Jordan’s Energy & Mineral Resources Ministry has experienced first hand this summer the growing challenges posed by the kingdom’s electricity sector. An August heat wave saw peak power demand surge by an unprecedented 15 per cent. With installed capacity insufficient to meet the rocketing demand, residents had to put up with load shedding of up to an hour at a time – an unpopular move during periods of high temperatures.

Disrupted supplies

Before the 2010 summer, outages had largely been caused by technical faults at ageing power stations rather than a lack of generating capacity. In 2009, when peak power demand rose by just 2.6 per cent, breakdowns at the Risha and Al-Hussein power stations disrupted supplies and proved expensive for the Central Electricity Generating Company (Cegco), with maintenance work costing an estimated $10m.

Renewables are targeted to meet at least 10 per cent of generating capacity by 2020

Even before the events of the summer, Jordan was aware of the need to invest in new capacity and upgrade its network. As it has done on two previous occasions, Amman has turned to the private sector to boost generating capacity. A request for qualifications was issued in September for the country’s third independent power project (IPP) at Amman East by transmission company National Electric Power Company (Nepco). The plant, which will use heavy fuel oil as primary feedstock with natural gas as a back-up, is expected to generate 300-350MW of base load power and a further 200-250MW as peaking capacity.

Amman East will follow in the footsteps of the 400MW Al-Manakher plant, which was commissioned in August 2009 by private developers Dubai-based AES Oasis and Japan’s Mitsui & Company. A second IPP at Al-Qatraneh is under construction by a joint venture of Korea Electric Power Corporation (Kepco) and Saudi Arabia’s Xenel Industries. First power of 240MW is expected by the end of 2010 and will be followed by a further 130MW in August 2011, which will go some way to ensuring that a repeat of the load shedding experienced this year will not occur.

Private sector involvement extends beyond IPPs. In 2007, the government sold a 51 per cent stake in the kingdom’s largest generator, Cegco, to a consortium of Jordan Dubai Energy, Malaysia’s Malakoff and Athens-based Consolidated Contractors International Company (CCC). Cegco with more than 1,700MW of capacity provides more than 70 per cent of Jordan’s total installed power generation.

Conventional power generation, largely dependent on imported fuel, will not meet the country’s demand needs alone and other options are being pursued as part of the kingdom’s National Energy Strategy.

Jordan is already a regional leader in the development of renewable energy. Renewables are targeted to meet at least 10 per cent of generating capacity by 2020, through the installation of 600MW of wind capacity and a similar amount of solar. All renewable capacity is expected to be built with private-sector help. Like other countries in the region faced with limited fuel options, Amman is considering nuclear energy. Plans for a 1,000MW nuclear power station are being pursued by the Jordan Atomic Energy Commission. It has appointed Australia’s WorleyParsons to study plans for a nuclear reactor 25 kilometres from Aqaba.

Preliminary study results released in May suggest the site is geologically suitable for development of the power station, which would be fuelled using locally sourced uranium. The first mining concession was awarded in February 2010 to a joint venture of Jordan Energy Resources and France’s Areva for the uranium-rich area, known as the central zone. Under the plan, any locally mined uranium will be sent abroad for enrichment.

Foreign investment

As with all Jordan’s power projects, the fate of its nuclear ambitions is likely to rest on Amman’s ability to attract international capital. Private finance is expected to prove difficult to secure, leaving the onus firmly on bilateral or multilateral funding sources.

Unusually for the Middle East, the private sector is heavily involved in distribution. In 2007, a consortium of local and Gulf investors, Kingdom Electricity Company, bought state shares in Electricity Distribution Company, Jordan’s largest distributor, and Irbid District Electricity Company. The sale left just Jordan’s transmission business under state control. Operated by Nepco, the grid comprises 2,200km of 132kV and 890km of 400kV line. This network connects to Egypt under the Gulf of Aqaba and in the north to Syria using 400kV connections.

The upgrading and expansion of the transmission and distribution network is needed not only to replace old infrastructure but also to handle the increasing loads on the network. In 2008, substation capacity increased by 7.6 per cent and transmission lines by 13.6 per cent and similar rates of expansion will be required in the years ahead if Jordan is to deliver increasing electricity to its population.