The expansion of Jordan’s renewable energy sector has seen a marked acceleration in recent years.
Nearly 1,000 MW of solar and wind projects are currently being implemented across Jordan. These developments dovetail with a national strategy aimed at raising the share of renewables in the energy mix to 10 percent by 2020, equivalent to a generating capacity of some 1,500 MW.
Development of renewable energy sources has become increasingly critical for Jordan in recent years, as fuel oil imports and electricity subsidies have led to financial losses for the state-owned National Electric Power Company (NEPCO).
Jordan has historically imported around 97 percent of its energy needs at a cost of close to 18 percent of GDP, according to figures from the Ministry of Energy and Mineral Resources (MEMR).
Central to the Kingdom’s efforts is the Green Corridor project, which is aimed at reducing dependence on hydrocarbons by increasing Jordan’s ability to absorb the loads generated by new renewable energy capacity stemming from wind and solar.
The upgrades involve the construction of two new transmission lines—a 400-KV, 150-km line and a 132-KV, 51-km line.There will also be upgrades made to three existing 132-KV lines stretching 100 km each.
Additionally, a new 1,200-MVA electricity substation will be constructed in northern Ma’an, while the stations at Qatraneh and Queen Alia International Airport will also be expanded, according to local media reports.
Last year saw the$159.7 million multi-component project awarded key funding.
Development is being co-financed by the French Development Agency, which has issued a $54.9million soft loan; the European Investment Bank, which is providing $72million worth of project finance; NEPCO, which has contributed $12.6million in funding; and the EU Neighbourhood Investment Facility, which has offered a grant of $20.2million.
While tendering for the construction was delayed at the beginning of the year, the project is slated for completion in 2018.
The Green Corridor investments are specifically designed to reinforce the nation’s electricity network in the sparsely-populated center of the country, which isideal for the use of solar generators. Solar power is seen as a sustainable option for Jordan’s long-term energy security, as the country boasts about 330 sunny days per year.
According to SamerZawaydeh, a Jordan-based engineering consultant, the bulk of the solar photovoltaic (PV) farms currently under construction—totalling around 200 MW—are located in and around Ma’an, whereas the majority of consumption stems from the capital Amman, he told industry press.
Ma’an is close to the 52.5-MW solar PV Shams Ma’an power plant, which will be the largest solar PV facility in the country when it opens later this year.
In April, a $148million wind power project was also inaugurated in Ma’an and is expected to generate 200GWh annually, according to local press reports.
To unlock the country’s renewable energy potential, the government signed a number of solar and wind project agreements in June 2015, which are expected to be operational by 2018 and will each generate about 1,000 MW, MEMR spokesmanz told local media last year.
Importantly, these initiatives have provided an opening for foreign investment in the renewables segment.
In January Masdar, an Abu Dhabi-based renewables developer owned by the Mubadala Development Company, announced it had signed an agreement to invest $300 million in a 200-MW solar project, marking the company’s second renewables project in the Kingdom.
According to Ahmad Belhoul, Masdar’s CEO, changing price dynamics have made renewable energy projects more promising. He said prices of solar PV have fallen by 60 to 70 percent over the last six years, while prices of wind power projects have also dropped. Factor in growing government enthusiasm, and “the economic case for renewables is clear,” Belhoul told media earlier this year.
Another Abu Dhabi-based player, Enviromena Power Systems, won a $128million joint deal with Spanish engineering firm TSK Group in December to build a 103-MW solar PV power plant in Al Quweira in Jordan’s southern region, according to press reports.
Development of the Al Quweira plant, which is being funded by Jordan’s MEMR through a grant from the Abu Dhabi Fund for Development, is intended to help the country achieve its target of 600 MW of solar and wind power by the end of this year.
According to Sami Khoreivi, CEO of Enviromena, lower energy prices are spurring on regional investment in renewables.”There is a massive increase in solar power installations in the MENA region,” he told international press in January. “This year we will see 10 times more contracts than last year.”
This Jordan economic update was produced by Oxford Business Group.