Solar energy continues to offer development opportunities in Jordan

Solar power is set to play an important role in helping achieve Jordan’s goal of having renewables meet 10% of its energy needs by 2020. Regional volatility and a lack of hydrocarbon reserves spurred the government to develop one of the most comprehensive policy frameworks for renewable energy projects in the Middle East.

Currently, the solar production base includes water heaters and air conditioning systems, while increasingly frequent investment announcements highlight the rising interest in solar power plants. These new projects are set to considerably reduce electricity costs for a host of public and private players.


Long dependent on fuel imports to meet its energy needs, Jordan has struggled to cover the costs of its rising fuel bill since disruptions to their natural gas supply from Egypt began in 2011, drastically reducing what had previously accounted for up to 80% of power generation in the kingdom. The Ministry of Energy and Mineral Resources (MEMR) reported imports of crude oil, oil products, coal and metallurgical coal increased 16.2% from 6136 tonnes of oil equivalent (toe) in 2011 to 7130 toe in 2012, peaked at 8283 toe in 2014, and moderated to 6955 toe in 2015 and 5705 toe in 2016. The cost of consumed energy rose from JD4bn ($5.67bn) in 2011 to JD4.6bn ($6.53bn) in 2012, before moderating to JD4.1bn ($5.76bn) in 2013 JD4.5bn ($6.32bn) in 2014. According to the latest MEMR data, energy costs in 2014 were equivalent to 17.6% of GDP and 27.7% of imports. Rising fuel costs led to losses for the kingdom’s sole national electricity buyer, the National Electric Power Company (NEPCO), and budgetary constraints prompted the government to raise electricity tariffs as of 2014, while simultaneously seeking alternative energy sources to reduce import dependency. Authorities also overhauled the kingdom’s independent power plant tender model in 2010, developing and implementing a direct proposal scheme to offer developers greater flexibility in choosing sites, technology and project specifications.

Early Successes

Although the first project developed under the direct proposal scheme was the 117-MW Tafila Wind Farm, which was financed by the World Bank’s International Finance Corporation (IFC), it is solar projects that have driving force in the renewables sector, with the country’s solar intensity equivalent to 5.5 KWh per sq metre per day. Additionally, solar photovoltaic (PV) power projects are employing increasingly simpler technology and thus achieving faster construction times. Launched in 2008, Jordan’s Renewable Energy and Energy Efficiency Programme included plans to develop 600 MW of new solar power projects by 2020, with the government signing 12 power purchase agreements (PPAs) expected to generate a combined 210 MW during the first phase of project tendering, in what the IFC described as the largest solar PV initiative in the region.

Tariff Reform

In the first phase of renewables development, the government offered solar projects a fixed feed-in tariff set at 16.9 cents per KWh in an attempt to encourage participation. The recently opened Shams Ma’an solar project was developed under a power purchase agreement tariff of 14.8 cents per KWh. The second phase, launched in 2013, originally kept the old rate in place, but in 2015 Jordan’s renewable tariffs framework was overhauled to open four planned solar projects to competitive tariff bidding in response to the demand for solar investment. The second round of tenders received a record number of proposals – 33 in total – offering some of the most globally competitive tariffs with bids ranging from six to 14 cents per KWh with all winning bidder tariffs coming in at less than 11 cents per KWh.


In January 2016 the MEMR announced it had increased its 2020 solar generation target to 1000 MW as a response to the increasing capacities of solar projects. Earlier, in December 2015, Abu Dhabi’s Enviromena Power Systems and Spain’s TSK announced the construction of a $128m 120-MW solar facility, while ABB and Martifer Solar announced plans for a 50-MW facility in January 2016. In March 2016, Saudi Arabia’s Acwa Power International acquired Sunrise Solar PV. Acwa had won a tender to develop a 50-MW solar plant in Mafraq as part of a larger 150-MW solar complex as well as having acquired a 20-year PPA with NEPCO. Both were included in the acquisition.

More recently, in October 2016, Abu Dhabi-based Masdar signed a PPA with NEPCO to develop a 200-MW solar power plant in Jordan. On completion, it will power an estimated 110,000 households, reducing annual carbon dioxide emissions by 360,000 tonnes.

Steady progress continued into 2017 with Masdar announcing in January that the IFC was selected to oversee financing for its 200-MW solar plant. Together with the Tafila Wind Farm, the facilities will account for 18% of total renewable energy capacity by 2020.

In May 2017 the government launched phase two projects, including two Mafraq stations being developed by Spain-based Fotowatio Renewable Ventures, set to offer a combined capacity of 133.4 MW at a cost of $180m. The plants are expected to come on-line in the second quarter of 2018. In that same month the government launched 12 planned PV power stations valued at JD400m ($564.3m), which will offer a combined capacity of 200 MW. Among these is a solar thermal park in the Maan Development Area, which will offer 170 MW, a 10-MW plant in the Aqaba Special Economic Zone and a 20-MW site in the Hosha area.

Although grid constraints delayed the third phase of solar project tendering, in December 2016 the MEMR issued a request for submissions of interest for new solar plants with a production capacity of 200 MW, split into four 50-MW projects. In June 2017 the ministry announced that 34 out of 70 companies had been selected as pre-qualified bidders. The MEMR expects tariff prices in the third round to be lower than the first two due to advances in renewable technology.

Small-Scale Contribution

In August 2016 the MEMR released the “Sustainable Energy Performance in Jordan” report, finding small-scale PV systems had become popular across economic sectors, with NGOs, businesses, hotels, hospitals and households increasingly deploying small-scale or personal solar PV projects or rooftop panels. As of August 2015 the capacity of installed small and personal PV systems was 35 MW, projected to hit 100 MW by the end of 2016. At the time of press, it was not known if this was achieved.

Dozens of small-scale projects were announced or completed in 2017. For example, in February 2017 the German International Cooperation Agency inaugurated four solar-powered air conditioning units at the German Jordanian University, Petra Guest House, Irbid Chamber of Commerce and the Royal Cultural Centre. After these systems came on-line, their power consumption dropped by 40%. In May 2017 Jordan’s lower house of Parliament announced plans to save JD350,000 ($49,400) in electricity costs through solar panel installation. That same month the Jordanian Royal Air Force was granted a licence to generate electricity from solar energy, enabling it to establish, own, amend, operate, maintain and administrate solar projects.

Private Projects

Private companies are turning to solar power to reduce electricity costs with the Marriott and Sheraton hotel chains developing an 11-MW solar project after signing agreements with Germany’s Meteocontrol and Phoenix Solar AG in June 2016. In late 2016 the Catalyst MENA Clean Energy Fund announced it would provide equity financing for five solar plants worth 34 MW for Jordanian telecoms operator Orange, meeting the majority of their electricity needs. In early 2017, Jordan Hospital announced plans for a 4.8-MW solar plant in an agreement with UAE-based Yellow Door Energy. Planned to be fully operational in 2018, the plant will reduce the hospital’s electricity costs, which are currently estimated at JD2m ($2.8m) per year. “Hospitals pay the highest premiums for electricity, more than any other type of business in Jordan, including hotels, at around JD0.26 ($0.37) per KWh. We estimate the solar project will save us at least 60% on our annual energy costs,” Dr Abdallah Bashir, general manager and consultant surgeon at Jordan Hospital, told OBG.

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