American Univesity of Beirut

Jordan’s Renewable Energy Experience: Successes, Challenges, and Lessons Learned

​Webinar Summary

By Audrey Azzo, Communication Intern at IFI

As part of its webinars that tackle several aspects of policymaking in Lebanon and the region, the AUB Issam Fares Institute for Public Policy and International Affairs (IFI) held on July 8, 2021, a webinar titled “Jordan’s renewable energy experience: Successes, Challenges and Lessons Learned”.  

The online seminar was moderated by Marc Ayoub, coordinator of the Energy Policy and Security program at IFI and included top scholars and practitioners in the field such as Amani Al Azzam, secretary general of the Ministry of Energy and Mineral Resources in Jordan and Vice Chairwoman of NEPCO. Al Azzam voiced her opinion from a public realm perspective, while Tareq Khalifeh, Managing Director of MASE, elaborated on the topic from a private sector point of view. Jaikishin Asnani, senior investment officer at IFC mapped the organization’s experience in Jordan since 2009 and highlighted on the main achievements and lessons learned. Amjad Khashman, Renewable Energy Market Analyst in the MENA region provided the listeners with an insight on the marketplace in terms of supply, demand, conventional assets, and grid, while Ali Ahmad, Senior Fellow at IFI shed light on the comparative window between Lebanon and Jordan.

Jordan has had severe energy supply shocks since 2010, and Amani Al Azzam detailed the path chosen by the Jordanian government to remedy the issue by moving towards Renewable Energies. Prior to that, the majority of Jordan’s energy needs were heavily dependent on fossil fuel imports. In 2012 Jordan developed the legal and financial framework for investment in renewable energy, the same agenda extended itself onto 2020 leading to the production of around two Gigawatts of renewable energies. At the moment (July 2021), 20% of Jordan’s electricity consumption stems from renewable energy. 30% out of 723 projects initiated by the Ministry of Energy and Mineral Resources focus on the benefit of the end users and consumers. Therefore, it does not come as a surprise that Jordan was ranked by Bloomberg in 2019, 1st in the MENA region and 60th for best investment in the field of renewable energy. 

In terms of challenges, Al Azzam pinpointed the limited capacity available on the national grid and the negative effect caused by the fluctuation of energy generated by the renewable sources as issues that make operation systems more difficult to manage.  In her concluding remarks, Al Azzam mentioned Jordan’s 2030 strategy that aims at diversifying energy resources, increasing local production and efficiency of energy., In her own words “Our new energy strategy (2030) aims to upgrade the electricity generated within Jordan from 20% to 31%”. 

Jaikishin Asnani went through the different partnerships and deals made between IFC and public and private entities responsible to promulgate renewable energy in Jordan. In the past 10 years, the IFC financed thirteen power projects in the country, twelve of which rely on solar, wind and thermal resources. Asnani supported Al Azzam’s argument that stipulates that Jordan created a strong contractual and legal framework to attract big investors such as the IFC.  Asnani attributed the following factors to the success of their projects: Good management, fulfillment of transmission capacity, transition from a monopoly to a competitive market and good implementation, all of which serve the sustainability of the project.

Representing the private sector and their role in this energy transition, Tareq Khalifeh’s opening remarks echoed the webinar’s aim to share a comparative perspective between Jordan and other MENA countries. The private sector collectively secured the investment of over $2 billion into renewable energy and that is outside the scope of commercial, industrial, and drilling projects. Khalifeh further claimed that the private sector had trust in the Jordanian projects as it builds a sustainable job platform and opportunities. The panelist also underscored the importance of establishing transparent and proactive relationships between stakeholders, specially between the private and the public sector. 
The challenges his company have faced throughout their journey in Jordan are multiple. The grid and capacity limitations reduced investor appetite. In addition, there has recently been a rise in popular aversion over renewable energy. Khalifeh also claimed that there exists an inconsistency across the regulatory framework, defying Al Azzam and Asnani’s outlooks on that matter. 
In terms of prioritizing criterions Tareq Khalifeh suggested ranking high dependency on renewable energy over sustainability which come in contrast to Asnani’s final words. 

Amjad Khashman emphasized the importance to concentrate on the consumer in the following steps of the Jordanian strategy. Price, according to him, is the most essential factor to shift public sentiment over renewable energy. Khashman also specified that transparency in terms of fees relating to production, transmission, and distribution can also be beneficial in this task. Gridlock on the other hand and overcapacity must be motives for market reforms and dynamic pricing mainly because the current administration should not be managing the grids the same way it has been doing so for the past four decades. In his concluding remarks, the speaker highlighted the need for energy diversification as incentives for fossil fuel generators must be maintained in the market and back-up plans must always exist in case of failure.

Finally, Ali Ahmad, who has specialized his research on the Lebanese energy sector, touched upon the fact that Jordan went through enormous public administrative reforms which ultimately benefited the transition to renewable energy. With that in mind, even if Jordan did receive the aid it needed from the international community, it also reciprocated this help with successful results unlike the Lebanese case. Ahmad also touched upon the topic of energy diversification and highlighted the fact that the administration shifted away from nuclear energy which is more costly and less beneficial in terms of environmental damage. Efficiency, he argued, is the most important priority in the implementation of energy policies yet one must be careful when adopting the market model by not over-estimating the demand. 

In conclusion, the webinar held a fruitful debate with different opinions shared and discussed across the panelists, yet all scholars and practitioners agreed on the importance of a public-private solid partnership with a focus on the consumers and the adjustments of gridlock related matters.

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