Jordan’s Electricity Bill to Boost Renewable Energy Generation, Reduce Energy Imports

Arab Weather - Fitch Solutions confirmed in its latest report that the 2024 Electricity Law in Jordan is an important step towards attracting investments in the renewable energy sector, including green hydrogen projects. The report explained that the new law will contribute to enhancing the generation of renewable energy locally, reducing the Kingdom's dependence on energy imports and limiting its exposure to economic risks resulting from fluctuations in global energy prices.

Fitch added that the project represents a new regulatory framework that gives more independence to operators in the areas of electricity production, storage and transmission, opening the door to greater investment opportunities in the energy sector.

Fitch: Electricity Bill Reduces Risks of Economic Shocks by Supporting Local Renewable Energy Production

New Electricity Law in Jordan

The report indicated that Jordan's new electricity bill will help reduce the risks of external shocks by boosting domestic renewable energy production. According to Fitch's analysis, increased reliance on domestic resources will reduce the need for energy imports, which in turn will help reduce exposure to rising energy prices in global markets.

The report added that the draft law will support Jordan's efforts to achieve energy security by reducing dependence on external energy sources and enhancing the sustainable energy system within the Kingdom.

Fitch: Jordan will achieve 31.2% of electricity production through renewable energy by 2033

Fitch expects the new electricity law to raise the share of electricity generation from renewable energy sources in Jordan to 31.2% by 2033, a percentage that far exceeds the regional average for the Middle East and North Africa countries, which is 18.1%. The report stressed that this percentage reflects Jordan’s commitment to promoting the use of clean energy sources and reducing carbon emissions.

The report indicated that this percentage also reflects the pivotal role played by the law in promoting investments in renewable energy, as the new legislation provides companies and investors with the opportunity to build and operate advanced projects to generate energy from sustainable sources such as solar and wind.

Electricity Bill Supports Establishment of Electricity Storage Stations

The Fitch report explained that the new draft law will enable companies to establish, manage and operate power storage stations for private consumption purposes. The report indicated that this step will contribute to enhancing the flexibility of the energy system in Jordan, as details of the required storage volume will be announced later according to the Kingdom’s needs.

The report stressed that this new addition to the legislation aims to enhance energy security and support the transition to clean energy, making Jordan a role model in adopting innovative policies to achieve sustainability in the energy sector.

Jordanian government approves Electricity Bill 2024

On November 9, 2024, the Jordanian Cabinet approved the rationale for the 2024 Electricity Bill and referred it to the Legislation and Opinion Bureau to complete the constitutional procedures for its approval.

This project comes in compliance with the provisions of the Jordanian Constitution with the aim of enacting a permanent electricity law as an alternative to the temporary law No. 64 of 2002 currently in effect.

Objectives of the new electricity bill in Jordan

The draft law aims to regulate the electricity sector in accordance with international best practices by defining the tasks and powers of the Ministry of Energy and Mineral Resources in formulating general policies for the sector. It also aims to enhance competition and encourage investments in the sector in line with Jordan’s economic vision.

The new law includes provisions to update the legislative framework for the electricity sector, in order to achieve consistency with Energy and Minerals Regulatory Commission Law No. 8 of 2017, by granting the Commission the powers to grant the necessary licenses and permits.

Encouraging green hydrogen and clean energy projects

The Electricity Bill includes important provisions to support and encourage green hydrogen projects, which is one of the main axes of the Kingdom’s economic modernization vision. The law includes an additional clause that allows for independent self-generation and self-transmission of electrical energy, while specifying the entity responsible for issuing the energy source certificate.

The law also supports the introduction of the concept of storing electrical energy into the Jordanian energy system, in line with international best practices. This contributes to enhancing energy security and diversifying its sources in a way that serves economic development efforts.

A future vision for achieving energy security and sustainability

The Electricity Bill 2024 is a strategic step towards achieving sustainability in the energy sector in Jordan. By improving the legislative framework, promoting investments in renewable energy, and supporting green hydrogen projects, the law contributes to achieving the Kingdom’s vision for long-term economic and environmental sustainability.

Despite the challenges related to global market fluctuations and climate risks, the new draft law provides innovative solutions that contribute to reducing dependence on energy imports, enhancing local production, and diversifying energy sources, which enhances the resilience of the Jordanian economy and puts it on a more sustainable path.

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