NEPCO has paid JD380 million for unused energy—MP

(Photo: Jordan News)
The National Electric Power Company (NEPCO) has paid JD380 million to private energy generating companies for unused electricity because of capacity clauses in contracts between the company and private energy suppliers, head of the Lower House Energy Committee, Firas Ajarmeh, told Jordan News.اضافة اعلان

Jordan's electrical capacity is 6000 megawatts, while the country's annual average load usage is between 2000-2500 megawatts. Therefore, the amount of redundant energy is between 3700-3800 megawatts. NEPCO has been paying for a part of that unused energy.

"For example, if a contracted company produces 200 megawatts and the government needs only 100 megawatts, the government would pay for the 100 megawatts it needs and partially pay for the other 100 megawatts. These payments have accumulated to reach JD380 million," Ajarmeh said.

These payments result from an oversight in the contract clauses between NEPCO and private electricity producers. So far NEPCO has been unable to find a solution for the excess energy produced or to the faulty contracts that are forcing it to pay millions for unused electricity.

Currently, NEPCO has a JD5.5 billion debt, with a yearly interest of about JD118 million, economist and specialist in oil and energy affairs, Amer Shobaki, told Jordan News.

The rising debt of the company resulted from the increase in fuel prices a few years ago when oil prices reached $140 a barrel in the international markets,” Ajarmeh said. NEPCO bears the losses because it supplies fuel to public and private electricity producers it has contracts with. “This is a major blunder: Why would NEPCO buy the fuel and endure losses when its partners would only make profits? It’s a big issue that must be resolved," he added.

Shobaki pointed to long-term contracts NEPCO has with energy producers and which it can’t retract because of penalty clauses.

One possible solution according to by Ajarmeh and Shobaki is to export excess energy and to expand the electrical grid in the Kingdom.

Jordan is already exporting 80 megawatts to the West Bank. Next year it will supply Lebanon with electricity through the Syrian-Lebanese power grid. But Lebanon only requested 150-250 megawatts and this small amount is due to the limitation of the Lebanese infrastructure. Another option is Iraq which has been in talks with Jordan to import electricity, but this may not happen because Saudi Arabia provides cheaper energy through a pre-existing power grid.

"The options are limited. NEPCO should disclose how these contracts with private energy producers came to be," Shobaki said.

Shobaki said that the power company should be liquidated since its debt is now out of control.

NEPCO and the ministry of energy refused to give statements to Jordan News.

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