JORDAN S ENERGY EFFICIENCY STRATEGY

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1 Regional workshop WEC-ADEME Evaluation of Energy Efficiency Policies in the MENA Region organised by ANME with the support of UNDP Tunis, March 2010 JORDAN S ENERGY EFFICIENCY STRATEGY Walid Shahin Acting President National Energy Research Center Jordan

2 Photovoltaic Wind Energy Rational Use of Energy Oil Shale Sl Solar Thermal Water Conservation

3 Primary Energy Consumption 1% 32% 2% 65% Oil & Oil Products Natural Gas Renewable Energy Imported Electricity

4 Electrical Energy Consumption

5 Challenges facing the energy sector: 1. Jordan is lacking conventional sources of energy, the country needs to import almost all of its fuel needs (96%), steadily increasing the cost of consumed energy to the kingdom: In 2007, it reached 2.76 billion JD, accounting for 19.5% of GDP

6 2. Growing demand for oil derivatives: Jordan witnesses high growth of energy demand Period Electricity Demand Growth (%) Primary Energy Demand Growth (%) ( ) Electricity Generated Capacity to Meet Future Demand. Growth of Primary Energy Demand 7000 Med. Demand 6000 Capacity (MW W) Year Additional units+ Current units+ Interconnection Current Units Max. Peak ( Med. Sen.) Max. Peak ( Med. Sen.)+10% 1000 TOE %٥ ٥ Year The additional generated capacity needed up to 2020 is 4000 MW, an average of 300 MW per year. The expected demand for primary energy amounts is 15 million tons of oil equivalent in 2020 compared to 7.5 million tons of oil equivalent in 2008.

7 2. The provision of necessary funding for investment in the development of energy industry and its installations within time Frameworks to meet energy needs(jordan needs USD18 Billion by the end of 2020 in investment t in the energy sector ) 3. Upgrading oil derivatives specifications in line with international standards in order to ensure safety and environmental protection.

8 The following has been recommended to address these challenges: 1. Achieve security of oil derivatives & electricity supply. 2. Shift the energy fuel mix from oil to gas in power generation and energy-intensive industries. 3. Development of domestic energy resources: Evaluate the technical and economic feasibility of oil shale exploitation ti in Jordan through direct burning to generate electricity or through distillation to produce petroleum. Expand exploration projects in an attempt to discover indigenous natural gas and oil resources through promoting and marketing areas open to investment in the Kingdom, building and enhancing skills of human resources in this field Strengthen the role of the National Energy Research Center to develop the exploitation of new and renewable energy resources, promote energy conservation and establish suitable regulatory frameworks to manage these resources

9 Current Energy Efficiency Activities in Jordan Jordan s energy efficiency strategy Incentives for energy efficiency products in the new energy law Energy service companies (ESCOs) Commercial and industrial energy audits Residential and street lighting efficiency program by AFD Equipment energy efficiency labels and standards

10 JORDAN S ENERGY EFFICIENCY STRATEGY In 2004, an energy efficiency strategy was developed by the Ministry of Energy and Mineral Resources (MEMR) in cooperation with NERC to complement the National Energy Strategy with specific goals and policies to deal with the emerging energy challenge. The key goals of the Strategy were to: Reduce consumption without negatively effecting production or the standard of living for Jordanians. Improve the standards of living. Achieve a balance between imports and exports. Reduce production cost and improve competitiveness of local industries. Lower the investment needs in the generation, transmission and Lower the investment needs in the generation, transmission and distribution of energy through efficiency improvements.

11 The EE strategy identified the following specific policies and tactics to be used to help achieve the target goals: 1. Energy tariff policy The rising cost of importing energy resources has prompted the Government of Jordan to phase out the subsidy on energy end-use products.

12 2. Energy legislations Taxation policies Minimum energy efficiency standards for energy using equipment Energy building codes should be enforced in certain zoning areas Customs duties incentives Legislations aimed at reducing traffic congestions

13 3. Awareness and training campaign 4. Financial policies Increasing awareness of energy efficiency viability among the financing community Establishing a special fund for financing energy efficiency projects with a shared capital between the government and donors to provide preferential terms.

14 Some of these policies have been adopted with varying degrees of success. However, most of the efforts were implemented as individual initiatives and lacked the sense of coordination or of being part of a larger integrated plan.

15 Jordan EE Strategy- Measures 1- Gradual elimination of subsidies (In March 2008, most energy products have been priced close to their cost of service level, thus creating an incentive to increase efficiency for energy users. 2- Preparation and implementation of Public Awareness Program in the field of energy efficiency i 3- Preparation of "Energy Efficiency Code" 4- Design and implementation of Energy Efficiency Training Programs for those who are involved in energy efficiency 5- Establishment of Energy Data Bank 6- Elimination or reduction of Custom Duties & Sales Tax on materials and equipment that contribute to energy saving including thermal insulation materials. 7- Provision of grants and soft loans for large and costly energy conservation projects.(jreeef)

16 Measures /cont. Jordan EE Strategy 8- Oblige importers and manufacturers of energy consuming appliances to fix "Energy Efficiency Label " indicating the annual consumption of the equipment" on their product. 9- Enforcement of "Building Codes", in particular, parts related to energy efficiency i 10- Application of thermal insulation & other energy efficiency measures in design and construction of public buildings 11- Oblige large industrial & commercial institutions to appoint "qualified energy engineer and to carry out periodical energy audits. 12- Taking necessary measures to improve efficiency, including electrical load 12 Taking necessary measures to improve efficiency, including electrical load management, of production, transmission and distribution of electricity.

17 Measures /cont. Jordan EE Strategy 13- Implementation of energy efficiency Demonstration Projects like energy saving lamps, efficient street lighting and solar water heaters 14- Promotion of mass transportation systems 15- Encourage ownership and usage of small cars and discourage usage of old cars (Hybrid Cars) 16- Elimination of traffic jams through replacement of traffic lights by tunnels and bridges including implementation of green street traffic lights systems 17- Encourage and it intensifyif construction ti of traffic signs thatt show directions to different places 18- Promotion and establishment of "Taxi stop" in several places, printing of maps that shows "bus lines" in different parts of the kingdom and make those maps available to the people

18 Measures /cont. Jordan EE Strategy 19- Investigate the feasibility of using trains between Amman and Zarqa for transportation of people &between Aqaba and damman for transportation of goods 20- Design and implementation of energy efficiency projects in the water sector 21- Promotion of renewable energy technologies

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20 Jordan Renewable Energy and Energy Efficiency Fund (JREEF) The new Energy Law introduce the establishment of a fund to provide the necessary investment for the development of renewable energy and energy efficiency projects. The new fund is known as Jordan Renewable Energy and Energy Efficiency Fund (JREEF), and it is established as a legallyll independent d entity with financial and administrative autonomy to acquire movable and immovable assets necessary to achieve its objectives. It is also allowed to receive donors grants and financial assistance.

21 The fund aims to contribute to the development of renewable energy sources and energy efficiency activities in Jordan through investing in projects and conducting preliminary studies. According to the new law, JREEEF will be funded through the following channels:

22 Allocations from the national budget Return on investment from the Fund s own investment Contributions, donations and grants from various sources subject to the approval of the Cabinet if provided by foreign sources. Any other financial resources provided that it is approved by the Cabinet. JREEF is granted the same privileged exemptions as all other public entities.

23 The Fund is designed with five main components, referred to as Windows. Each window provides support to one or more of the various stages of development for either Renewable Energy (RE) or Energy Efficiency (EE) activities as follow: Renewable Energy Subsidy will support deployment of renewable (wind) power in Jordan by closing gap between offered price and acceptable purchase price RE support. Studies and Technical Cooperation will provide grants for feasibility studies; training, DSM program development; other programs and initiatives to support RE and EE development. RE and EE Guarantee Facility will provide resources to facilitate access for borrowing from commercial banks for the deployment of RE and EE. RE and EE Interest Rate Subsidy interest rate subsidies on commercial loans to reduce the overall cost of RE and EE programs and projects. Equity will deploy funds as Public Equity into privately managed investment t funds to encourage deployment of private capital.

24 Thank You Walid R. Shahin hi Acting President National Energy Research Center P.O.Box 1945, Amman11941, Jordan Mobile: Phone: Fax: w.shahin@nerc.gov.jo