Country Prepares for Arab Renewable Energy Congress 16-18 December
Move Increases Growing Gap Between FITs and RPS Policy
December 11, 2012
By Paul Gipe
While North American regulators continue debating the merits of
feed-in tariffs, another developing country has adopted the policy
renowned for rapidly developing renewable energy in the developed world.
This week Jordan's Electricity Regulatory Commission introduced tariffs
that will be paid for generation from various renewable technologies.
The move was in response to the Renewable Energy and Energy Efficiency
Law (REEL) passed in April that requires the national electric utility
to purchase generation from renewable generators.
The announcement appears timed for the Second Arab Renewable Energy Congress to be held in Amman 16-18 December.
Very few details of the new policy are available in English. What
is known is that the policy is a radical reversal of the previous
direction in Jordanian energy policy and follows a festering dispute
about the role of nuclear power.
World attention has focused on Iran's attempts to build nuclear
reactors, but has overlooked Jordan's once ambitious plans. As recently
as 2009, Jordan entertained the prospect of building as many as five
nuclear power plants.
Jordan's parliament shelved those plans in May as well as canceled a contract with French company Areva for mining uranium.
It's not clear if the cancelation of the nuclear plants and the
uranium mining are directly related to the previous passage of Jordan's
renewable energy law.
Like Israel, Jordan is dependent on natural gas imports from Egypt.
Recent sabotage of the gas pipelines has brought Jordan's precarious
dependence on energy imports into focus
The Jordanian government is also facing a fiscal crisis as it subsidizes more than half the cost of electricity to consumers
The prices posted by the Electricity Regulatory Commission are
described as a "ceiling tariff". What this means is not explained in the
English-language text. There is also a 15% bonus for projects of "fully
Jordanian origin" Here's a summary of what was published in English
- Tariff differentiation by technology only, Wind, solar PV, concentrating solar, biomass, and bio-gas technologies included ,Bonus payment capped at 500 MW, and the Tariff is based on the cost of generation model.
Critics of the country's previous nuclear plans have noted that
Jordan has unambitious targets for renewable generation: 7% of
consumption by 2015, and only 10% by 2020. They have also noted that
generating electricity from heavy fuel oil in Jordan costs JOD 0.19 per
kWh ($0.26 USD per kWh) and from Egyptian natural gas costs JOD 0.12 per
kWh ($0.16 USD per kWh)
The addition of Jordan to the ranks of jurisdictions using feed-in
tariffs increases the gap between programs using feed-in tariffs and
quota models (Renewable Portfolio Standards) for developing renewable
energy.
In 2013 both Great Britain and Italy will move their programs from
the European version of Renewable Portfolio Standards to feed-in
tariffs, widening the gap further
Jordan's choice of feed-in tariffs adds to the controversy
surrounding the role of Renewable Portfolio Standards in future energy
policy. The respected German Institute of Economics (Deutsches Institut
für Wirtschaftsforschung) has thrown fuel on the fire with two
provocative new studies arguing in effect that feed-in tariffs are
superior at reaching aggressive renewable targets.
- Renewable Energy: Quota Model Not Viable Alternative to EEG
- Have State Renewable Portfolio Standards Really Worked?: Synthesizing Past Policy Assessments
-End-
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