US photovoltaic company First Solar, which plans to build one of the region’s biggest solar power plants in southern Jordan, said recent major oil price fluctuations mean it’s vital for states in the region to continue diversifying their energy sources.
Ahmed Nada, First Solar’s vice-president for the Middle East, said any prudent country will continue to build an energy mix portfolio that includes renewables. “You cannot predict the future. Who could have imagined a 40 percent drop in oil prices in less than six months? So there’s a volatility that continues in the energy sector. Who knows, maybe next year the price of oil will go back to $120,” he said. “I believe that any country whose strategy is to have a diversified portfolio of energy will always find good reasons why they should continue to invest in solar in particular, and renewable in general.”
Jordan has been heavily relying on heavy fuel to generate electricity following the continuous disruption in Egyptian gas over the past three years. But oil prices continued to fall since the summer, plummeting to below $63 a barrel, its lowest price since July 2009.
Nada said his company would be bidding in a second round of renewable energy contracts due to be tendered by the government on January 20. Developers will be competing over four plots of land in the north-eastern part of the country, to build 50 MW power plants. Forty-five companies, five of which are American, are expected to take part in the tender, Nada said.
During the first bidding round, the government signed agreements with 12 companies to develop renewable energy projects. Ten will be located in Ma’an, one in Aqaba, and one in Mafraq.
First Solar is already an engineering, procurement, and construction (EPC) contractor for the Shams Ma’an project. The 52.5 MW power plant in the Ma’an area is 70 percent owned by Mitsubishi’s Diamond Generating Europe Ltd. and Nebras Power Q.S.C., while the remainder is held by Kawar Group.
Construction of the power plant is expected to kick off early this year. “The opportunities in Jordan in the solar sector are very viable for American investors … We came here as an investor, a technology provider, and contractor to develop and execute the project,” said Nada, adding that his company had recently completed work on building the largest photovoltaic power plant in the world in California.
Nada said his company was satisfied with the government’s decision to lower the ceiling tariff for phase two to 100 fils, from 120 in the first phase. He added that this tariff continues to be very favorable with foreign investors and allows Jordan to benefit from the improvements in the technology, particularly now that the overall portfolio of solar industry is heading towards more favorable economic to the end-users.
He also commended the Kingdom’s renewable energy legislation and clear vision on how to implement renewable energy projects, as well as Jordan’s appetite for international funds and foreign investments. “As long as we have this welcoming regulatory framework and facilitated investment opportunities, only the economics then become what we need to evaluate and so far there are true valuable economics for solar projects in Jordan,” Nada said.