World Bank helps Jordan with policy -- Middle East feels the breeze

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Jordan, faced with rising oil prices and rapid growth in demand for electricity, is seriously looking at renewable energy to plug the gap. Last month, the World Bank Global Environmental Facility (GEF) lent its support to Jordan's ambitions by approving a $6 million grant to help realise its new policy.

According to Jordan's national energy strategy, it could get 10% of its energy from renewables by 2020, with 600 MW coming from wind. The country has good winds, registering average annual speeds in excess of 6.5 m/s in some areas. A Japanese-funded study indicates a potential resource of over 4 GW.

Yet, despite the potential, renewables make up only 17 MW of a generating base of about 2100 MW, derived largely from imported oil and gas. Jordan has just two pilot wind projects, operated by the Central Electricity Generating Company, the largest of three distribution companies: a 320 kW plant at Al Ibrahimiya and 1.125 MW at Hofa, both in the north. Now, however, it is giving new impetus to a number of projects that have been under consideration for some years.

Back in December, the energy ministry called for tenders for up to 40 MW of wind at Kamshah, near Jerash, on a build, own and operate basis (BOO). Of the eight shortlisted companies, only Terna Energy from Greece and Russia's Inter Raoues submitted final bids, which are now being evaluated. An announcement is expected in the next month or so. A second tender call is expected by the end of the year for a 60-70 MW installation at Al Fujeij, near the southern town of Shobak, possibly to be followed next year by a call for 50 MW at Wadi Araba, near Aqaba, also in the south. Feasibility studies are underway for up to 200 MW at Al Harir, near Tafileh, and 150 MW near Maan.

Support for this and other activity will come from the GEF grant. Its aim is to help create a "sustainable wind power market" in Jordan by removing obstacles such as higher generation costs, lack of institutional capacity and inadequate information, and by promoting private sector involvement. Of the $6 million, $3.4 million will go towards establishing a renewable energy and efficiency fund to support the difference in cost between wind generation and conventional means, to which the Jordanian government will also contribute.

A further $1.4 million will be spent on technical assistance, $1 million on feasibility and impact studies and on supporting the projects at Al Fujeij and Wadi Araba, and $200,000 on developing a market for renewable energy. One of the first steps will be to get the Al Fujeij plant up and running as a model to encourage private sector investment and reassure financiers. The intention is that it, too, will be built as a BOO project, with a mix of local and foreign capital, and will receive support from the renewable energy fund.

Another vital piece of the jigsaw is to establish a sound legal and regulatory framework. To this end, a draft renewables law is expected to go before parliament before the end of the year. It seems likely it will provide for competitive bidding to set purchase prices and for various incentives such as tax breaks, use of public land and free grid connection.

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