Of course this transition is governed by necessity and financial pressure, but this is a great opportunity that can be harnessed to design a smooth and realistic transition towards greener energy resources that can even be cheaper. I am not going to repeat the same text book description of the grave impact of whopping oil prices on the Jordanian economy as it is becoming a common knowledge, but I hope to shed some light on the potential of renewable energies in the national energy production and use system.

Comprehensive national strategy

The first landmark tool for the expected change in energy landscape is the newly released "National Energy Strategy" prepared by a Royal committee and endorsed by  King Abdullah II recently. The energy strategy seeks to increase dependence on local energy sources, from the current 4 per cent to 25 per cent by 2015, and up to 39 per cent by 2020. This will be paralleled with the reduction of energy produced from oil from 58% currently to 40% in 2020.

The Strategy includes an objective to increase the percentage of renewable energy in national primary energy production from 1% now to 9% in 2020. This transition should be done through a package of investments estimated at US $ 1.4- 2.2 billion. The investment package includes Build-operate-transfer (BOT) deals for wind energy with a total capacity of 660 MWs and solar energy innovations for 150 MW. However, the small value of solar energy proposals is really puzzling as the potential for solar energy is much more realistic and even technologically feasible than wind energy.

The strategy includes other recommendations on energy conservation that includes grant exemptions to energy-saving vehicles, exempting solar water heaters from sales tax and implementation of building code regulations than conserve the energy and create a national award for rationalization of energy consumption.

The strategy will be supported by a "Renewable Energy law" that is currently in draft form and will most likely be issued as a temporary law (as indicated in the Strategy itself). The draft law includes regulations and incentives for renewable energy production from investments in areas designated to be utilized to build renewable energy facilities.

Shortcomings of draft Renewable energy law

The draft law provides investors with a lot of incentives including 75% exemption from income tax for 10 years but falls short of providing incentives for individuals and small scale industries and facilities that think of installing renewable energy sources. If any citizen would like to install a package of photovoltaic cells or water heaters on the roof of the household there are no incentives to assist the citizen. In many countries that have adopted renewable energy laws the citizen, the school, the farm, the hospital or any other facility can feed the national grid with electricity generated from solar cells and get paid for the extra electricity provided to the grid.  Any renewable energy law in Jordan should be able to introduce incentives for such individual or small scale innovations and not limit it self to incentives to big investors.

The law provides the Ministry of Energy with the power to identify and specify land zones that have high potentials for renewable energy development. Such areas will be "protected" by the law and spared for renewable energy production. If the land is privately owned a compensation process will be provided for the owner. This approach aims to protect the areas from other investments or developmental activities that will reduce its renewable energy production capacity.

The law stipulates certain conditions to be adhered to by the potential investor including a minimum of 5 years' experience in managing renewable energy facilities with a minimum capacity of 10 MW which should "guarantee" good experience. However, such a condition may negatively impact innovation as some investor may think of experimenting a pilot technology in Jordan before upscaling it. The science and technology of renewable energies is changing by the minute and new innovations can take root before a 5 years period of operation.

In the final analysis the new law can boost the business and opportunities of renewable energy investments in Jordan if it provides incentives for corporates and individuals in addition to guaranteeing transparency and accountability in governmental management of tenders and investment conditions to build the trust of investors and maintaining a conducive environment for renewable energy development in Jordan