The acceleration of economic development and rising living standards have
made energy security a top priority for policymakers worldwide.
Securing energy is
particularly challenging for Jordan, which suffers from a scarcity of natural
resources, and lives in a region rife with instability and conflicts.
اضافة اعلان
Notwithstanding
reform efforts to reduce dependence on imports, and some progress in
diversifying the energy sources, energy security remains critical: the country
imports around 94 percent of its energy, which represents approximately 10
percent of GDP. The growing domestic demand, which increases at a yearly rate
of 3 percent, further adds to the pressure to come up with a strategy for a
more sustainable energy sector.
Jordan’s Economic
Modernization Vision (2033) sets ambitious targets, including investment in
renewable energy, reducing energy consumption via increasing energy efficiency,
and agreements with other countries. Creating an enabling environment should go
hand in hand with the involvement of all key stakeholders from energy and
related sectors, to move on to the implementation phase in creating jobs and
cementing sustainable growth.
Global energy
investment is on course to jump by more than 8 percent in 2022 and hit $2.4
trillion, with a notable clean energy investment exceeding $1.4 trillion this
year and accounting for almost three-quarters of the growth in overall energy
investment, according to the International Energy Agency.
The total energy bill for consumers in 2022 looks set to exceed $10 trillion for the first time.
Renewable energy
growth is poised to accelerate in 2022 as concern for climate change and
support for environmental, social, and governance considerations grow. Demand
for cleaner energy sources from most market segments accelerates. At the same
time, the US’ plan to fully decarbonize the US economy is helping spur activity
in the renewable sector that will likely drive further growth and open new
avenues for renewable energy growth.
The current
inflation, a sustained surge in oil and gas prices, and geopolitical tensions
related to the Russia-Ukraine war are rising. These factors have created a
hugely challenging environment for businesses, governments, and consumers. The
energy sector is no different. Almost half of the additional $200 billion in
capital investment in 2022 is likely to be eaten up by higher costs rather than
additional energy supply capacity or savings. Furthermore, the prices of solar
panels and wind turbine technologies crucial to the energy transition have
grown by between 10 percent and 20 percent since 2020, with continuing supply
chain disruption amid logistics-related cost pressures after a decline. The
total energy bill for consumers in 2022 looks set to exceed $10 trillion for
the first time.
It is necessary to
reflect both energy demand and supply in a synergic manner to ensure the
transition to a sustainable energy sector.
The circular
economy is critical to a sustainable growth of the energy sector, as it reduces
waste, increases resource security, and provides additional financial value and
sustainability credentials.
Furthermore, focus
should be put on improving energy efficiency and optimizing energy demand
management, starting with transportation (which alone is responsible for almost
half of the total energy consumption), the water sector, and households. The
energy sector will transform by adopting an environmentally sustainable and
economically viable energy system in the Kingdom by developing hands-on,
business-driven projects.
Going forward, the
private sector and the government should collaborate to explore new avenues
against a backdrop of potentially supportive policies from an administration
focused on combatting climate change in energy and industry, which includes
investment in wind, solar, battery, and EV supply chains; green hydrogen;
long-duration energy storage; transmission; preventing energy waste; circular
economy in fertilizers and agriculture, and other sectors critical to renewable
energy growth.
The industry will
likely benefit as fresh capital becomes available, the transmission process is
streamlined, and new technologies are commercialized.
The writer is a board member of a Jordanian public-sector
government investments management company and a regular commentator on regional
energy and industrial matters.
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