Green Hydrogen Strategy: Jordan's drive to become regional hub for production and export

Photo credit: Petra

The Ministry of Energy and Mineral Resources is making significant strides in positioning Jordan as a regional powerhouse for the production and exportation of green hydrogen. This strategic move aligns with the increasing global interest in investing in clean energy, particularly in derivatives such as green ammonia and methanol, Petra reports.

In collaboration with the U.S. Agency for International Development (USAID), the ministry has crafted a comprehensive national strategy focused on elevating Jordan’s status as a regional hub for green hydrogen. This strategy is now at the final stages of approval by the Cabinet, marking a pivotal step in the country’s Economic Modernisation Vision. It resonates strongly with directives from King Abdullah II, emphasizing the acceleration of green hydrogen projects to meet evolving global energy demands and combat climate change.

Central to this strategy is the formulation of policy frameworks designed to attract investments in green hydrogen production. The ministry’s efforts have borne fruit, with 13 memoranda of understanding inked with interested companies, 11 of which were formalized during 2023. This flurry of agreements underscores the government’s steadfast commitment to expanding clean energy resources and diversifying the Kingdom’s energy portfolio, aligning it with the global shift toward renewable energy sources.

Simultaneously, the ministry is actively engaged in legislative initiatives aimed at revising laws governing renewable energy and associated regulations. These efforts seek to optimize the integration of renewable energy sources into the national grid, thereby enhancing efficiency and meeting the Kingdom’s burgeoning electricity needs.

Collaborations with international entities, such as the World Bank, underscore Jordan’s commitment to exploring robust legal and regulatory frameworks for the production, utilization, and exportation of green hydrogen. These partnerships are pivotal in shaping the country’s trajectory toward sustainable energy practices on a global scale.

Moreover, initiatives are underway to comprehensively study and implement the transition towards electric transportation. This includes evaluating infrastructure readiness and charging station tariffs, pivotal steps in the country’s commitment to reducing carbon emissions, and embracing cleaner transportation modes.

Furthering its dedication to optimizing energy resources, the ministry is actively exploring the development of smart grid networks and infrastructure enhancements. Additionally, the establishment of natural gas pipelines to industrial zones aims to significantly reduce energy expenses in the industrial sector.

The progressive installation of smart meters across various electricity distribution networks marks a milestone achievement, reaching 35% of total subscribers by the close of 2023. This endeavor showcases Jordan’s commitment to modernizing its energy infrastructure and embracing cutting-edge solutions to meet burgeoning energy demands while championing global sustainability objectives.

The ministry has also unveiled an ambitious project, leveraging its digital platform to introduce plans for natural gas distribution networks in Amman and Zarqa. This strategic initiative presents a lucrative investment opportunity, estimating a colossal capital infusion of around $537 million. Currently, the Energy and Mineral Regulatory Commission is actively receiving bids and proposals for this project.

Concurrently, efforts are fervently underway to streamline and finalize financial procedures for the Fourth Expansion Project of the Jordan Petroleum Refinery Company.

The Ministry is vigorously spearheading the development of the Hamzah oil field, marking the commencement of drilling activities for the first among a targeted six wells. Simultaneously, in the Sarhan field, the Ministry has reopened bidding for the drilling of two initial 500-meter wells, with subsequent plans for a depth extension to 1600 meters.

Providing insights into gas production metrics, the ministry disclosed that the Risha field achieved a commendable daily output of 40 million cubic feet in 2023. Further amplification of production is envisioned through the drilling of eight wells in 2024 (four by the Kuwait Drilling Company and four by the National Petroleum Company) and an additional ten in 2025 (six by the Kuwait Drilling Company and four by the National Petroleum Company).

With an eye on electrical interconnection projects with neighboring countries such as Egypt, Saudi Arabia, and Iraq, the ministry disclosed ongoing feasibility studies aimed at doubling the electrical interconnection capacity between Jordan and Egypt from 550 MW to 1100 MW. Additionally, significant strides have been made, with the ministry selecting the optimal model for the Jordanian-Saudi interconnection project and initiating preliminary agreements with the Arab Fund for Economic and Social Development. These initial agreements encompass loans and guarantees amounting to 22 million Kuwaiti dinars (equivalent to approximately $71.6 million).

For the initial phase of the Jordan-Iraq electrical interconnection, the Ministry affirmed Jordan's logistical and technical preparedness, anticipating Cabinet approval to commence the signing of electricity purchase contracts, targeting a supply of approximately 40 megawatts to the Ratba area.

The ministry underscored pivotal advancements in environmental sustainability initiatives within the energy sector. Notably, the installation of solar water heaters has significantly benefited 3308 citizens since its launch in May 2022. In 2023 alone, 2840 solar heaters were successfully installed out of a targeted 3000, financially supported by the ministry's Jordan Renewable Energy and Energy Efficiency Fund.

Efforts persist in bolstering energy efficiency within medium and small industrial setups through comprehensive energy audits. With 39 applications received from interested factories in 2023, the ministry approved 33, resulting in energy audit studies being conducted in six industrial facilities.

In alignment with its commitment to social welfare, the ministry signed a consequential agreement with USAID in February 2023, aiming to install 1200 solar water heater systems for underprivileged families. By the close of 2023, 300 systems had been effectively installed as part of this initiative.

To curtail electricity system costs, the ministry has implemented pertinent policies, including time-related tariffs ratified by the Energy and Mineral Regulatory Commission in May 2023. These policies are selectively applicable to three sectors (medium industries, water, and electric vehicle charging) on an optional basis for 2023.

While acknowledging remarkable strides, the ministry candidly acknowledged hurdles encountered in implementing its eight energy sector initiatives during 2023. These challenges encompassed technical constraints in oil and gas exploration, financial sustainability concerns for the National Electric Power Company, delays in project requisites from neighboring countries, deferred approvals for the "Wadi Al-Mujeeb Storage Options" project, and the postponement in evaluating and reviewing the comprehensive status of the electrical system.

The energy sector's transformative initiatives comprised eight distinct programs encompassing 52 priorities. Aligned with an unwavering focus on renewable energy sources, these initiatives are tailored towards transitioning to alternative energy avenues. The overarching aim is to map out this energy metamorphosis, fortify power stations, foster robust regional connections, formulate adaptive regulations for the evolving energy sector, and institute incentives to curtail costs. The ripple effects of these endeavors are anticipated to resonate across various sectors, including industry, commerce, transportation, and tourism. Through improved efficiency, reduced expenses, and enhanced purchasing power for citizens, these initiatives are envisioned to serve as catalysts propelling sustained economic growth.

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