Oxygen Global Energy is offering Jordanian companies the chance to cut costs by grouping together to develop renewable energy projects.
By Rebecca Irvine
Oxygen Global Energy Cofounder Yazan Faouri says his company’s innovative business model, which brings companies together and develops a solar project on their behalf, can provide the answers to Jordan’s energy needs. Employing a ‘net metering’ scheme off the back of the government’s new renewable energy regulations, the project is the first of its kind in the Kingdom, and will provide energy to a range of private sector end-users.
How is the business model unique?
There are different kinds of solar projects: direct proposals, where companies initiate the solar project and sell the government the electricity directly; self-consumption projects; and this kind, where a developer initiates a solar project on behalf of a group of end-users. What we are doing is combining more than 35 end-users, big consumers, to develop, engineer, finance, and operate a utilities scale project on their behalf. It’s the first of its kind in Jordan, and will produce 100 MW. It’s one of the biggest in the region as well.
Who are you partnering with?
Our target market includes hotels, hospitals, factories, and other users like large companies. They currently pay the highest tariffs in Jordan because they’re not subsidized like small consumers and households are. The project will provide them with an opportunity to save millions of dollars over its lifetime. It’s the means to provide their own energy.
Why is this project important for Jordan and how will it fit into the country’s energy needs?
It’s important from different perspectives. From the government perspective, it’s important for overall national energy security and will contribute to the energy needs of Jordan. In the past few years Jordan has lost billions of dollars in trying to meet its needs as we have high dependency on imported energy (97 percent). Such projects help fill this gap for the Jordanian government, while trying to find a sustainable source of energy for the country. Needless to mention that it’s a clean energy source and will save 160,000 tons/year of CO2 emissions.
For the private sector side, it gives them an opportunity to be more competitive in the region. One of the main challenges facing a lot of industries in Jordan is that they cannot compete with similar industries in the Gulf and the region because the electricity there is subsidized and it’s much, much cheaper than here. This means the cost of producing goods in Jordan is high, so they can’t really compete. A project like this will give them the opportunity to lower their costs, and be more competitive. For other entities, such as companies, hospitals, and others, it will give them more room in the budget. The electricity bill for a big consumer is approximately a million dollars a year. If you can save around 40 percent of that over the lifetime of the project, then you have extra capabilities to invest in the business and be more competitive.
Why is renewable energy of particular importance to Jordan?
It’s definitely the most important area for the future. According to the Jordanian government’s plan, in the upcoming four years, 10 percent of overall energy consumption will be produced from renewable energy—that’s a huge number. We are blessed in Jordan for having high solar radiation and more than 300 sunny days a year, so it’s the future for the Kingdom’s energy.