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Energy strategy 2020 — 2030

Jul 20,2020 - Last updated at Jul 20,2020

This is a brief review of Jordan’s National Energy Strategy2020 — 2030. Energy is one of the most important mainstays of the Jordanian economy and society, an important determinant of people's social and economic well-being, and a potentially great source of income for the Treasury. Therefore, it is important to clarify some ambiguities in the strategy in order to be precise when dealing with the numbers and aspirations they refer to.

For instance, when the strategy proposes reducing carbon emissions by 10 per cent by 2030, it does not define 10 per cent according to which reference year of emissions. The European Union, for example, plans to reduce emissions by 40 per cent in 2030 compared with those of 2012. In Jordan, however, the situation is ambiguous, perhaps because the amount of equivalent emissions decreased in two years, from 26,571 kt in 2014 to 25,107 kt in 2016, according to World Bank reports. Hence, determining the reference year is an important issue. Perhaps one of the reasons for this positive decrease is the drop in the use of heavy fuel for electricity production, from 1334 units in 2015 to 344 units only in 2016, after the floating natural gas port at Aqaba became operational in May 2015.

As for improving energy efficiency in various sectors, the strategy recommends a 9 per cent improvement by 2030, compared to 2018 levels. To clarify how modest this ambition is, one does not need to cite examples from advanced industrial countries, but from neighboring Turkey, which budgeted $11 billion to improving energy efficiency over the next five years, with the goal of reducing basic energy consumption by 14 per cent. This will eventually result in reducing carbon dioxide emissions by at least 66 million tonnes. Jordan’s strategy remains silent on the budget, which Jordan plans to spend on this hardly ambitious limit.

As for the government’s plan to increase renewable energy’s share of the entire energy mix from 11 per cent in 2020 to 14 per cent by 2030, it is obviously an ambition so limited that it will negatively affect hundreds of companies that have invested in this sector. It will also come as a surprise to the world that praised Jordan for being the second Arab country in renewable energy share, after Morocco. Jordan achieved a remarkable breakthrough in the period 2015-2020 by raising renewable energy’s contribution from 2 per cent to 11 per cent, so it is legitimate to ask why the new strategy aspires only to add 3 per cent in the coming decade. 

What will make it even more difficult to increase investment in renewable energy is the mandatory inclusion of storage units for electrical systems, which will raise the total initial cost of projects and hence limit investment. When installing storage systems on dual metres net measurement and transit projects, the basic benefit will go to the distribution company in the first place, because it will receive electricity at peak hour, which it can sell directly to consumers.

 So, why has the strategy limited local sources of renewable energy and oil shale? The rate of 15 per cent oil shale contribution to electricity generation in 2020, and remain as such until 2030.

No doubt, it is signing the gas agreement with Noble Energy committing to fifteen years of supply, which obviously restricts the expansion of renewable energy, oil shale, and domestic gas explorations, despite the recommendation in the strategy of leaving explorations ongoing. This approach raises questions about the legitimacy of the basic scenarios defined as guidelines by the strategy, which are "increasing sustainability and self-reliance"! How can sustainability and independence be consistent with the decline in renewable energy momentum and the stabilisation of oil shale production? Are not they sustainable and self-reliant local resources? And does not the strategy recommendation of "attracting companies to invest in oil shale" become void of meaning, as long as the contribution rate remains the same?

One positive element in the strategy is the removal of nuclear energy’s share from the energy mix. Nuclear energy has been a controversial issue that met relentless opposition since 2008. Hitherto, since it has become clear that the current surplus of electricity production capacity costs the Treasury hundreds of millions of wasted dinars in “excess capacity charge”, those who fiercely defended the introduction of nuclear energy should try to imagine the disaster that would have happened if the promise to produce nuclear electricity by 2016 was fulfilled! However, opponents of the nuclear energy project suffered considerable adversity in defence of their cause, but even now their happiness is not complete. The strategy recommends retaining the Jordan Atomic Energy Commission, which now has the task of conducting an economic feasibility study by 2030. This implies maintaining its independence instead of merging it under the Energy and Mineral Recourses Regulatory Commission for more efficiency and agility.

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