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

Video VOA EXCLUSIVE: Iraq President Vows to Fight IS 'Until They Are Killed or We Die'

In wide-ranging interview with VOA Persian service reporter, Fuad Masum describes conflict as new type of fight that will take time to win More

Video Russian Anti-Corruption Campaigner Slams Putin’s Crackdown on Dissent

In interview with VOA Alexei Navalny says he believes new law against 'undesirable NGOs' part of move to keep Russian president in power More

Video On The Scene: In Ethiopia, 'Are You a Journalist?' Is a Loaded Question

VOA's Anita Powell describes the difficulties faced by reporters in fully conveying the story in a country where people are reticent to share their true opinions More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Expelled from Pakistan, Afghan Refugees Return to Increased Hardshipi
X
Ayesha Tanzeem
May 28, 2015 6:48 PM
Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Expelled from Pakistan, Afghan Refugees Return to Increased Hardship

Undocumented refugees returning to Afghanistan from Pakistan have no jobs, no support system, and no home return to, and international aid agencies say they and the government are overwhelmed and under-resourced. Ayesha Tanzeem has more from Kabul.
Video

Video Britain Makes Controversial Move to Crack Down on Extremism

Britain is moving to tighten controls on extremist rhetoric, even when it does not incite violence or hatred -- a move that some are concerned might unduly restrict basic freedoms. It is an issue many countries are grappling with as extremist groups gain power in the Middle East, fueled in part by donations and fighters from the West. VOA’s Al Pessin reports from London.
Video

Video Floodwaters Recede in Houston, but Rain Continues

Many parts of Texas are recovering from one of the worst natural disasters to hit the southwestern state. Heavy rains on Monday and early Tuesday caused rivers to swell in eastern and central Texas, washing away homes and killing at least 13 people. As VOA’s Greg Flakus reports from Houston, floodwaters are receding slowly in the country's fourth-largest city, and there likely is to be more rain in the coming days.
Video

Video 3D Printer Makes Replica of Iconic Sports Car

Cars with parts made by 3D printers are already on the road, but engineers are still learning about this new technology. While testing the possibility of printing an entire car, researchers at the U.S. Department of Energy recently created an electric-powered replica of an iconic sports roadster. VOA’s George Putic has more.
Video

Video Al-Shabab Recruitment Drive Still on In Kenya

The al-Shabab militants that have long battled for control of Somalia also have recruited thousands of young people in Kenya, leaving many families disconsolate. Mohammed Yusuf recently visited the Kenyan town of Isiolo, and met with relatives of those recruited, as well as a many who have helped with the recruiting.
Video

Video US Voters Seek Answers From Presidential Candidates on IS Gains

The growth of the Islamic State militant group in Iraq and Syria comes as the 2016 U.S. presidential campaign kicks off in the Midwest state of Iowa.   As VOA’s Kane Farabaugh reports, voters want to know how the candidates would handle recent militant gains in the Middle East.
Video

Video A Small Oasis on Kabul's Outskirts Provides Relief From Security Tensions

When people in Kabul want to get away from the city and relax, many choose Qargha Lake, a small resort on the outskirts of Kabul. Ayesha Tanzeem visited and talked with people about the precious oasis.
Video

Video Film Festival Looks at Indigenous Peoples, Culture Conflict

A recent Los Angeles film festival highlighted the plight of people caught between two cultures. Mike O'Sullivan has more on the the Garifuna International Film Festival, a Los Angeles forum created by a woman from Central America who wants the world to know more about her culture.
Video

Video Kenyans Lament Losing Sons to al-Shabab

There is agony, fear and lost hope in the Kenyan town of Isiolo, a key target of a new al-Shabab recruitment drive. VOA's Mohammed Yusuf visits Isiolo to speak with families and at least one man who says he was a recruiter.
Video

Video Scientists Say Plankton More Important Than Previously Thought

Tiny ocean creatures called plankton are mostly thought of as food for whales and other large marine animals, but a four-year global study discovered, among other things, that plankton are a major source of oxygen on our planet. VOA’s George Putic reports.
Video

Video Kenya’s Capital Sees Rise in Shisha Parlors

In Kenya, the smoking of shisha, a type of flavored tobacco, is the latest craze. Patrons are flocking to shisha parlors to smoke and socialize. But the practice can be addictive and harmful, though many dabblers may not realize the dangers, according to a new review. Lenny Ruvaga has more on the story for VOA from Nairobi, Kenya.
Video

Video Iowa Family's Sacrifice Shaped US Military Service for Generations

Few places in America have experienced war like Waterloo. This small town in the Midwest state of Iowa became famous during World War II not for what it accomplished, but what it lost. As VOA’s Kane Farabaugh reports, the legacy of one family’s sacrifice is still a reminder today of the real cost of war for all families on the homefront.

VOA Blogs