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.
x
A view of a power station near Amman, Jordan April 2, 2013.
A view of a power station near Amman, Jordan April 2, 2013.
Reuters
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

IS Militants Release 49 Turkish Hostages

Turkey's state-run Anadolu news agency reports that no ransom was paid and no conditions accepted for the hostages' release; few details of the release are known More

Photogallery IS Attacks Send Thousands of Syrian Kurds Fleeing to Turkey

Syrian Observatory for Human Rights says more than 300 Kurdish fighters crossed into Syria from Turkey to defend a Kurdish area from attack by the Islamic militants More

Sierra Leone's Ebola Lockdown Continues

Thousands of health workers are going door to door in the West African country of 6 million, informing people of how to avoid Ebola, handing out soap More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Migrants Caught in No-Man's Land Called Calaisi
X
Lisa Bryant
September 19, 2014 5:04 PM
The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Video

Video Westgate Siege Anniversary Brings Back Painful Memories

One year after it happened, the survivors of the terror attack on Nairobi's Westgate Shopping Mall still cannot shake the images of that tragic incident. For VOA, Mohammed Yusuf tells the story of victims still waiting for the answer to the question 'how could this happen?'
Video

Video Militant Assault in Syria Displaces Thousands of Kurds

A major assault by Islamic State militants on Kurds in Syria has sent a wave of new refugees to the Turkish border, where they were stopped by Turkish border security. Turkey is already hosting about 700,000 Syrian refugees who fled the civil war between the government and the opposition. But the government in Ankara has a history of strained relations with Turkey's Kurdish minority. Zlatica Hoke reports Turkey is asking for international help.
Video

Video CERN Accelerator Back in Business

The long upgrade of the Large Hadron Collider is over. The scientific instrument responsible for the discovery of the Higgs boson -- the so-called "God particle" -- is being brought up to speed in time for this month's 60th anniversary of the European Organization for Nuclear Research, known by its French acronym CERN. Physicists hope the accelerator will help them uncover more secrets about the origins of the universe. VOA’s George Putic reports.
Video

Video Whaling Summit Votes to Uphold Ban on Japan Whale Hunt

The International Whaling Commission, meeting in Slovenia, has voted to uphold a court ruling banning Japan from hunting whales in the Antarctic Ocean. Conservationists hailed the ruling as a victory, but Tokyo says it will submit revised plans for a whale hunt in 2015. Henry Ridgwell reports from London.
Video

Video Russian Economy Reeling After New Western Sanctions

A new wave of Western sanctions is hitting Russia’s economy hard. State-owned energy firms continue to bleed profits and Russia’s national currency plunged to a new low this week after the U.S. and the European Union announced new sanctions to punish Russia's aggressive stance in eastern Ukraine. But as Mil Arcega reports, the sanctions could also prove costly for European and American companies.
Video

Video Belgian Researchers Discover Way to Block Cancer Metastasis

Cancer remains one of the deadliest diseases, despite many new methods to combat it. Modern medicine has treatments to prevent the growth of primary tumor cells. But most cancer deaths are caused by metastasis, the stage when primary tumor cells change and move to other parts of the body. A team of Belgian scientists says it has found a way to prevent that process. Zlatica Hoke has more.
Video

Video Mogadishu's Flood of Foreign Workers Leaves Somalis Out of Work

Unemployment and conflict has forced many young Somalians out of the country in search of a better life. But a newfound stability in the once-lawless nation has created hope — and jobs — which, some say, are too often being filled by foreigners. Abdulaziz Billow reports from Mogadishu.
Video

Video A Dinosaur Fit for Land and Water

Residents and tourists in Washington D.C. can now examine a life-size replica of an unusual dinosaur that lived almost a hundred million years ago in northern Africa. Scientists say studying the behemoth named Spinosaurus helps them better understand how some prehistoric animals adapted to life on land and in water. The Spinosaurus replica is on display at the National Geographic museum. VOA’s George Putic has more.
Video

Video Iraqi Kurdistan Church Helps Christian Children Cope find shelter in churches in the Kurdish capital, Irbil

In the past six weeks, tens of thousands of Iraqi Christians have been forced to flee their homes by Islamic State militants and find shelter in churches in the Kurdish capital, Irbil. Despite U.S. airstrikes in the region, the prospect of people returning home is still very low and concerns are starting to grow over the impact this is having on the displaced youth. Sebastian Meyer reports from Irbil on how one church is coping.
Video

Video NASA Picks Boeing, SpaceX to Carry Astronauts Into Space

The U.S. space agency, NASA, has chosen Boeing and SpaceX companies to build the next generation of spacecraft that will carry U.S. astronauts to the International Space Station by the year 2017. The deal with private industry enables NASA to end its dependence on Russia to send space crews into low Earth orbit and back. Zlatica Hoke has more.
Video

Video Future of Ukrainian Former President's Estate Uncertain

More than six months after Ukraine's former President Viktor Yanukovych fled revolution to Russia, authorities have yet to gain control of his palatial estate. Protesters occupy the grounds and opened it to tourists but they are also refusing to turn it over to the state. VOA's Daniel Schearf reports from Mezhigirya, just north of Kyiv.


Carnage and mayhem are part of daily life in northern Nigeria, the result of a terror campaign by the Islamist group Boko Haram. Fears are growing that Nigeria’s government may not know how to counter it, and may be making things worse. More

AppleAndroid