Analysis - Jordanian wind energy sector gets legislative fillip

JORDAN: Jordan's wind energy sector has received a major boost with the passage of a long-awaited renewable energy and energy-efficiency law.

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The legislation sets out a legal and regulatory framework for meeting a growing proportion of its energy needs from renewables by 2020, including initiatives to attract private finance.

Unlike many of its middle-eastern neighbours, Jordan has little in the way of oil or gas reserves. Imports account for around 96% of Jordan's energy needs, at a cost of more than 20% of its gross domestic product.

In 2007, Jordan adopted a national energy strategy to reduce its reliance on imports, cut bills and diversify its energy mix. While the strategy provides for Jordan's first nuclear power plant, in the short to medium term, it is counting on renewable energy to help plug the gap. The target is for renewables to meet 7% of the country's energy needs by 2015 and 10% by 2020 - around 600MW-1GW of wind by 2020.

The new law requires the energy ministry to evaluate the resource and draw up a registry of sites offering opportunities for renewable energy projects. The ministry can then issue competitive tenders for sites on the registry and negotiate directly with companies submitting unsolicited proposals for sites anywhere in the country. This should reduce time taken to get projects off the ground and allow greater flexibility during the development stage, the government believes.

For unsolicited approaches, the company must state its proposed fixed electricity price and the ministry must decide in six months.

Under the law, the state-owned National Electric Power Company (NEPCO) is obliged to cover the cost of grid connection for all renewable energy plants and buy all the electricity generated. The law also confirms various incentives, including rent-free access to public land and complete tax exemption for locally manufactured equipment.

Renewables fund

It also provides for the creation of a renewable energy and energy-efficiency fund, which will meet the difference in cost between green power and conventional generation. Prospective investors from within or outside Jordan will be able to apply to the fund. It will be jointly financed by international donor agencies and the Jordanian government, and managed by an independent body comprising officials from the planning, finance, environment and energy ministries, plus three representatives from the private sector. The government has set aside JOD20 million (EUR20.5 million) to support the fund. This is in addition to $3.4 million (EUR2.47 million) from the World Bank via its Global Environment Fund (Windpower Monthly, October 2008) and EUR1.56 million pledged by France.

Up and running

Jordan has just two pilot wind power projects turning so far, totalling 1.45MW, which were built in the 1990s. Last year, however, the government awarded a 30-40MW project at Al Kamshah, north of Amman, to a Greek-Jordanian consortium led by Terna Energy, one of Greece's major wind owner-operators (Windpower Monthly, May 2009). It was due to come online this year, but negotiations have stalled over the electricity purchase price.

In the meantime, the government shortly expects to issue a request for proposals for the right to build, own and operate a 70-90MW facility near Al Fujeij, south of Amman. A total of 16 candidates made it through the first round of bidding. NEPCO will buy the output under a 20-year power purchase agreement. Completion is planned for 2011.

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