OBG talks to Mohammad Hamed, Minister of Energy and Mineral Resources

Interivew: Mohammad Hamed

What is your vision for the energy sector, and, two years on, what has been the impact of the Renewable Energy and Energy Efficiency Law?

MOHAMMAD HAMED: As a result of this law, we have seen a great deal of progress being made in developing sources of renewable energy, especially through smaller-scale projects. We are seeing widespread installation of photovoltaic panels on rooftops, with approximately 450 households now connected to the national grid. We have also seen progress made in linking schools, hospitals, hotels and even some industrial buildings to the grid, so that energy produced by photovoltaic cells installed on their roofs can be distributed.

With regards to large-scale projects, we have signed power-purchasing agreements with 12 developers to generate up to 200 MW of solar power. Of these projects, nine are in Maan, two are in Irbid and one is in Aqaba. We have also signed an agreement to build a wind energy project in Tafilah, with a capacity of 117 MW. Additionally, there are two additional wind projects that will commence in 2015. These projects are all as a result of the Renewable Energy and Energy Efficiency Law. By 2015, we expect to be generating 475 MW of renewable energy from wind and solar.

Which measures are being taken to ensure that Jordan’s long-term energy needs are met, and how do you see the energy mix changing in the future?

HAMED: Our energy policy operates on the basis of supply security, sustainability, affordability and source diversity. In order to achieve our long-term energy goals, we have drawn up an energy roadmap, which sets out clearly how we intend to fulfil these needs by the year 2023. By 2018, we expect to have approximately 30% of our installed capacity coming from renewable energy. By 2022, we would like to see the first phase of our nuclear ambitions fulfilled, subject to the necessary studies recommending this as a sound option. We will also develop a number of projects to extract oil and gas, and to utilise oil shale resources for the production of electricity. We will meet our baseload demand primarily with oil, natural gas, nuclear and oil shale, and then pursue our drive for renewable energies on top of this.

One of the challenges facing Jordan is our reliance on natural gas imports from Egypt. It is important to have alternatives available in order to stabilise supply streams and prices. We hope that in three years’ time gas will flow from Iraq, which should limit supply shocks. This matters to our large-scale industries, which rely on receiving consistent supplies of natural gas in order to remain competitive in the region.

It is no secret that the energy picture in this region is changing rapidly, and, given our lack of domestic natural resources, we will be looking to capitalise on the growing diversity of energy sources for the benefit of all Jordanians. With the successful implementation of our energy roadmap, we hope to reduce the cost of electricity production, along with our overall energy bill. In 2009, our total energy bill was JD2bn ($2.83bn), which accounted for approximately 12% of GDP. By 2013, this had more than doubled to JD4.4bn ($6.22bn) – approximately 21% of GDP. Given these figures, it is imperative that we find alternative energy solutions that are sustainable in the long term.

What role can the government play in creating an attractive investment climate in the sector and in encouraging responsible energy consumption?

HAMED: At present, and in large part thanks to the Renewable Energy and Energy Efficiency Law, we have a breadth of opportunities available to investors. It is critical for us to create a favourable investment environment, not only to diversify our energy streams, but also to expand our economy. In terms of energy conservation, we are using multiple media platforms to draw people’s attention to this issue. Our strategy is to emphasise the benefits of economical consumption to individuals, as well as to raise people’s awareness of the wider benefits this brings to the country.