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To mitigate the effects of the disruption in gas supply from Egypt, which resulted in significant losses at the National Electrical Power Company (NEPCO), which in turn had to be financed through the budget, the authorities initiated an energy policy focused on diversifying the energy mix. In this regard, a liquefied natural gas (LNG) terminal in Aqaba was expected to have become operational by mid-2015, and LNG supply is expected to double within the next three years. Renewable energy plants are also expected to start operations in 2016 to ease energy supply constraints. Coupled with the planned tariff increases, these efforts are designed to help NEPCO achieve cost recovery by 2018.

With a view to reducing dependence on imported energy and enhancing domestic energy production, Jordan is focussing on shale oil, natural gas, renewable energy, and nuclear energy. It is envisaged that by 2020, crude oil and other oil products will constitute 55%, energy from renewable sources 10%, natural gas 21%, nuclear energy 6%, and shale gas 14% of the energy mix.

Jordan is also rich in oil shale and renewable energy resources that have not been exploited on a commercial scale yet. It has the 4th largest oil shale resources in the world with an estimated 30 billion barrels of oil in its oil shale deposits. Moreover, the government encourages the private sector investment in the development of the energy sector, as part of the energy master plan for the year 2020, that includes electricity, natural gas, oil shale, and renewable energy industries. (...)

Recognizing the far reaching needs of energy for carrying out an ambitious economic growth and sustainable development and to ensure energy security, Jordan successfully launched liquefied natural gas terminal in Aqaba Port in line with international standards.

Additionally, the Jordan Bio-Gas Company Ltd also generates electricity by converting organic waste into methane gas. The entity is a joint-stock company owned by the Central Electricity Generation Company (CEGCO) and Greater Amman Municipality.

Under the Strategy, the Government aims to access cheaper sources of energy including renewables and shale gas. Furthermore, the Strategy also seeks to reduce line losses and limit demand through increasing electricity tariffs and eliminating preferential rates offered to security agencies, charitable organizations, employees of the electricity company, and free electricity for street lighting. Additionally, the Government has also started to adjust electricity tariffs (Table 4.7). The adjustment process started in 2013 and is expected to be finalised in 2017.

The principal legislation on the electricity sector is the General Electricity Law of 2002. The Law aims to develop the sector in accordance with public interest; encourage local and foreign investment; and strengthen the development of the Energy and Mineral Regulatory Commission. The Law is administered by the Ministry of Energy and Mineral Resources (MEMR), which is the body responsible for the energy sector including: (...) promoting the use of renewable energy (...) Additionally the Law allows private sector independent power producers (IPPs) to obtain a licence to generate electricity based on thermal power stations and on renewable energy. (...)

(...) In the same context, the government issued the "Renewable Energy and Energy Efficiency Law" in 2010, which aims at laying the foundation and fostering investments in this vital sector.

The Renewable Energy and Efficiency Law of 2012 followed by a set of by-laws, which were modified in 2014, established the renewable energy strategy for Jordan. Feed-in tariffs were also announced in 2012, setting a buy-back rate of 135 fils per KWh from solar power and 80 KWh from wind energy. In 2014 an additional by-law exempted renewable energy and energy efficient systems from sales tax and customs duties.

The Renewable Energy and Efficiency Law allowed companies to submit proposals for projects within this area. Of over 60 proposals submitted, 12 Power Purchase Agreements were signed by March 2014 of which seven projects are underway. One of these was the 117 MW capacity wind project planned to be built in 2015. In addition, 12 Solar Investment agreements were signed in 2013, aiming to generate electricity exceeding 200 MW in 2015.