The main obstacle to concluding the agreement are the high tariffs and prices quoted for electricity included in the proposal, the minister said, indicating that the prices were based on the economic situation and high oil prices when it was crafted late last year.
According to Qteishat, the ministry is close to either reaching an agreement with the company or ending negotiations, with an option to negotiate with the second bidder or reopen the tender should talks fall through.
The wind farm, which was to be constructed on a build-operate-transfer basis with financing provided by the World Bank, was scheduled to be operational next year as the Kingdom’s first wind power plant.
Plans are also in place for an 80-90 MW wind farm in Fujeij, near Wadi Musa, by 2011, and wind turbine stations at Al Harir, Maan and Wadi Araba to produce 300-400 MW of electricity.
Known for its affordability and relatively quick construction period, wind energy has been seen as a key part of the Kingdom’s strategy for greater energy independence.
The energy strategy calls for Jordan to meet 29 per cent of its energy needs from natural gas, 14 per cent from oil shale, 10 per cent from renewable energy resources and 6 per cent from nuclear energy.
In addition to 600 MW of wind and 300-600 MW of solar energy, the government is looking to generate 30-50 MW of biomass by 2020. With the advancements in wind power technology, the ministry has previously expressed its intention to meet its goal of 600 MW of wind energy by 2015, five years ahead of schedule.
The objective of the Promotion of a Wind Power Market Project for Jordan is to increase power supplied from renewable energy sources in a sustainable manner through the private sector and thereby help reduce the level of carbon emissions from hydrocarbon-based power generation sources.
There are four components of the project. The first component of the project is development of a promotional wind Independent Power Producer (IPP) power plant. This component involve the following sub-components: (a) supply and installation of equipment for generating electricity from wind resources to produce 60-70 MW of electricity in the area of Fujeij. The scheme will be developed and financed by private sector developer on a build-own-operate basis. Studies show that a total of about 200 GWh can be produced annually from a 60-70 MW wind farm.
This will form part of the total wind power capacity of 600 MW the Government of Jordan (GoJ) plans to have operational by 2015; (b) a portion of the Global Environment Facility (GEF) grant will contribute towards the provision of technical assistance in the design of the wind power plant as well as in the preparation of requests for the selection of private investors to develop said wind power plant.
Financing for a portion of the incremental cost of the wind farm will be channeled through a renewable energy fund to which the GoJ will contribute. The second component of the project is Jordan renewable energy and energy efficiency fund.
This will consist of the following two sub-components: (a) establishing a financing mechanism for Jordan Renewable Energy and Energy Efficiency Fund (REEF) to support renewable energy activities; (b) provision of financial support to Jordan REEF which will be applied to performance-based subsidies for wind power projects. The GoJ will also contribute to the Jordan REEF. The third component of the project is renewable energy technical assistance support. The fourth and final component of the project is development of a market for renewable energy.