Nepco

COMPANY PROFILE

2015

National Electric Power Company

www.nepco.com.jo | +962 6 585 8615

A more sustainable future?

Editorial: Rosie DeWinter

Currently importing 97% of all its energy needs, Jordan has set an impressive target to achieve a 1.8 GW of renewable energy capacity by 2020 and with the Jordanian Government awarding 200 MW of solar and wind energy capacity to project developers earlier this year, this target now seems more attainable than ever before…

Established in 1967, Jordan’s publicly owned power transmission company, NEPCO, was set up to take over the power generation, supply and meet the needs of the customers, establish transportation networks and export energy.

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Looking to increase its energy independence – Jordan currently imports 97% of its energy needs – it plans to reduce this to 60% and increase its renewables contribution to the country’s energy generation mix by 10% by the year 2020.

Approximately 92% of the

sector is dependent on fossil fuel sources (oil and natural gas), while electricity demand is expected to grow by 5.5% per annum until 2020.

There’s no doubt as to the potential that Jordan holds, with an estimated 330 days of sunshine a year and wind

National Electric Power Company speeds reaching heights of 11.5 meters per second in the hilly areas, solar and wind energy is starting to make its mark in the country.

Earlier this year, the Jordanian government awarded 200 MW of solar and wind energy capacity, which has set the stage for many more renewable projects in the pipeline to meet the target set up of achieving 1.8 GW renewable energy capacity for 2020.

There is currently less than 2 MW of wind energy installed and operating in Jordan, though the Government has set goals for 7% of all generation being sourced from renewables by this year and increasing that to 10% in just five years’ time.

CURRENT RENEWABLE PROJECTS The largest photovoltaic (PV) facility in the Middle East – the 52.5 MW Shams Ma’an Project in a Power Purchase Agreement (PPA) signed between NEPCO and the project developers, plans to sell electricity at a tariff below other solar projects in the country normally selling at US$0.169 per kWh, for US$0.148 per kWh when it is completed in 2016.

The project, due to start construction this year, will be jointly developed by Qatar’s Nebras Power, Diamond Generating Europe (a subsidiary of Mitsubishi Corporation), both with 35% stake and Jordan’s Kawar Group with 30%. In a

financial agreement that has been signed for 20 years, it will be jointly overseen by a number of companies including; Japan for International Corporation (JBIC), Nippon Export and Investment Insurance (NEXI), Mizuho Bank and Standard Charter Bank.

US based company, First Solar, were awarded the EPC contract for the Shams Ma’an project to provide the advanced thin film photovoltaic modules and finalized a long-term operations and maintenance contract for the project.

In a statement, Ahmed S. Nada, Vice President for the Middle East at First Solar explained the benefits of this power plant: “Shams Ma’an

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has already established a new benchmark for the independent production of renewable energy in the region, demonstrating how the selection of the right technology and service providers creates considerable value, which, in turn, helps attract experienced institutional investors.

“We are proud to have been given this opportunity to leverage our industry-leading expertise in project development to create a truly remarkable

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“Renewable energy projects are very important in Jordan as they rely on readily-available local sources”

renewable energy asset. We now look forward to delivering a world-class power plant that will directly contribute to efforts to address the country’s urgent energy needs.”

Labelled as Stage 1 of the Jordanian Government’s plans for several new renewable projects, the Jordanian Ministry of Energy and Mineral Resources have now approved 12 PV projects of varying sizes with a total installed capacity of 200 MW and two wind power

National Electric Power Company projects. More tenders are expected to be awarded in the future by Jordan in a bid to meet its target to install 600 MW solar PV capacity and 1,200 MW of wind energy capacity by the year 2020 in an effort to reduce the country’s dependence and reliance on fossil fuels.

With a proposed generation of 117 MW, the Tafila Wind Farm, is to built, owned and operated by Jordan Wind Project Company (JWPC). Among the country’s first utility scale wind farms, the power generated will be supplied directly to NEPCO. Last month, H.E. Mohammad Hamed, Minister of Energy and Mineral Resources, checked the status of the construction work at the power plant in Tafileh, 180km southwest of Amman, which is expected to be commercially operational at the end of this year.

The Tafila wind project is sponsored by EP Global Energy (EPGE), Inframed Infrastructure, and Masdar Power with financing arranged by the International Finance Corporation (IFC) and with participation from the European Investment Bank (EIB), the Export Credit Agency of Denmark (EKF), the OPEC Fund for International Development (OFID), the Dutch Development Bank (FMO) and Capital Bank of Jordan.

SOLARTECH JORDAN 2015 CONFERENCE Taking place at the beginning of February in Amman, the conference was held to explore further opportunities into renewable energy projects and presented the country’s plans and incentives within the renewable energy field. With

its strong strategic location and political stability, Jordan is certainly an attractive investment within the renewable energy field.

With the current projects – the wind project in al-Tafila and the Shams Ma’an project – the conference aimed to form partnerships and joint ventures within the renewables field.

Kamal Hendi, one of the conference’s organisers explained: “We are here today to introduce the investment climate in Jordan in this field.

Investors from most European

countries, as well as officials from all sectors to whom we can present investment opportunities in Jordan, are here at the conference.”

As one of the first Arab countries to make this leap into renewable energy and introduce incentives, customs exemptions and tax breaks for revenue from renewable energy projects, Hendi added: “Renewable energy projects are very important in Jordan as they rely on readily-available local sources.”

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SHALE SUCCESS In addition to the renewable energy plans already in the pipeline – Jordan has invested in shale gas, signing a US$2.2 billion build-operate-transferdeal, in a bid led by Estonia’s Enefit.

Jordan’s Natural Resource Authority estimates a total of 70 billion tons of commercially viable shale oil available, making it the fourth largest shale oil field power plant in the world, following Narva in Estonia.

This project will stand as the

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country’s very first oil shale power plant, with plans to have it built and up and running by as early as 2018. A 470MW plant, with construction starting this year, it is hoped to add 20% to Jordan’s total energy needs, cutting the energy bill by an estimated $500 million a year.

An evidently financially viable investment – the electricity produced will be purchased at half the current market price – the shale power plant is set to create 3000 jobs with a further 700 in place for the ongoing

commitments and operations.

The Jordanian Government is set to receive royalties of $2.11 per to – amounting to an exponential $21 million on a yearly basis – the plant is expected to consume 10 million tons of shale oil every year.

JORDAN’S RENEWABLE FUTURE? Iad Jibril, Director of Renewable Energy at the Ministry of Energy and Mineral Resources said at the conference: “The year 2015 will see the implementation of several renewable energy projects with a capacity of 500 megawatts, this will create many job opportunities for young Jordanians.”

Director of the Jordanian

National Electric Power Company Environment Society, Ahmed al-Kofahi, emphasised the importance and necessity of the government’s increased interest to implement further renewable energy projects in the coming years: “Renewable energy, whether from wind or solar power, is abundant in Jordan, which has more than 300 days of sunshine a year and there are many areas in Jordan suited to producing energy from wind.”

“We are all for energy that is green, renewable and ecofriendly. There is high demand

“Renewable energy, whether from wind or solar power, is abundant in Jordan, which has more than 300 days of sunshine a year and there are many areas in Jordan suited to producing energy from wind”

not only from large companies but also from homes, schools, hospitals and small companies which have started installing these systems for their electricity supply,” al-Kofahi added.

W ith two renewable energy projects underway and the Jordanian Government issuing plans for more in the following years, the future for NEPCO and the power generation of Jordan looks set fir itto reach its target to achieve 1.8 GW renewable energy capacity by 2020

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