By Alison Ebbage

Solar energy generation has massive potential in Jordan. The government has big plans for development stemming from the desire to reduce dependence on expensive energy imports and satisfy growing demand for energy. But within the CSP industry questions remain over which projects will be successful and whether the government will act to financially incentivise the industry at all.

Indeed in its 2007 Energy Strategy, the Government of Jordan, set ambitious goals for the share of renewable energies in primary energy supply to increase from the current 1% to 10% by 2020. The planned installed capacity should amount to 300MW – 600MW (CSP, PV and hybrid power plants) by 2020.

A number of single targets have been set, such as for wind power (installation of about 1200 MW), solar power (600 MW) and solar water heaters (share of 30% by 2020), in addition to waste/energy (30-50MW).Most importantly, the Renewable Energy and Energy Efficiency Law was enacted in February 2012 which allows unsolicited or direct proposal submission. Effectively investors and developers are free to identify and develop renewable grid-connected electricity production projects such as wind parks, solar systems or others on their own and propose these to the Ministry of Energy and Mineral Resources.

The MEMR’s (the Ministry of New and Renewable Energy) has requested expressions in interest and five CSP projects have been shortlisted. All of them have already signed a memorandum of understanding (one recently requested to change technology) - meaning that they will submit concrete development plans which will take place primarily in the Ma’an Development Area. Shortlisted CSP developers have until mid-2014 to submit their final proposals and technology selections (PV projects have until May 2013 to submit their final proposals).

Firas Rimawi, advisor to the CEO at the South Company for Construction and Development, the development agency for the south of Jordan comments: “The Ma’an Development area is ideal for solar; annual DNI is 2700KWh per square meter, it is flat, making for easier construction and is well connected to roads, so making the logistics much easier. It is now up to the developers to submit competitive proposals and make this happen” he says.

And Georgio Akiki, AREVA Solar's Business Development Manager - Middle East adds: “Although the deadline is 2014, proposal submission can take place at any time. The MEMR will evaluate proposals within 6 months of submission and sign a Power Purchase Agreement within 2 months of the Notification of Acceptance,” he says.

The first CSP project announced in Jordan, Joan 1, in Ma’an, was scheduled to enter operation in 2013, however, with the new Expression of Interest Programme in Jordan this has been delayed. It is likely that the path forward for Joan 1 will decided after mid-2014 when final proposals and technology selections are submitted to government by the shortlisted developers.

But not all the proposals will come to fruition – NEPCO, the national electric power companywould struggle to connect all five projects to the national grid.
Akiki comments: “Technical constraints mean that the government will select only the best possible projects using the direct proposal mechanism to develop the targeted 1800MW renewable energy projects as per the energy strategy.”
He also cites finance as a barrier to development. “Unfortunately, attracting investment for renewable energy projects has been challenging. There are a variety of reasons for this, including unfavourable market conditions, challenges in project financing due to the financial crisis and the relatively small size of Jordan as a market for renewable energy.”

However, Jordan is a part of the MENA CSP scale-up initiative which is eligible for funding from the Clean Technology Fund (CTF). Another positive move is that the government has now published proposals for upper limits for power purchase agreements for each type of renewable energy. This will, according to Rimawi, make it easier for developers to submit proposals that are both realistic and competitive.

The Electricity Regulatory Commission (ERC) has also announced the country’s first feed-in tariff (FiT) programme. Whilst PV will receive 120 Fils/kWh, Solar (including CSP) will receive 135 Fils/kWh. It is aimed at encouraging citizens to take advantage of recent energy ministry regulations allowing consumers with renewable energy projects to sell surplus electricity back to the national grid. The policy will also offer a 15% higher tariff for locally manufactured systems for both small and large projects and will be applied to all renewable technologies, including CSP. 

Ultimately the industry must wait until the 2014 deadline before it will know how the CSP industry is likely to develop - based on which proposals are successful. Only then will it also know whether the government will provide financial incentives or whether it will need to seek international funding. For now all developers can do is ensure that their proposals are watertight and cost efficient in the hope of being accepted.

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