate electricity for self-consumption. Power supply companies or middlemen who want to purchase electricity from a power station with a capacity greater than 5 MW may conclude appropriate supply contracts only after competing in a public tendering process (Article 35). These rules apply equally to conventional thermal power stations and stations that generate electricity from renewable energy sources.
Framework Conditions for Renewable Energies
Strategy and objectives for renewable energies
In December 2004, the Jordanian Government passed a long-term development plan relating to energy supply for the nation. This plan makes provision for investments of around US$ 3 billion in the energy sector over the period up to 2025. It also envisages greater use of renewable resources in the energy industry, with particular emphasis being given to the use of wind power and solar power as well as the generation of energy from biomass. To achieve the planned share of 2% for renewable energy sources in the national energy balance, the development plan sees the need for investments to the tune of US$ 480 million. The plan does not specify how big the share private investors are to take is to be and to what extent the Government will contribute funds required.
According to its own information, the Ministry of Energy and Mineral Resources is planning a series of measures intended to speed up the development of renewable energy sources in Jordan. This includes a new law on renewable energy resources, so far unspecified incentive mechanisms and new maps showing where potential lies for wind and solar energy. Also under discussion is a proposal to redesignate a special charge that has until now been levied to promote rural electrification.
Legal conditions and support Schemes for renewable Energies
The Jordanian Government has publicly expressed its intention to promote the use of renewable energy sources and has regulated the associated responsibilities in its General Electricity Law passed in 2003. According to Article 3, the Ministry of Energy and Mineral Resources (MEMR) has the task and the necessary powers to promote the use of renewable energy sources for power generation in Jordan. Within the MEMR, the departments for renewable energy sources and for energy conservation and environmental protection are responsible for planning and implementing projects that utilize renewable energy resources at a commercial level.
1998 saw the creation of the National Energy Research Center (NERC), which is responsible for R&D, conducting studies, implementing pilot installations, standardisation, technology transfer and training. The power companies conduct their activities in the field of renewable energy sources autonomously. The same applies to the country’s universities.
Jordanian Law No. 16 (the “Investment Promotion Law”) offers a number of concessions for investors who build industrial facilities – such as wind farms – in Jordan. This includes a 100% exemption of installation components and spare parts from customs duties, charges and taxes. Depending on the location of the facility, tax concessions of between 25% and 75% are possible on income tax and social services tax over a period of ten years.
Clean Development Mechanism
In January 2003, Jordan became the third Arab country to sign the Kyoto Protocol and declared its responsibility to pay due attention to the prevention of climate change while furthering the social and economic development of the country. By February 2007, Jordan had yet to submit any climate protection projects under the UNFCCC.
The Designated National Authority (DNA) for CDM answers to the Ministry of Environment. The latter is currently looking for investors for two potential CDM projects. In both cases, the goal is to reduce the emission of gases harmful to the climate by converting and upgrading existing power stations to combined-cycle and natural-gas technology, respectively. The extent to which these projects amount to “additional” measures within the meaning of the CDM rules has, however, not been made clear by the ministry.
One indicator of the fact that Jordan has not as yet fully laid down the preconditions for its participation in the international climate protection mechanisms is an additional grant to the tune of US$ 100,000, which Jordan’s Ministry of Environment received from GEF funds in 2005. The aim of this grant is to create further capacities so that Jordan is in a position to meet its obligations to notify within the framework of the UNFCCC.
Institutional Set-up in the energy sector
Ministry of Energy and Mineral Resources (MEMR)
The Ministry of Energy and Mineral Resources (MEMR) lays down the goals and political framework conditions for development of the energy market. Its core task is to facilitate continuing development of the country by ensuring adequate availability of energy. This is meant to be brought about with as little expenditure as possible, but while maintaining high standards. To this end, the ministry also intends inviting foreign investors in the fields of power generation, oil production and the development of other locally available sources of energy.
Electricity Sector Regulatory Commission
This independent institution established in 2001 has a whole range of tasks. On the one hand it fixes the electricity tariffs and the charges for services related to the sale of electricity. On the other hand it awards licences to power providers and distributors and monitors compliance with the terms of the licences. Furthermore, the commission has been set up to arbitrate between operators and electricity customers in order to find solutions that are as amicable as possible. It also has the job of mediating between power generators or operators of distribution networks in the event of disagreement.
The overriding principle to be followed by the commission in all matters relating to the electricity sector is to ensure the interests of the public at large are looked after. To this end, it can both assume an advisory role as well as make public statements.
National Energy Research Center (NERC)
The NERC was established in 1998 with the goal of promoting scientific research in the fields of renewable energy sources and efficient energy use. Furthermore, the centre also has the task of exploring possibilities of using the oil shale that is readily available in Jordan to produce energy. And the final responsibilities of this establishment are in the fields of training and the transfer of technology in the above-mentioned research areas. The NERC cooperates with among others the Ministry of Energy and Mineral Resources (MEMR), the Royal Scientific Society and the Natural Resources Authority. The energy minister also holds the position of chairman of the centre.
International donor activities
In 2004, the Jordanian Government submitted an application for a US$ 6 million grant from the Global Environment Facility (GEF/World Bank) for a development project in the field of wind power. Part of the remit of this “Promotion of a Wind Power Market Project” is to eliminate obstacles that stand in the way of the commercial use of wind power in Jordan. The aim on the one hand is to improve the legislative and administrative preconditions for the use of renewable energy resources. On the other hand, the project is also to comprise the construction of a 60-MW wind farm that is to financed by private investors. So far, however, only US$ 350,000 has been approved for feasibility studies.
Since 2005, the Japanese Government, together with the Jordanian Government, has been sponsoring four studies investigating the potentials of renewable energy resources in Jordan within the framework of the “Policy and Human Resources Development Fund” (PHRD) of the World Bank. The Japanese share amounts to US$ 1 million, while Jordan is contributing a further US$ 312,000. One particular focus here too is on the wind power segment. Furthermore, the United States Trade and Development Agency (USTDA) is funding (US$ 180,000) a feasibility study into the expansion of the existing wind farms in Hofa and Al-Ibrahimiya.
Existing Projects
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Publications
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