AMMAN — Jordan can do more; a lot more to move closer to generating cleaner, more sustainable and affordable renewable energy. The times have never been more suitable for continuing the push away from old polluting and costly conventional power sources, experts say.
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Since 2010 the cost of renewable power generation per kilowatt hour (kWh) has become the default economic choice for new electricity capacity, according to The International Renewable Energy Agency. The cost of utility-scale solar energy per kWh has dropped from $0.35 in 2010 to $0.068/kWh in 2019 and continues its slide as more savings are realized in manufacturing, installation, maintenance and management, undercutting fossil-based electricity production. Offshore wind power costs have also dropped, reaching $0.115/kWh in 2019. So what went wrong and why isn’t Jordan continuing its drive and transition to renewable energy?
Obsolete grid is the problem
“We had a good regulatory platform that addressed many of the pain points for initiating and setting up a competitive renewable energy sector, but while part of it was implemented, we later saw amendments introduced to satisfy standalone KPIs for the involved government departments, changing the essence of the original renewable strategy,” Tareq Khalifeh, MASE managing director, told
Jordan News.
According to Khalifeh, Jordanian renewable energy discussions have mostly ignored solutions, focusing instead on the problems facing the transition to renewable energy for electricity production, and the perceptible complications associated with technically managing those intermittent generation assets. The simple “straightforward” solution, he added, is to upgrade the grid and bring it up to speed through expansion and technology upgrades.
Jordan’s grid infrastructure is not keeping up with the developments on the supply side of the energy mix. To simplify, the grid infrastructure (hardware and software platforms) have not seen the same rate of development and advancement to accommodate and manage complicated elements which are inherently part of renewable energy generation assets. “Jordan’s grid is outdated and requires investment to modernize it and bring it up to speed,” he added.
Upgrading the grid requires expanding the reach and capacity of high and low voltage electric networks; adopting new process control technologies; implementing Internet of Things, and adding electricity storage units on the grid.
NEPCO, the national supplier of electricity, has concluded several studies for initiating grid upgrades, but they’ve mostly been archived, according to Khalifeh. These studies are not for major infrastructural works but recommendation for incremental changes that would see energy storage capacity installed and other developments to turn it into a smart grid. If NEPCO launches initiatives for upgrading the grid, it generates interest in the private sector to structure new businesses to serve them; thus creating new wealth in the Jordanian economy.
“A lot of the upgrades are really backend work, such as upgrading to digital management systems and capacity building to understand how to manage renewables on the grid,” Khalifeh said. “We can leapfrog all the technology and into the most recent technology and that will save time and money and it’s a lot more affordable now; in fact, exponentially more accessible than before.”
Lack of a unified vision for green energy
NEPCO and Jordanian producers of renewable energy like MASE share the same objectives when it comes to electricity consumption. MASE is an award-winning operations, maintenance, and asset management firm focused on solar PV and operates across the Middle East. The company operates over 500 solar PV facilities with an installed capacity exceeding 350MW peak.
Incentivizing demand for electricity on the grid is in NEPCO’s and MASE’s interest to encourage renewable energy investment and production. Their mutual strategy, however, is undermined when “there is no alignment across the regulatory ecosystem,” he added. “NEPCO is our contractual counter-party and the better their cash flow is, the better it is for us.”
For example, when regulators impose higher taxation on electrified sectors, such as transportation and industry, NEPCO’s ambitions for encouraging the electrification and modernization of key sectors is undercut, Khalifeh explains.
The Jordanian industry already suffers from the high cost of energy and cannot compete as a result with countries offering lower energy costs. “This has pushed many industries to migrate to industrial zones that offer energy costs that are about 50 percent of Jordan’s; such as Tabuk in Saudi Arabia,” Khalifeh said. “They go there even when work conditions might be worse and manpower quality is less available.”
Aligning strategies to reap long-term benefits
The main problem with transitioning to renewables is that the strategies of regulators and government ministries are not aligned to reach an efficient renewable energy ecosystem, according to Khalifeh. Such strategic alignment is essential because it redirects investments toward creating efficiencies in the green energy ecosystem.
“On any grid the main consumers are industry and manufacturing and they consume the bulk of the energy produced on the grid. We need to incentivize them to use more electricity and also electrify those demand verticals across the grid,” Khalifeh said.
In the long term, Jordan’s dependency on imported energy would be significantly reduced. The shift to green energy releases government funds trapped in fossil fuel imports; funds that can be spent to resolve more pressing domestic issues.
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