Key fact

Jordan has plans to derive 10 per cent of all generation from wind and solar energy by 2020

Source: MEED

Jordan’s Ministry of Energy and Mineral Resources (MEMR) had a difficult year in 2010 and an even more challenging start to 2011. An attack by sabateurs on the Arab gas pipeline supplying gas from Egypt in early February, left the kingdom with a shortage of much-needed gas for its power stations.

Although repairs were scheduled to be completed by mid-February, the kingdom’s power plants were kept running in the interim period after Jordan’s Minister for Energy and Mineral Resources, Dr Khaled Toukan, visited the country’s Petroleum Refinery Company to instruct it to work with the National Electricity Production Company (Nepco).

Jordan’s power ambitions

The issue highlighted the kingdom’s vulnerability to fuel supply disruption and gives impetus to Amman’s plans to diversify its energy mix. Nuclear energy tops the list, followed by a drive to increase solar and wind energy production.

To date, the construction rate of traditional power plants has struggled to keep up with peak demand. During the summer of 2010, power demand peaked at over 2,668MW, surpassing the country’s installed capacity of 2,600MW and leading to the shutdown of parts of the network for up to an hour at a time. Just 12 months earlier, peak demand rose by only 3 per cent to 2,320MW, but an August heatwave pushed this up to 15 per cent.

This creates a challenge for MEMR as its current forecasting is based on a lower peak demand growth of 7.5 per cent and will see it hit 5,200MW by 2020. However, at the 15 per cent growth rate, more than 8,000MW of capacity is required during the same period.

Jordan is only just managing to stay ahead of demand thanks to the delivery of power from its first two independent power projects (IPPs). The first is the 370MW Al-Manakher plant, which was commissioned by Dubai-based AES Oasis with Japan’s Mitsui & Company in August 2009. The second IPP, at Quatraneh, is under construction by a Korea/Saudi Arabia joint venture of Korea Electric Power Corporation and Xenel Industries. The first combined cycle phase began contributing an additional 240MW at the end of 2010 and a second 130MW phase is due to come online in August 2011.

Tenders for a third and fourth IPP are expected to close in late March. Nepco project manager, Ahmed al-Dohni, says pre-bid meetings were held on 8-9 February. IPP3 is located in the Amman East area and will deliver 500-600MW, with a base load of about 300-350MW. IPP4 is a limited tender for 200-250MW and is only open to existing generation companies.

Jordan’s power projects
Project Status Power capacity (MW) Cost ($m) Contract type
Amman East (IPP3) Six prequalified firms to bid by 24 March 300-500 450 IPP
IPP4 Limited competition for existing generator; bid deadline 24 March 200-250 tbc IPP
IPP=Independent power project; tbc=To be confirmed. Source: MEED

IPPs are only part of the energy security strategy, however. The most significant project planned is the 1,000MW nuclear scheme. The Jordan Atomic Energy Commission has appointed Australia’s WorleyParsons to investigate its plan. A fundamental part of the strategy is Jordan’s ownership of significant uranium reserves. The first mining contract was awarded in February 2010 to a joint venture of Jordan’s mining arm Jordan Energy Resources with French nuclear giant Areva. A year on and the kingdom has also signed a nuclear power deal with Turkey. The agreement follows similar partnerships with Spain, Argentina, Canada, China, Russia, South Korea and the UK.

Jordan is also pursuing renewable energy plans, with ambitions to derive 10 per cent of all generation from wind and solar energy by 2020. To secure more international support, the country has updated its legislation to make its energy sector more attractive. The Renewable Energy Law was enacted in January 2010 and allows private companies with renewable generation projects to negotiate directly with the Energy Ministry, bypassing the need to hold a competitive tender. It also obligates Nepco to purchase this power at a fixed tariff.

Water resources in Jordan

At present, Jordan does not have any desalination capacity, but facilities providing as much as 930 million cubic metres per annum are planned as part of the controversial Jordan Red Sea Project. The scheme proposes to move 2,150 million cubic metres from the Red Sea and discharge 1,220 million cubic metres a year into the Dead Sea, with the remainder used for desalination and hydropower generation.

Provision of water resources is a challenge for Jordan and explains why the kingdom is investing $950m in the 325km Disi-Amman conveyor. The aquifer, which runs beneath Jordan and Saudi Arabia to the south, will begin providing water to Jordan’s capital in 2013.

Jordan urgently needs to diversify its fuel reliance away from imported oil and gas and bring desalination into its struggling water supply system. However, financial constraints are a major issue for the kingdom, which has implemented a series of tariff increases to boost income. Support from international lenders, donors and investors will be critical in delivering its plans.