News / Middle East

Lights Go Out in Jordan as Energy Crisis Bites

A view of a power station near Amman, Jordan April 2, 2013.A view of a power station near Amman, Jordan April 2, 2013.
A view of a power station near Amman, Jordan April 2, 2013.
A view of a power station near Amman, Jordan April 2, 2013.
After midnight on one of Jordan's busiest highways, only the beaming headlights of vehicles driving between the capital Amman and the Dead Sea pierce the gloom.
The highway is lined with street lights as it weaves down from Amman to the valley floor below sea level, but none are switched on. The government can no longer afford the bill.
The resource-poor kingdom, which imports 97 percent of its energy, has in the past two years seen the annual cost of those purchases soar above $5 billion - equivalent to about 15 percent of its gross domestic product - after supplies of cheap Egyptian gas were disrupted by sabotage of a pipeline to Jordan.
Dependent now on costly diesel and fuel oil, Jordan is considering wider electricity rationing and is preparing a hike in electricity prices in June, a politically-fraught move in a country which saw street protests last year over fuel subsidy cuts imposed as a condition for a $2 billion IMF loan.
"Energy is the Achilles heel of the Jordanian economy, it's a huge vulnerability for Jordan...the biggest drain on the economy,'' Nemat Shafik, deputy head of the International Monetary Fund, said during a visit to Jordan last month.
It is not just cost but capacity which the government is struggling to manage.
Jordan's failure to modernize its decades-old oil refinery, which handles 140,000 barrels per day of crude imports but has only a limited ability to refine high-quality diesel, has worsened the crisis, experts say.
Meanwhile, foreign investment in independent power plants, which produce over 60 percent of the country's installed power capacity of 3,300 megawatts, is barely keeping up with a seven percent annual rise in consumption, experts say.
So in the short term, the government is being forced to tackle the other side of the supply/demand equation and find ways to reduce consumption.
Some steps are relatively painless; last month authorities asked for bids from firms to introduce 600,000 energy-saving light bulbs in public buildings, and they plan a nationwide campaign to distribute 1.5 million of those bulbs to households.
"If you don't have enough generation, you have to manage demand. One quick solution is energy efficiency in transport and electricity, where load consumption is high,'' said Khaled Irani, an energy consultant and former energy minister, estimating efficiency steps could save $1 billion.
Other measures are painful. The government is considering a new power-rationing scheme for this summer, to cope with an expected influx of tourists on top of over 460,000 refugees from Syria who have fled the civil war there.
The government also plans to raise electricity tariffs this summer, a step which could help to curb demand growth while easing the losses of the technically bankrupt state-owned electricity firm, National Electricity Production Co.
Reducing the losses at NEPCO, which piled up debts of $2 billion after it was forced to pay independent power producers for energy generated from costly diesel and heavy fuel, are a key performance criterion in Jordan's 36-month standby loan deal with the IMF.

Impetus for Investment
The disruption of Egyptian gas flows, which once generated 80 percent of Jordan's electricity, raised the cost of producing a kilowatt of electricity by as much as 600 percent. Gas flows were hit first by sabotage conducted by armed Egyptian militants or bandits, then by bottlenecks within Egypt's gas industry.
But the disruption has created an impetus for Jordan to invest in renewable energy projects which, while they will not end the crisis in the short term, appear increasingly feasible.
Among the first to emerge was Shams Maan, an equity partnership between Jordan's Kawar Energy, U.S. firm First Solar and Italy's Solar Ventures to build a 100-megawatt solar plant in the southern town of Maan at a cost of $300 million.
Hanna Zaghloul, the project's chief executive, said the government would now pay 16.9 U.S. cents for a kilowatt hour of electricity from solar technology, compared to around 24 cents for electricity from heavy fuel and 28 cents from diesel.
"That's why renewable energy is feasible for the government these days,'' Zaghloul said.
A year ago parliament passed a renewable energy law setting a tariff structure for grid connection. The government is soliciting expressions of interest by April 11 to build a $120 million, 75 MW solar plant at Quwaira in southern Jordan; at least a dozen international firms have submitted proposals to build this and other solar projects.
Jordan's ability to proceed with such projects has been given a boost in recent months by a $5 billion fund contributed by wealthy Gulf states to support its development amid regional instability.
The fund may also help finance construction of a $100 million liquefied natural gas terminal that is expected to be ready by the second half of 2014 and receive gas supplies from Qatar.
Meanwhile, Jordan plans to build a strategic reserve of 100,000 tons of oil to increase its critically low stockpile, currently at just three weeks of supply.
A 1,000-kilometer crude oil pipeline is being planned to export at least 1.5 million bpd of Iraqi crude through Jordan and its port of Aqaba to other countries. Technical studies have been made and tender documents are expected soon.
Oil Shale
In the very long term, industry experts say Jordan hopes to find oil shale and natural gas reserves large enough to reduce its dependence on energy imports.
Oil shale development has already begun with Estonia's Enefit planning to finance, build and operate a 430 MW power station using fuel from oil shale by the end of 2016. Royal Dutch Shell has invested $100 million to explore for oil shale in Jordan's east and north.
Jordan's oil shale projects focus on obtaining liquid hydrocarbons from fine-grained sedimentary rock, and are different from the shale oil industry in the United States, which blasts non-porous rock through hydraulic fracturing and is revolutionising the U.S. energy outlook.
Meanwhile, BP has invested $260 million in Jordan's Risha gas field near the border with Iraq; the company has dug a well and plans two more this year.
Jordanian officials say seismic studies suggest the field could in 2020 be commercially producing between 300 million and one billion cubic feet of natural gas per day, turning the country into a gas exporter.
Even Jordan's controversial effort to build a 1,000 MW nuclear plant has seen some progress, although the financing challenge means completion of the project is by no means certain. The government is expected to choose in coming weeks between two preferred bidders to supply the reactor, a French-Japanese consortium including Areva and Mitsubishi Heavy Industries, and Russia's Rosatom.
For now, however, Jordan will have no option but to grapple with an energy bottleneck that weighs on its economy and worsens its political risks.
"We face definitely a tough situation regarding energy. It will remain an alarming issue for the coming three or four years, until some of the projects such as oil shale kick in,'' said Alaa Batayneh, who led the drive for energy self-sufficiency as energy minister in the last government.

You May Like

Video Russia’s Syrian Escalation Tests Obama’s Crisis Response

Critics once again question whether president has been slow to act on Syrian conflict, thus creating opening for powers like Russia More

Ancient African DNA Shows Mass Migration Back Into Africa

First genetic analysis of ancient human remains in Africa suggests massive migration from north around time of Egyptian empire More

NASA: Pluto Has Blue Sky

New photos also reveal the presence of water ice More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Hungary Criticized for Handling of Refugeesi
Henry Ridgwell
October 08, 2015 8:02 PM
Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

Video Nano-tech Filter Cleans Dirty Water

Access to clean water is a problem for hundreds of millions of people around the world. Now, a scientist and chemical engineer in Tanzania (in East Africa) is working to change that by creating an innovative water filter that makes dirty water safe. VOA’s Deborah Block has the story.

Video Demand Rising for Organic Produce in Cambodia

In Cambodia, where rice has long been the main cash crop, farmers are being encouraged to turn to vegetables to satisfy the growing demand for locally produced organic farm products. Daniel de Carteret has more from Phnom Penh.

Video Botanists Grow Furniture, with Pruning Shears

For something a bit out of the ordinary to furnish your home, why not consider wooden chairs, crafted by nature, with a little help from some British botanists with an eye for design. VOA’s Jessica Berman reports.

VOA Blogs