Jordan’s National Electric Power Company (NEPCO) has finally signed a 20-year power purchase agreement (PPA) with US-based First Solar Inc. and the Shams Ma’an Consortium for a 52.5 MW solar photovoltaic (PV) project – the first such project in the kingdom and one of the largest in the region.
The project was conceived over five years ago!
The $150 million USD facility will be built in the sparsely populated Ma’an Development Area in southern Jordan and will produce 160 gigawatts of clean electrical power annually. The project, to be operational next year, is expected to provide 500 construction jobs and another 50 during long-term operation and maintenance.
First Solar will provide design (using their cadmium telluride thin-film PV modules), construction, operations and maintenance services.
A PPA is a vehicle under which a consumer buys electricity for a fixed tariff over a set timespan from the power generator; it encourages private developers to invest in commercial-scale power projects. In this instance, Jordan locks in a secure, renewable energy source and sidesteps costly expansion of national generating capacity.
“The Shams Ma’an solar power plant represents the future of Jordan’s energy independence,” Shams Ma’an CEO Hanna Zaghloul told the Jordan Times. “By bringing together industry leaders, international financing and advanced technology ideally suited to local conditions, we will establish a regional benchmark for the independent production of power.”
Jordan’s Renewable Energy and Efficiency Law (REEL), passed in 2012, guarantees that all power generated under PPAs will be purchased by the consumer and/or by NEPCO. The law also enables materials and spare parts to enter the kingdom free of customs, allowing developers unfettered access to global markets for critical components.
That same year, the ministry launched the first phase of direct tenders, which resulted in signing 30 memoranda of understanding with qualified companies to develop renewable energy projects throughout the Kingdom with total capacity of about 850 megawatts. Last month, the government finalized terms for PPAs on seven projects totaling 200MW. Power produced by these projects will be sold to NEPCO at US$0.17/kWh – the current cost of electricity is around US$0.25/kWh.
Unlike legislation in the US and EU., Jordan’s REEL does not allow individual consumers to enter into PPAs – which prohibits the kingdom’s largest energy users (such as Arab Potash Company, Queen Alia International Airport, Zaatari refugee camp, and others) to also step off the national grid unless they avail to a “wheeling” option.
Wheeling requires that generated power be piped back to the utility company and credited to the consumer, who draws against that credit, paying nominal transmission fees to NEPCO. REEL offers another option to smaller consumers, “self-generation”, but guidelines cap annual power generation at 5MW making that option unfeasible for the kingdom’s largest energy users.
If Jordan is serious about getting its largest consumers off the national grid and onto clean energy solutions – and if the kingdom is to capitalize on current global competition and favorable pricing in the solar market – the REEL options need urgent redefinition to allow PPAs for individual consumers.
Shams Ma’an Power Generation PSC was established to develop PV projects in Jordan. Currently, renewable energy remains underutilized in Jordan.
Image of SHAMS site plan from Shams Ma’an Consortium