Renewables Readiness Assessment - Jordan 2020-2025. IRENA’s Validation Workshop sparks a dialogue on Jordan’s energy transition

Amman- Jordan. January 24, 2020 by Serene Zawaydeh, MBA.

On January 21 and January 22, 2020, different players in Jordan’s energy sector gathered to discuss and validate recommendations of IRENA’s Renewable Readiness Assessment 2020-2025 for Jordan. 

The workshop was highly interactive and allowed experts and participants from different organizations to share their input on each recommendation in IRENA’s renewable readiness assessment 2020-2025. It was an opportunity to discuss the huge potential of the sector, business opportunities, current challenges, possible solutions and requirements needed to achieve desired targets. Representatives from different ministries attended the workshop including the Ministry of Energy and Mineral Resources, Ministry of Planning and International Cooperation, the Ministry of Labor, the Central Bank of Jordan, Jordan’s Water Authority, among other ministries and companies in the energy sector.

Jordan is taking steady steps in the renewable energy sector. The National Energy Strategy is being updated to reflect new targets to increase the share of renewable energy for 2020-2030.

In addition to Jordan’s role as part of a global effort to reduce carbon emissions, the renewable energy sector has an important role in Jordan’s economy. Increasing renewable energy production will reduce Jordan’s dependence on imports of fossil fuels and gas. It will create business and investment opportunities. Capacity building will develop skills and will create new jobs. 

Energy efficiency measures and energy audits need to be implemented prior to executing renewable energy projects. More than fifty building codes are already in place and need to be implemented. To start with, government buildings and municipalities need to implement energy efficiency measures. An example of a successful initiative in the renewable energy sector, is installation of solar PV cells on mosques in the kingdom.  

The recommendations highlighted the role of renewable energy in electricity generation from different renewable resources. Jordan has an abundant source of solar energy, and implemented projects in Wind Energy. Other renewable resources still need to be utilized and create opportunities for investment, such as biofuel. Recycling still needs to be developed in Jordan. Food waste can be used to generate electricity and biofuel can also be used in the transport sector for operating machinery.

The automotive industry is heading towards electrification and moving away from conventional fuel. Electrification of the transport sector will reduce CO2 emissions; reduce the number of cars on the road, saving time and money. Maintenance fees for electric vehicles is one third the maintenance fees for conventional vehicles. Electrification will create a cleaner environment, which improves individuals’ health. Infrastructure projects are underway for the high speed bus in Amman, which will reduce congestion once completed. In order to pave the way for further electrification of transport, infrastructure needs to be developed to recharge electric vehicles while parked at work, homes and other public locations. The regulatory framework needs to be developed to determine charging tariffs. There is also a need for stability in the regulatory framework as changes to customs fees and taxes affect EV purchases. Equipped with Lithium Ion batteries, electric cars represent an energy storage facility and can also feed electricity to the grid. Energy storage plays a vital role in the intermittent renewable energy resources. Smart meters will allow adjustment of consumption patterns.

In addition to generating electricity, heating will utilize excess capacity of renewable energy. The educational sector awaits improvement, as thousands of schools need to be alleviated from energy poverty. Penetration of solar water heating has room for expansion.

The financial industry plays an important role in the sector, as there is a need to provide funding for individuals, small to medium enterprises, on top of opportunities for large scale projects. The Central Bank of Jordan provides financial institutions with lending at an interest rate of 1% to 1.75% for loans extended to 9 industries including the energy sector. The limit for the renewable energy sector is JD 4 million instead of JD 2 million for small to medium enterprises. Jordanian banks are more risk averse, and the amount of credit is limited compared to other markets. On an individual level, the market is still more cash based. Capacity building and increasing understanding of energy efficiency and renewable energy in the financial industry is beneficial. The cost of fuel is an important part of operating cost and reducing these costs will improve a company’s financial position and improves its capacity to repay its debt, reducing the lender’s risk. The cost of renewable energy projects such as solar and wind has been declining, cutting down the payback period of renewable energy projects, which are becoming more and more feasible.

Incentives for renewable energy projects are a driver for demand increase, such as claiming the cost of installed renewable energy systems in income tax returns. Meanwhile, it should be noted that reduction in the cost of renewable energy are still not reflected in the end user’s bill. While the cost of the system is important, there are other costs that need to be taken into account, which contribute to the final cost to the end users, such as connection to the grid and transmission.

Jordan’s energy transition and increasing the share of renewable energy from the energy mix is an excellent opportunity to develop the local industry and exports of renewable energy products. Increasing Jordan’s Renewable energy production capacity above the local market’s needs means that Jordan can increase its share of electricity exports, for which there is a need. Palestine, Syria, Iraq and Lebanon can utilize Jordan’s energy exports. Local manufactures, such as Philadelphia solar, are exporting solar panels to gulf countries. Maintaining quality of products is key to sustain a competitive role in global markets.

There is a need to increase the public’s awareness on the importance of renewable energy. Universities can collaborate with the industry, training graduates based on market needs. Individuals’ and corporate involvement in the renewable energy needs to be seen as part of a national and international effort to reduce green house gas emissions, as a result of climate change. International funding supports large scale projects in the framework of climate finance.

IRENA will be reviewing the recommendations to integrate discussed comments. The upcoming report will be an important reference for Jordan’s energy transition.

https://www.linkedin.com/pulse/renewables-readiness-assessment-jordan-2020-2025-irenas-zawaydeh/

Renewable Energy Status in Jordan. June 4, 2019

This blog starts with an interview on the renewable energy sector in Jordan, followed by energy fund projects. It also includes opportunities for energy storage.

Engineer Samer Zawaydeh, Renewable Energy expert, provides an overview of the Renewable Energy status in Jordan. This overview highlights renewable energy regulations, Wind and Solar Energy projects, Utility and Residential Scale PV implementation, and Electric Mobility status.

Jordan started the integration of renewable energy into the grid after the issuing of the Renewable Energy and Energy Efficiency Law 13 in the year 2012. Under this law, two bylaws were issued. Bylaw 10 for customs exemptions and tax exemption for all energy efficiency and renewable energy products that enter the country. Bylaw 73 for all regulated products and services in energy efficiency.

The two Main renewable energies in Jordan are Wind and Solar. Utility scale wind energy is installed in the south in Tafila, Maan, and Shobak.

As of 2018, the following Wind projects are online:

• Atafila 117 MW using Vestas Wind Turbine generators V112x3.0 MB Turbines
• Maan 80 MW using Gamessa 2.0 x 84 Wind Turbine Generators
• Shobak 86 MW
• Fujaij 89.1 MW

It is worth mentioning that the first utility scale wind turbine was installed in Hofa North of Jordan in 1998 using 5 Turbines 0.225 MW. This means that the size of turbines increased by 50 times in the last 20 years.

Solar energy was developed on both the utility scale and consumer scale since 2012. Utility scale projects started with developing Solar Park 1 at Maan development area. 9 projects out of 12 projects that were completed after the first auction (Expression of Interest #1) were developed and commissioned and Solar Park 1 in Maan by September 2016.

Feed-in-Tariff was used to purchase the energy generated from these projects. The purchase price was 0.12 JD per KWh. The largest project was Shams Maan 52 MW AC generating 160GWh per year.

The second auction was issued on a competitive bidding basis instead of the Feed-in-Tariff because the prices for the solar PV components were declining and the efficiency was increasing. The purchase price for the electricity generated from the second expression of interest was 0.049 JD per KWh (0.069US$ per KWh). The lowest price was 0.043 JD per KWh.

The second Expression of Interest project was developed North of Jordan. Three projects (150MW total) were developed in Mafraq area and one project in Safawi.

The third auction (Expression of Interest #3), brought in the lowest prices per KWh during September 2018 when the prices were revealed and the lowest price was 0.0176 JD per KWh (0.0248 US$) per KWh.

In addition to the expressions of interest, direct proposals were allowed since 2012 when the Renewable Energy Efficiency Law REEEL 13 for the year 2012 was introduced.

Philadelphia Solar completed the first utility scale on grid project by building a 10MW project that came online in 2015. Later on, Philadelphia Solar expanded their 12.6MWh lithium ion battery storage with 17MW on grid system. The lithium ion batteries were manufactured by the US supplier “Tesla”.

Consumers started installing Solar PV projects to cover 100% of annual electricity needs. The first project was 2.2KW residential system that was installed in Fuheis on November 29, 2012. As of end of 2018, the local distribution company in the middle of Jordan, JEPCO, installed 250MW for consumers using both net metering on site and wheeling (off site projects). Wheeling projects are used to cover up to 100% of the annual electricity needs for the urban consumers that do not have enough space in big cities to install the solar PV system and they purchase or rent land away from the cities where space is available near the electricity distribution networks.

The use of electric vehicles started in Jordan in 2014, to reduce dependency on imported fuel and reduce pollution in large cities. In 2015, the Greater Amman municipality started a project for electric public transportation using 30 Nissan Leaf vehicles. Passengers can use Electric Vehicles on specific routes for 0.5JD (0.7US$). Electric vehicles use increased considerably in the following years because the government was not charging any customs or sales taxes. In 2018, the average number of electric vehicles in Jordan was 1500. The majority of car companies already have EV maintenance capabilities at their maintenance facilities. The two most sold brands are Nissan Leaf and BMW I3. In addition, Tesla opened 10 charging stations across Jordan.

The government of Jordan bought 300 Tesla vehicles for ministers and top employees in 2015. In addition to being best in class, Electric Vehicles are reducing the operational cost of transportation for the government.

In 2019, the government of Jordan removed the tax exemption on electric vehicles and announced 25% customs on Electric Vehicles. This resulted in a decline of EV sales and the civil society's action to cancel this decision.

The Energy and Minerals Regulatory Commission, EMRC, has already issued regulations for the installation of electric vehicle charging stations at each new gas station in anticipation of the growth of Electric Vehicles market. The selling price of electricity at the charging station is JD 0.135 per KWh. Jordan remains the 4th best country in the world for generating electricity from solar sources and the opportunities for electrification are limitless.

Jordan Renewable Energy & Energy Efficiency Fund (JREEEF)

According to the Ministry of Energy and Mineral Resources, the Energy Fund implemented renewable energy and energy efficiency projects for the value of JD 50 million over the past four years (2015-2019). The fund contributed JD 19 million, and the rest was paid by project owners and donors. The program supports households (solar water heating, solar PV, LED lighting), government buildings, heating schools, and different sectors, including agriculture, tourism, services, industrial, mosques.

An initiative was launched in 2015 to equip all 6000 mosques in Jordan with solar rooftops. The renewable energy fund provides 50% subsidy, and the rest is based on donations. An annual program supporting mosques in cooperation with the ministry contributes a total value of JD 4 million. 483 solar PV systems were installed to generate electricity at mosques.

The fund supported the agricultural sector through the installation of small-scale renewable energy systems, by providing JD 15,000 loans. The renewable energy fund provides the full amount of interest and fees for the loan, to help farmers reduce their electricity bill, and to increase their competitiveness and turn them into clean energy.

Industrial sector: The fund cooperates with the chamber of industry, empowering factories with energy efficiency programs, to reduce the electricity bill, increase competitiveness of the industrial sector, and reduce pollution and emissions.

Educational sector: Project with duration of 5 to 7 years covering 2600 schools with solar energy and energy efficiency programs, to reduce electricity bills, install LED lighting, solar water heating, and install solar PV cells. Heating 128 schools – insulation, LED lighting, heating and cooling, solar water heating,

Households: 22,000 solar water heating systems were installed, with 50% subsidy. Funding was provided for 3500 poor households, that were provided with solar water heating systems, LED lighting, and 1600 PV systems were installed to generate electricity from solar energy.

PV/ EV Integration Opportunities

Additional benefits of solar photovoltaic cells would be to store the energy for later use, and charging electric vehicles. An example of such a system is "DC Energy Hub" system from Ferromap". Using this system allows for fewer conversion losses - DC from the solar cells to charge batteries, to AC for the electricity grid and vice versa, and allows for flexible cabling.

The challenges for applying such a system, would be the cost of implementation of both the PV system, battery system, and the cost of Electric Vehicle. Removing the customs exemption on Electric Vehicles reduces competitiveness of EVs in Jordan.

More funding and subsidies would be needed to reduce the cost of the system and to increase implementation of PV/ EV integration. This can be an opportunity for banks to introduce new energy funding plans. More marketing would also be needed to increase awareness of the benefits of solar energy not only for generating electricity, storing energy for later use, but also for electric vehicles.

The advantage of such a system would be reducing the cost of fuel, and reducing CO2 emissions. The sun is available 300 days per year in Jordan. Benefiting from solar power through PV installations, and coupling the system with energy storage systems, and EV charging would reduce load on the grid, reduce the imports of petroleum products used for electricity generation and would reduce the national electricity bill. Energy storage would help reduce the load on the network during the peak hours, reduce the need to invest in physical infrastructure expansion for the grid; and would provide an uninterrupted power supply in case of power outages. 

Last edited on: Nov 16, 2019

Prepared by Serene Zawaydeh, mba.