Accelerating the Jordanian Energy Transition

Jordan’s energy transition has been rapid and ambitious: in 2021 renewables accounted for 26 % of electricity production in Jordan, up from less than 1 % in 2014. This massive leap forward was prompted by energy security concerns in the wake of the Arab Spring that forced the government to scramble for alternatives to Egyptian gas. Today, Jordan is a regional clean energy industry frontrunner, with over 300 PV companies and around 13 000 employees in the sector. However, recent policy decisions have stalled further progress. Auctions for new projects have been scaled back or postponed, and new ventures in excess of 1 MW were indefinitely suspended in January 2019. At the same time, changes to electricity tariff structures have dampened demand for residential PV. This loss of momentum is largely due to financial constraints on Jordan’s state-owned National Electric Power Company (NEPCO), which is caught in long-term purchasing agreements for fossil fuels that conflict with the goal of growing Jordan’s renewable energy sector and are exacerbating NEPCO’s already significant debt burden. With 20 % of public debt linked to the electricity sector, this also has ripple effects for the rest of the Jordanian economy. Increased regional cooperation will be needed to re-negotiate Jordan’s commitments to purchase fossil fuels and to expand the regional market for renewable energy, allowing Jordan to export surplus electricity and establish itself as a clean energy hub while at the same time giving neighbours the chance to sell energy elsewhere and increasing regional stability. And while Jordan’s top-down approach to energy policy was crucial to driving the rapid growth of renewables, the current risk of stalling progress makes it clear that stakeholders from different ministries as well as industry and civil society must be involved in future policy development processes to accelerate Jordan’s energy transition and shift the country from the current single-buyer model towards a more competitive market for electricity.