Energy Sector Capacity Building Activity

12 February 2015

Contents

• Jordan’s Energy Crisis• Jordan’s Energy Policy Response• ESCB’s Vision and Objectives• Task-by-task Descriptions• Transformative Effect of ESCB’s Activities

• Upcoming Milestones

Jordan’s energy sector faces multiple challenges

Rapidly growing energy demand

•7% annual growth in primary energy demand•5.5% annual growth in electricity demand

Large subsidy flows for household electricity

consumption•$1.3 billion spent last year on electricity subsidies

Near total dependency on imported fuels

•97% of energy needs met through imports•17% of GDP annual spending on energy imports

Mobilizing the investment to expand energy resources

•New supplies (conventional and renewable)•Transmission additions

Jordan’s energy policy promotes diversifying energy production while reducing consumer demand and subsidies

Jordan’s 2007-2020 Energy Strategy calls for increasing the share of renewable energy to 10% by installing an additional 1,000 MW of wind and 800 MW of solar energy by 2020.

Renewable Energy

Energy Efficiency

The 2012 National Energy Action Plan calls for a 30% increase in solar water heater uptake and 20% improvement in energy efficiency by 2020.

MEMR and NEPCO are pursuing alternative supplies for power generation, including Eastern Mediterranean gas, as well as shale gas and nuclear.

Supply diversity

All figures from GOJ documents

ESCB has an ambitious mission to transform Jordan’s energy sector

VISIONJordan achieves energy security through effective sector planning and management that is based on strong analytical capabilities, effective implementation tools, and a vibrant private sector.

MISSIONProvide the technical assistance and capacity building needed to introduce diversified energy supplies and to better manage energy demand.

ESCB takes a comprehensive approach to strengthening policies and institutions in the energy sector

Build the institutional capacity to plan and oversee rational development of the energy sector

Support the private sector to increase the supply of clean energy

Promote a culture of sustainable energy consumption in households, businesses and government

Advocate and facilitate cooperation between energy sector stakeholders

Expand employment and leadership opportunities in the energy sector for women, youth and people with disabilities

TASK 1: ENABLE DEMAND SIDE MANAGEMENT (DSM)

Demand-Side Management encompasses electricity-saving measures delivered by electric utilities

These measures can include:•Energy saving behavior by consumers•Energy-efficient appliances and equipment•Solar PV•Solar Water Heating

Who benefits from DSM?•Electricity consumers•NEPCO and the Government of Jordan•Local communities and businesses

DSM has proven effective in the U.S. and globally

• DSM is a fast-growing industry that accounts for about 20% of total energy-savings in the US

• Energy saving investments are funded through utility bills

• Utilities receive an incentive for meeting their targets

• A regulatory and legal framework is required for DSM to be successful

• Mature DSM programs have been shown to deliver 3-5% annual savings on a long-term basis

COST RECOVERY

REVENUE RECOVERY

PERFORMANCE INCENTIVES

DSM for households addresses Jordan’s energy challenges and opportunities

Household Energy challenges•40% of total electricity•Fastest-growing sector

– 75,000 new households annually

– 7% annual growth•Main subsidy recipient

– 400 million JD (2015)

Electricity distributors are well positioned to deliver household energy programs in Jordan

• Strong technical and administrative capacity

• Billing data needed to segment markets and qualify customers

• Access to financing• Familiarity and branding• Complete geographic coverage• Well-placed to overcome the

low-awareness and risk-aversion of households regarding energy efficiency and renewable energy

ESCB’s activities address the full spectrum of support required to advance DSM in Jordan

• DSM financial analysis model developed

• In use by electric utilities and the regulator

Tools to design and evaluate DSM programsEstablishing a regulatory and

legal framework• DSM Recommendations

adopted• DSM Guidance issued by

EMRC

DSM Funding• Jordan Renewable

Energy and Energy Efficiency Fund (JREEEF) operational

• Tariff revenues

DSM capacity building• DSM units at each

distribution company• Establishing DSM

oversight capacity for the regulator

Identifying energy-saving opportunities• Household load surveys

completed and results in use• Billing data analysis

Task 1

TASK 2: BUILD THE CAPACITY OF THE ENERGY SECTOR

Ministry of Energy and Mineral Resources

Energy and Mineral Resources Commission

NEPCO

Various energy suppliers (domestic and foreign)

EDCO JEPCO IDECO

ESCB works with multiple counterparts in Jordan’s electricity sector

ESCB delivers a broad range of technical assistance and capacity building throughout the energy sector

• MEMR/JREEEF

Establishing and Operating Revolving FundsIntermittent Renewable

Resources Grid Codes• NEPCO • Distribution Companies• EMRC

Energy Audit Training• MEMR• Other Ministries

Assessing of Efficient Lighting Testing Lab Requirements• JSMOEnergy Saving Action

Planning• MEMR• Other Ministries

Task 2

TASK 3: ESTABLISH A PRIVATE SECTOR LED CLEAN ENERGY INDUSTRY

Establishing a thriving energy services industry in Jordan

• Assessment of resources • Market-reflective financial

products• Performance risk guarantees • Standardized performance

contracts• Coordinating with other USAID

and donor projects

Improve access to financeBuild professional credentials of ESPs• Needs assessment of

companies • One-on-one support to

ESPs• CEM and CMVP training

Establish an ESP association

Create capacity for ESP self-regulation• Develop private sector led

voluntary accreditation system• Support government to license

energy auditors

Task 3

• Coalition of energy associations

• Strengthening individual energy associations

TASK 4: RESPOND TO EMERGING NEEDS

ESCB flexible response mechanism to meet demand-driven needs

Waste-to-Energy tender for Greater Amman Municipality

Solar PV demonstrations on government buildings

Support Eastern Mediterranean Gas Supply Negotiations

Task 4

FOCUS: INCLUDING WOMEN, YOUTH AND PEOPLE WITH DISABILITIES

ESCB’s Gender Goals

Ensure that women play a key role in planning,

developing and implementing EE/RE

Actively promote and provide capacity building for women's participation

and leadership in our counterpart organizations,

public and private

Support the development of women-owned energy

companies

Key Activities

• Launched ESCB’s mentorship program for young women in the sector

• Work with universities to encourage young women to pursue careers in energy (internship program and inclusion in ESCB activities)

• Women-focused leadership activities• Continue to foster dialogue on participation

and promote inclusive policies• Target capacity-building to women-owned

businesses

ACHIEVING ESCB’S VISION FOR ENERGY SECTOR TRANSFORMATION

What does energy sector transformation look like?

Reduce energy demand growth and subsidy outlays through energy-saving policies and programs

Develop a legal/regulatory frameworks that supports clean energy and private investment

Facilitate consumer and business access to energy efficiency knowledge, practices and technology

Consumer demand

Government spending

Energy expenditures

Electricity prices

Private investment in clean energy

Renewable energy production

Government spending

New business and jobs

Consumer demand

Energy expenditures

New technologies

Upcoming Project Milestones

JREEEF Year 1 Programs

Launch

19-20 May

April-May

MoPIC Solar PV Commissioning

March

April

Jordan Customs Solar PV

CommissioningWomen’s

Leadership Forum

DSM Program Launch

April

Thank you!

Mary Worzala, Chief of Partymworzala@deloitte.com

Grayson Heffner, Resident Advisorgheffner@deloitte.com

APPENDIX

Household Load Surveys help identify DSM market opportunities

DSM Financial Analysis Model

Support to renewable power integration

• Jordan’s renewable energy goals call for over 1800 MW of new power generation by 2020

• Renewable power sources must be interconnected in a standardized way to avoid impacts on grid reliability

• A grid code standardizes interconnection requirements previously done on a project-by-project basis

• ESCB supported NEPCO, EMRC, DISCOs and project developers to develop Renewable Resource Grid Codes

Operationalizing JREEEF

• Developed fund strategy and business plan• At MEMR request, coordinating the efforts of donors committed to supporting

JREEEF• Organized a consultation process for JREEEF’s stakeholders• Developed the JREEEF by-law, now approved by the Council of Ministers• Designed JREEEF’s EE/RE programs for 2015 implementation, including

support to DSM• Providing ongoing analytical and design support to JREEEF

Accreditation is a key ingredient of energy service providers self-regulation

Coalition Executive

Board

JGBCEDAMA REES

Stakeholders:Consumers

BanksGovernment

AgenciesUtilities

Accreditation Committee

ESPs

4. Board informs ESP on the evaluation result

3. Committee submits evaluation results

2. Board submits ESP application for evaluation

Feedback on Accreditation System

1. ESP applies for Accreditation

Feedback on Accreditation

system

Solar PV demonstrations

• Jordan Customs and the MoPIC buildings

• 150 kW grid-connected installations

• Prominently displayed “dashboards” will explain the benefits of solar PV – increasing awareness and visibility of renewable power production

• Standardized bid documents and procedures

Waste-to-Energy Tender for Amman Municipality

GAM MSW

1,200-1,500 TPD (with upward flexibility)Tipping Fee (JOD/tonne) MSW

Recyclables marketsCement Companies

AgricultureElectricity Grid

Al Ghabawi Landfill

Zarqa, Al Rsifieh, Industrial waste

Tipping Fee JOD/tonne

Potential WTE Products WTE InfrastructureOff-takers

Contractor Bids:

Tadweer Recycling Plant (legacy agreement)1,000TPD

Eastern Mediterranean gas supply

• Support MEMR/NEPCO on negotiations with gas suppliers

• Advise MEMR/NEPCO on the parameters influencing the economics of purchasing gas

• Assist MEMR/NEPCO in negotiation agreements

• Develop tendering strategies• Analyze key transaction issues and

considerations• Build capacity for transaction

execution

Institutional Arrangements for distributor-delivered household DSM programs

TFC by consuming sector - Jordan

Growth in retail tariffs 2012-2017