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Why Jordan’s ambitious green energy needs to continue

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Green energy lowers pollution and greenhouse gases, realizes substantial savings in imported fossil energy, reduces air-pollution related illnesses and creates high end jobs.(Photo: Freepik)
AMMAN — The shift to renewable energy in electricity production is an inescapable destination globally, and Jordan is no exception. Green energy lowers pollution and greenhouse gases, realizes substantial savings in imported fossil energy, reduces air-pollution related illnesses, and creates high end jobs.اضافة اعلان

In 2007, Jordan embarked on an ambitious plan to effectively support the emergence of its renewable energy industry, introducing supportive regulations and financial incentives to local and foreign investors. 
The initiative worked wonders as many investors, backed by international financial institutions, opened their wallets and went to work. Stakeholders in Jordan’s private sector set up the EDAMA association in 2009 to support Jordan’s budding green economy.

In retrospect, “the speed at which the Jordanian private sector invested in the renewable energy surprised the government”, Tareq Khalifeh, board member at EDAMA, told Jordan News.  

“We ranked first in the Arab world and third worldwide in terms of growth levels and in a few years we were even being tapped for talent and expertise,” he added.  

The emerging renewable industry also encouraged universities and schools to introduce classes and specialization in green energy and technology.  Jordanian investors went on to build solar and wind farms to feed into the national electricity grid. 

“We saw close to $1 billion invested by 2015,” Khalifeh added. 

Incentives by government included an agreement between renewable energy producers and the national government-operated electricity distributor NEPCO, which would pay for every green kilowatt produced, regardless of whether the capacity produced is being used on the grid. 

Jordan’s green shift strategy stalls 

According to Khalifeh, adopting the green energy plan worked quite well in its first two phases, but the third important component has not been implemented.  

“Our adoption of green energy is a success story and no one can argue that. We have gone through two successful rounds in the ambitious national renewable energy strategy, introducing financial incentives and upgrading regulations, which brought in ample green investments. But the third and most important round, which would see our grid upgraded, has not happened yet,” Khalifeh said.

A grid upgrade implements advanced technology and installs batteries that store electricity when demand is low for peak usage. The plan should also phase out conventional electricity generation systems, replacing them with green energy, explained Khalifeh.  

The failure to implement the third important round means government (tax payers really) would pay for any of the unused renewable energy capacity that is produced.

“It is a lot of wasted energy,” he added.

Khalifeh, an industrial engineer, is the managing director at (MASE) Modern Arabia Solar Energy, which owns and operates two independent renewable energy projects and manages the operations of others in Jordan and the UAE. 

 MASE has two renewable energy producing setups: Al-Safawi Arabia Two Solar PV Plant, with a capacity of 51 megawatts, and Arabia One Solar PV with 11.52 megawatt.

“Investment in renewable energy sources realizes sustainable revenues; it is a profitable business but it does not bring double-digit returns,” said Khalifeh.
The solution that he suggests for fully utilizing the produced green energy in Jordan is for NEPCO to gradually phase out reliance on conventional electricity production. The government, he said, should encourage demand for clean electricity, such as removing taxes on electric vehicles and home batteries, as well as encouraging industries that tap green sources of energy. 
“Instead of retiring old fossil-based electricity plants, replacing them with solar and wind energy producers, they kept the former going, switching them off and on depending on demand patterns,” said Khalifeh.

“That’s not how it is done in developed markets and there are available technologies that manage these processes until the conventional sources of energy are phased out,” he added.

The impact of a dumb grid 

About 70 percent of the renewable energy projects in Jordan are by international investors. Jordan’s green energy ecosystem attracted equity participation and project finance debt from such institutions as the World Bank, EU Bank, and other international development banks. 

Not being able to absorb the produced capacity of renewable energy domestically has posed serious financial burdens on NEPCO, which still pays for every green kilowatt produced. 

“Jordan has to honor its agreements with all investors in renewable energy. You do not mess with international investors because it will expose you financially and it has severe reputational consequences,” Khalifeh said.  

The international investors in Jordan’s green electricity sector include Saudi Arabia’s ACWA Power, Norwegian Scatec, Spanish-Saudi FRV, and UAE’s MASDAR, which invested in the largest solar power plant. 

Khalifeh believes government will soon continue the journey forward, delivering what is promised for the grid upgrade. Jordan, he said, does not really have other alternatives but to continue developing its green initiative, especially after pledging to meet pollution targets at COP25 in Spain.

COP25 is an initiative by the United Nations Framework Convention on Climate Change (UNFCCC), which aims to develop cooperative strategies to reduce greenhouse gas concentrations to prevent the dangerous impact of climate change.

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