Cooperation on Renewable Energy in Jordan

Source: Oxford Business Group

A Jordan-Russian joint venture in the field of renewable energy was registered in the Mafraq Special Economic Zone this week, with the aim of reducing the percentage of traditional energy consumption in the kingdom.

The new joint company specialises in designing and selling solar panels and auxiliary equipment across the Middle East and North Africa, with the biggest consumer market being Iraq, due to the large demand for solar energy electricity generation.

The production facilities of these solar panels are located in Moscow but the company is striving to transfer the production base to Mafraq. The Jordan-Russian joint venture has already established 10 patents in the fields of solar energy, wind energy, geothermal energy and biogas energy and is establishing a number of partnerships with Jordanian universities for research and development and funding purposes.

The company is also liaising with a number of global renewable energy institutes in Germany, the United Kingdom and Russia for further experimentation and studies. It has commenced work in Northern Iraq to construct a solar energy electricity generation plant with a 50MW capacity. The company will look for an initial capital of JD 200,000 and will create around 200 jobs.

This comes at a time when the ministry of energy is developing a long-term strategy to increase renewable energy use in the kingdom.

Khaled Shraidah, the Jordanian minister of energy, told OBG, "The problem with renewable energy is that everyone is in favour of it but still there is a certain gap between the cost of renewable and conventional energy. However, to reduce this gap, I am acting on a council of ministers'decision to exempt renewable energy products from tax and Customs, provide land and water for free as well as interconnectivity to the national grid for renewable energy companies."

Such measures are aimed at supporting and encouraging the private sector to make such projects commercially viable. To that end, a draft law to create a renewable energy fund and establish a renewable energy financing programme is also under study.

According to the International Energy Agency statistics for 2004, the kingdom is 97% dependent on external energy supplies. Jordan signed an agreement with Egypt in January 2004 to import 2.65bn m3 of gas per year from the beginning of 2011.

The government is naturally keen to reduce this dependency and aims to generate between 8 and 10% of electricity from renewable sources by 2015, which should be extended to 15% by 2020.

Shraidah believes Jordan has the potential to develop a strong niche in wind energy, in line with global trends. Indeed, according to the Global Wind Energy Council, wind energy is the fastest growing renewable energy sector. Global wind power generation more than quadrupled between 2000 and 2006 with the wind market increasing by 32% in 2006 alone. The average annual cumulative growth rate during the period 2006-2010 is expected to be 19.1%, compared with 24.3% in the period 2002-2006. The annual installed capacity is predicted to reach 21GW in 2010, an increase of 38% from the15.2GW installed in 2006.

Jordan already has two pilot wind power projects in the northern and western regions with a capacity of 1.3MW. It is generally accepted that wind generators are effective where the wind speed reaches 4.5m/s and these areas have wind speeds that exceed 7 m/s, which makes them ideal locations for wind power generation. The ministry of energy expects to develop a fully operational commercial plant within the next two to three years. Official predictions target an installed capacity of 300MW of wind energy by 2015.

According to Shraidah, "We have six or seven promising sites for wind energy in Jordan (...) We hope these wind projects will set a paradigm for renewable energy in the region."

The ministry of energy signed memoranda of understanding (MOUs) with German companies Conergy and City Solar to start generating electricity from solar energy through the execution of pilot projects using Concentrating Solar Power Systems (CSP) and Photovoltaic systems (PV). However, most solar power in the kingdom thus far is localised in remote and rural villages or used for individual domestic purposes.

Although limited in the short-term, there is potential for other forms of renewable energy such as hydropower. When the Red-Dead Sea canal project takes off, various studies have suggested that between 400 and 800MW of power could be extracted from the 400m-elevation difference between the two seas.