Ministry of Energy begins renegotiations of renewable energy contracts

2. Energy-for-Water
(Photo: Envato Elements)
AMMAN — The Ministry of Energy and Mineral Resources has initiated meetings with renewable energy producers in a bid to renegotiate the green energy selling price to the National Electric Power Company (NEPCO) and electricity distribution companies in hopes to arrive at price reductions from previously signed power purchase agreements. اضافة اعلان

A recent agreement between the government and renewable energy power producers set the selling price at 17 fils per kilowatt; however, the government had in past agreements with other companies set the price range at 34-115 fils per kilowatt.

Official spokesman of the Ministry of Energy and Mineral Resources Mashhoor Abu Eid told Jordan News that the renegotiation is a step that the ministry is currently working on to reduce the electricity cost and ensure justice towards all the companies operating in this sector, on one hand, and NEPCO, on the other hand. Renegotiating the rates also aims to achieve an attractive and stable investment environment based on equitable and solid foundations, he said.

Abu Eid added that “the government began discussions earlier this week and intends to hold periodic meetings with all companies. However, the outcomes remain uncertain.” He added that the ministry will announce the results as soon as they have been confirmed.

Renewable energy investor Firas Balasmeh told Jordan News that the attempt to renegotiate is “ridiculous”, and that he believes that the government has taken this step “to appease Jordanians and win the backing of lawmakers.”

Balasmeh added that the existing contracts are international contracts and that “any attempt to renegotiate them is an “absurd idea”, shedding doubt on any potential that they may bring results.  

“How can the government renegotiate contracts that were signed and agreed two years ago?” he questioned.

Moreover, Balasmeh believes that the move would discourage future investments in the renewable energy sector. “When you sign a contract with a certain body you have to honor it, or you will lose trust.”

MP Ali Al-Khalayleh told Jordan News that the energy file in Jordan “remains distorted”, and that there must be an intent towards restructuring renewable energy agreements.

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