RENEWABLE ENERGY AND WATER
Jordan is one of the most water scarce countries in the world, and with the spotlight on the effect of climate change, finding water saving solutions and techniques for reusing water is becoming more urgent. Concerning energy, there is a desire for diversification, with Jordan’s eyes set on developing renewable energy sources. Both of these developments open up market possibilities for Danish companies with expert knowledge and specified products within the field of water and renewable energy.
Introduction:
Jordan has extremely limited natural resources. There is some potash and uranium, and great amounts of oil shale, but no actual oil. On top of that water has always been scarce in Jordan due to the natural conditions. A growing population combined with more urbanisation both in Jordan, but also amongst its neighbours aggravate the situation. As one of the 10 poorest countries in the world in per capita water available, there will be a great focus on water management and water saving technologies. The distribution of water is not efficient, and both the private sector, and especially the agriculture production, has an uneconomical use of water. This leads to several private-public partnerships in developing better water infrastructure, waste water management and a need for water saving equipment and technology.
With the Iraq war came the fall of very profitable oil import agreements. This has forced the energy sector to become more diversified. It means that there is a special emphasis on securing the energy supply through renewable energy options, for example wind power, biomass or solar power. Besides these sources of renewable energy there are also attempts to develop other energy forms such as nuclear power, extracting gas and using oil shale. Therefore the market for expert knowledge and technologies is expanding, making room for Danish products and consultancies, especially within the renewable energies.
(Chart, Energy sources) Market indicators:
Jordan is total dependant on foreign energy sources with 96% of its energy supply being imported, and almost no exports. As Jordan does not have any oil, but has traditional links with the regional oil producing countries, two thirds if its energy comes from oil products. Around a quarter is derived from gas, and the rest imported, with currently only 1 % of the energy being derived from renewable resources. (Source: JIB)
Jordan has one oil refinery to which Saudi Arabia is the absolute biggest source for import of crude oil with an annual import of around 1.5 billion JD with Iraq supplying for around 5 million (Jordan Statistics, 2007). There is a profitable long-term agreement on gas with Egypt, and a small local production of gas and a gas pipeline to supply Turkey, Syria and Lebanon runs through the country.
The Oxford Business Group points out that all demands for energy are expected to increase, therefore making a diversification of sources even more needed. In 2007 demand for electricity was 2100 MW and thought to reach 5770 MW in 2020. It is expected that the average electricity demand until 2020 will reach a growth of around 7.4%, which is 2 percentage points higher than the current primary energy demand.
The shortage of water in Jordan is stark with water per capita being 135 m3 and even though the access to drinking water is high with a 96%, the agriculture consumes around 75% of the water. On the other hand touristic industries extracts 1%, and the municipal level, i.e. personal consumption accounts for around 30% of the water usage. (Source: Ministry of Water and Irrigation)
The two problems which are often pointed out in this regard, is the waste of water since the water infrastructure is not sufficient, and the unsustainable nature of low-value agricultural crops obtaining the majority of the water resources.
What is evident is that many of the water resources are not sustainable with only 32% of the water coming from safe yield groundwater, and the Ministry of Water estimates that groundwater is being exploited at twice its recharge rate. This puts not only the water management in focus, but also the stability of resources.
(Chart, Water resources 2007)
Market trends:
There are major political forces driving the agendas of renewable energy and water, creating policies and donor or public-private projects acting as incentives to invest in these sectors.
The Master Plan for Energy Investment attempts to reduce the dependence on imported energy mainly by starting to extract electricity from oil shale, increase the projects of renewable energy and develop nuclear energy.
Concerning renewable energy there are major attempts to develop the wind energy in the country, with more than six tenders of pilot wind power energy projects to come under tender within the coming two to three years. This will involve investments of USD 645 – 934 mil. The solar energy is still in a R&D phase, for example opening up possibilities of manufacturing of solar cells. It should be noted that renewable energy products are exempted from tax and customs.
Besides these two there are major investments in improving the networks for energy distribution, developing nuclear energy and managing to extract oil from oil shale. The two last projects have been in the pipeline for some time with contracts and partnerships are being signed, and importantly they are still R&D centred.
Regarding water there is a major domestic focus on the problems that Jordan faces and how they will be solved, especially due to the political developments’ influence on the supply of water. The government’s short to medium term plan attempts to secure the water supply for Jordan through improving the water supply management on one hand and increasing the efficiency of water use on the other.
Currently it does not seem that the majority of projects are revolving around reducing the waste of water in the households and in the distribution networks, but more on increasing the amount of water accessible in the long term.
Amongst others is the feasibility study for the massive project of Red Sea-Dead Sea Water Conveyance Project, which was started with the World Bank, including agreements with Israel and the Palestinian Authorities. The canal is set to supply the Dead Sea with water from the Red Sea, but will also include desalination plants, and is supposed to supply both Israel and Jordan with water, but this requires enormous investments.
The Disi project, which the Turkish group GAMA has won the tender for, is signed and getting ready to transfer 100 million cubic metres of water a year from Disi to Amman. The project’s estimated costs reach USD 875 million, executed over at 25-year contract on a build-operate-transfer system. The Water Authority of Jordan, an agency within the Ministry of Water, is responsible for distributing water to the final users, including setting the tariffs.(Chart, Masterplan for Energy Investment)Market assessment:
Water and energy are two of the most constricting parameters for the Jordanian economy, and therefore has the full spotlight of the Jordanian public, the government and the donors. This puts pressure on the actors to finding solutions, and means that there are also a lot of investment openings in partnerships.
The market openings for Danish firms within the energy sector are sizeable due to the expertise in renewable energy. Especially the surge for wind power will open up for both technological components and know-how. Besides the wind projects, there are also openings within the power infrastructure. In that regard Danish firms specialising in energy efficient solutions like pumps and isolation devices, can explore market possibilities in conjunction with the distribution of both water and energy.
Concerning water there is a great need for technology which is eco-efficient and increasing the efficiency of using water. There is a need for technologies for the projects in Jordan, mainly concerning desalination, water resource development and wastewater management. Besides that there is the whole municipal water reuse, including solutions for reuse with the agricultural, commercial and industrial sectors.
Relevant links:Ministry of Water and Irrigation: http://www.mwi.gov.jo/mwi/homepage.aspx
Water Authority of Jordan: http://www.waj.gov.jo/
Ministry of Energy and Mineral Resources: http://webserver.memr.gov.jo/
Natural Resources Authority: http://www.nra.gov.jo/
National Energy Research Centre: http://www.nerc.gov.jo/
