RENEWABLE ENERGY IN JORDAN What had to be done 8 Oct 2017
Structure of Electricity Sector Generation & Policy Maker Regulator Power Transmission Distribution Producers Ministry of Energy & Mineral Resources (MEMR) Electricity Regulatory Commission CEGCO NEPCO JEPCO SEPGCO IDECO IPPS EDCO Interconnection
Renewable Energy in Jordan What did it take 2006-2008 2010 2010 2011 2012 Trials from Private sector In vain Discussions on RE law started An NGO EDAMA established to Lobby for energy- Water and Environment sectors Arab spring Gas pipeline Cuts and Jordan reverted to heavy fuel oil electricity costs increased and government deficit in electricity reached 2 billion JDs per year 2012-2014 Issuance of renewable energy Law
Types of Renewable Energy Projects in Jordan On-Grid Small Roof Top Projects (Net metering) Homes, Small institutions Medium size projects (Net metering, wheeling) Government Tenders (EPC) (Maan wind 65-75, Qatraneh Solar 65-75) Utility scale projects (Direct Proposals) (Build, own and operate basis )
Important dates for Renewable Energy in Jordan FEB 2012 Issuance of the Renewable Energy law (No. 13) March 2012 May 2012 November 2013 January 2013 June 2013 December 2013 January 2014 Directive for connecting RE facilities to the distribution system for direct proposals and tenders, pursuant to article 9/B of RE law. Directive governing sale of electrical energy generated from RE systems, pursuant to article 10/B of RE law (Net Metering) Reference pricelist, pursuant to article 2 of RE law Guide to connect RE systems (Net Metering) Regulation to exempt RE and EE systems (no.10), pursuant to article 11/B Electricity wheeling directives, pursuant to article 17 of RE law Signed First PPA Wind Project in Tafileh 117 MW Guide to connect RE (Wheeling)
Direct Proposals for Utility scale projects Under EOI-1 For RE in Jordan 64 companies expressed interest 34 companies were qualified 29 companies signed MoUs 9 Wind projects (proposals due Q1 2014) 20 Solar Projects 2 CSP Projects (proposals due Q1 2014) 18 PV Projects 12 submitted detailed proposals
Direct Proposals time line EOI -1 May 2011 MEMR* published expressions of interest with Qualifying criteria and specific requirements July 2011 Developers expressed their interest according to instructions. May 2012 MEMR evaluated expressions and qualified developers End of May 2012 Developers signed MoU with MEMR (in order to prepare studies and develop a proposal in compliance with MEMR instructions) September 2012 Developers received instructions to submit proposal March 2013 Developers submitted Full direct proposals ( Technical &financial including Land ownership/lease ) to MEMR according to instructions September 2013 MEMR evaluated proposals and sent comments to developers Nov/ December 2013 June 2014 Developers negotiate /sign Agreements with MEMR/NEPCO (PPAs, connection agreement, government guarantee etc) Developers seek Financial closure Starting beginning 2015 Execution and commissioning
Utility Scale Projects (Direct Proposals) Build, Own and Operate basis Drivers For Investors Facilitating regulatory environment Very feasible projects New investment opportunities 20 years PPAs For Government Cost per KWh of generation is less than generation from any other resource (as long as the resource is heavy fuel oil) Green- Clean energy More energy security and independence. Reducing fuel imports Attracting foreign direct investments Creating job opportunities Diversifying types of energy resources
Utility Scale Projects (Direct Proposals) Build, Own and Operate basis Challenges Slow process: it took 3 years from issuing law to first Utility generating electricity. Government changes the rules Limited grid capacity High competition For wind projects, limited land and measurements
Small Roof Top Projects (Net metering) Homes, Small institutions Drivers Regulations allowed subscribers to produce 100% of their average annual consumption Law exempted from taxes all Renewable energy systems from Home subscribers who consume over 700 Kwh Per month, start paying 23-29 piasters (0.32 -.41 $ ) per Kwh, they need to reduce their bills Banks are financing Renewable energy projects with very good terms ( 10 years payback, 4-6% interest rate)
Small Roof Top Projects (Net metering) Homes, Small institutions Challenges Homes: Roof tops in Jordan are almost full with Water tanks and Satellite dishes, prohibiting consumers from installing Rooftop systems Small consumers : have no incentive, while they are the most subsidized by the government Industry : Electricity Tariff for small industries is low ; 9 piasters per KWh (.126 $ cent), hence ROI is not tempting. Farms connected to Electricity Grid have no incentive as they pay 6 piasters per KWh (0.085 $ cent), only off- Grid farmers might be interested as Solar systems proved to be feasible. Distribution companies: limited Electricity grid capacity Loosing their highly paying subscribers (conflict of interest)
Medium Size Projects (Net metering, Wheeling) Drivers Regulations allowed subscribers to produce 100% of their average annual consumption Law exempted from taxes all Renewable energy systems from Commercial subscribers and some industries are paying very high electricity Tariff ( reaching 0.30 JDs, 0.42 $ cent per KWh) which makes the ROI around 2.5 years Banks are financing Renewable energy projects with very good terms ( 10 years payback, 4-6% interest rate) Fixing the cost for 20-25 years No risk of GOV increasing electricity Prices No risk of increasing oil prices Reducing the cost of their services and products More competitive Greening their services and products More competitive- opening new markets
Medium Size Projects (Net metering, Wheeling) Challenges Land: difficult to find a land with suitable price where distribution companies can off take electricity. Grid Capacity: limited Electricity grid capacityover which different interested parties are competing Non core business: Businesses prefer not to introduce the burden of owning a such projects so as to focus on their core business Distribution companies: No incentive for distribution companies More risk of this new comer Loosing their highly paying subscribers (conflict of interest)
RENEWABLE ENERGY IN JORDAN What had to be done 8 Oct 2017