In focus: Jordan

The Dead Sea - fed by the River Jordan, one of the Kingdom's few water sources, and one which is increasingly struggling to supply a significant propo

Perhaps Jordan’s biggest issue is that with precious little in the way of oil and gas resources, the country is heavily reliant on imports for its energy needs. In 2009 the Kingdom imported 96 per cent of its energy needs; for that year, its energy bill came to 12 per cent of GDP.

Clearly this is unsustainable long term and there are further woes, too. Recent issues with the country’s supply of gas from Egypt following a series of pipeline attacks is likely to land Jordan with a $1bn bill for diesel and heavy fuel, according to Energy Minister Khaled Toukan, and the nation has no choice but to keep relying on expensive emergency measures.

Story continues below

Advertisement

FEATURED COMMENT Please click here to comment on this article

With the price of oil heading only one way, Jordan needs a plan and surprisingly, it could come from its natural resources. Oil shale, nuclear power and renewables have all been put at the forefront of a national energy strategy that seeks to turn Jordan from a net energy importer to a net energy exporter over the coming decades.

Ambitious targets will see the Kingdom attempting to address 10 per cent of its power needs through renewable resources by 2020. To that end, the green light was given to a consortium of Italy’s Solar Ventures and the Amman-based Kawar Energy to build a $400m 100 megawatt solar plant, which would be the world’s largest PV plant.

Currently there is no planned commission date for the plant, but once completed it is estimated that it would generate in the region of 1.2 per cent of the Kingdom’s current capacity.

Discussing Jordan’s renewable energy policy, the Kingdom’s Minister of Energy, Dr Khaled Toukan, said: “We believe that starting the process to reshape Jordan’s strategic energy policy to that which involves more renewable energy sources is highly important.

We look forward to meeting regional and international investors and experts to discuss renewable energy, its challenges and solutions, and have Jordan lead the way regionally to a new phase of secure and renewable energy.”

In January 2010 a renewable energy law was passed, simplifying the procedure for the establishment of clean energy projects.

The law mandates the National Electric Power Company to purchase all power produced by renewable generating plants, as well as to cover the cost of connecting such plants to the grid.

Jordan’s solar irradiation levels can hit 8.5 KWh per square metre, and with winds regularly in excess of seven metres per second, the Kingdom is well placed to capitalise on its alternative resources.

For some years now energy consumption growth in the country has been outstripping growth in generation by some margin, and NEPCO, the Kingdom’s electricity company, has estimated that power demand will grow by six per cent by 2015, reaching 7,564 megawatts by 2030.

In an effort to catch up, Jordan has embraced private sector involvement with the first independent power project coming online in 2009, delivering 370 megawatts from its combined-cycle system. A second IPP, Al Qatrana, should add another 373 megawatts and was expected to be fully operational by August this year.

Construction began in March 2010, with the 25-year build-own-operate contract awarded to a joint venture between Korea Electric Power Company (KEPCO) and Xenel industries.

Of course these, plus two more planned power projects of similar size, all rely on traditional feedstock which, unless the country dramatically increases gas production from the Risha gas field, means running them on expensive – and imported – heavy fuel oil.

Energy conservation
This has led Jordan to look closely at energy conservation, with Walid Shahin, at the time acting president of the National Energy Research Centre, saying: “The government has to think not only about how to bring energy to Jordan, but also how to use this energy better and with more efficiency.

We have to think about reducing consumption, which could save us between 20 and 25 per cent on our energy bill. Economic growth does not necessarily mean consumption increase.

Like almost all Middle Eastern countries, Jordan has ambitious plans for its nuclear programme. However, with much of the world turning away from atomic energy following this year’s Fukushima disaster in Japan, public reaction to the programme has been somewhat unfavourable.

In September this year, Toukan announced that the country would have a nuclear reactor by 2019, which would generate in the region of 1,000 megawatts, and estimated that the country could be supporting 65 per cent of its power generation with nuclear by 2035.

The Jordan Atomic Energy Commission has already begun reviewing financial bids from three energy giants – Russia’s Atomstroy Export, Canada’s AECL and a Japanese/French joint venture comprising Mitsubishi Heavy Industries and Areva.

The winner will be announced at the end of this year, but the programme has received widespread criticism from the public, showing a lack of support and concern that the country is rushing plans for atomic power, without full consideration.

The government also recently announced that it plans to be a producer of uranium within the next two years, and will begin mining in 2013 following a series of feasibility studies. The Al Hassa region of Jordan is home to some 15,000 tonnes of uranium reserves, with further quantities located along the country’s border with Iraq.

It is estimated that the countries total conventional uranium reserves are in the region of 140,000 tonnes.

However, Jordan’s geography doesn’t particularly lend itself to a nuclear future. With water a scarce resource and a nuclear plant drinking some six million cubic metres of it per year, just putting in place the basic infrastructure to run a nuclear facility is likely to cause problems.

Siting the plant near the sea is a good start, but the majority of Jordan’s population lives inland, forcing the government to look into a vast electrical network robust enough to handle high volumes over long distances.

Despite public outcry, Jordan’s nuclear activities are reasonably well advanced. The basic structure of the first plant’s development has already been sketched out; in line with the country’s welcoming of the private sector, the plant will be constructed under an IPP model on a 30:70 equity split between the private sector and the government.

The Kingdom is also now represented on the board of the International Atomic Energy Agency, following the selection of Makram Qaisi for Vice President of the IAEA’s board of governors.

Jordan’s energy future depends on a smart mix of energy resources. The Kingdom has an abundance of potential energy resources, but all need expensive development, pushing the cost ever higher. However, continuing to spend vast quantities of the country’s GDP on feedstock for power generation is simply not sustainable, and neither is remaining heavily reliant on sporadic imports of gas from neighbouring nations.

“We are looking to reach an energy mix where the majority of the mix is from indigenous resources, whether they be conventional or unconventional,” says Dr Maher Hijazin, director general of the Natural Resources Authority. Short term high energy prices could well be a barrier to the development of the required energy mix, but it might just be the long-term future of the country’s energy infrastructure.