In focus: Jordan
Can alternative power generation fill the gap left by oil and gas?
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.
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.
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.
Jordan in the news
Jordan to produce uranium by 2013
The Kingdom of Jordan is currently on track to be a uranium producer within the next two years, despite much controversy over the country’s nuclear programme. The Minister of Energy and Mineral Resources, Khaled Toukan, has said that the Kingdom will begin mining for uranium by 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.
Call for stricter water penalties in kingdom
Experts have called for stricter enforcement of water-related laws and regulations, to better protect Jordan’s dwindling water resources.
During a workshop organised by the Public Action in Water, Energy and Environment Project and the National Campaign for Public Awareness of the Drivers of Change, participants analysed consumption patterns in agriculture, households and large establishments like hotels and hospitals.
Jordan represented on IAEA board
Jordan’s resident representative in Vienna has been elected to the role of Vice President of the International Atomic Energy Agency’s Board of Governors. Makram Qaisi was selected for the position by acclamation after his nomination by the Group of 77 and China, according to the Foreign Ministry.
In a report by the Jordan News Agency, ministry spokesman Mohammad Kayed said that that Jordan’s representation on the board is an important step on the political and technical levels that shows global understanding of the Kingdom’s nuclear programme, in order to meet its medium and long-term water and energy needs.
COUNTRY SNAPSHOT - Ahmad Sallakh, mesc cables, jordan
How’s business in Jordan?
During the last few years, Jordan has witnessed economic growth which has attracted various investment opportunities, due to its political strategy and its geographical location among GCC, Levant countries and in particular Iraq.
Construction has been one of the main elements of the economy, with more than 1,600 building companies employing an estimated 100,000 workers and contributing 4.5 per cent to GDP in 2009. The main threat is the tough competition in the market due to large numbers of competitors in the local cable manufacturer sector, along with the imported material from other companies in the region.
What are the biggest challenges in the country?
97 per cent of energy needed in Jordan depends on importing oil and gas, which represents 25 per cent of the Kingdom’s annual GDP. Along with the stoppage of gas supplements due to the situation in Egypt, which is the main supplier to Jordan, the country has tried to find other suppliers to cover the shortages. Meanwhile, Jordan is starting to study the opportunities of implementing renewable energy such as wind and solar power, in addition to nuclear energy.
How will you be a part of Jordan’s new energy developments in the future?
We have started designing and developing certain types of cables that can be useful for renewable energy sources such as wind and photovoltaics, and on the nuclear side of things our research and development team is studying the chances and the requirements of manufacturing these cables in the near future.
What big changes do you forsee for Jordan’s utilities industry?
Shifting the resources of energy to green energy needs a great effort from both utilities companies and the suppliers of these companies, in order to improve the industry, and this should open new opportunities to all players in the sector.
What challenges do you face in Jordan?
During the last few months, the Jordanian economy has been passing through recession, especially in the construction sector. Major projects and plans were cancelled and others were put on hold. The Jordanian government should support the industrial sector by providing it with more incentives in terms of tax and customs.