The Future of Green Hydrogen in Jordan

[18-01-2022 11:40 AM]

BY Hamzeh S. Al-Alayani

Jordan historically is considered poor in terms of limited natural energy resources leading the energy demand to be through imported fossil fuels around 17% of GDP in 2017, equal to USD 3.5 billion, affecting the economic and civilization improvement. Therefore, as the first mover in the MENA region, Jordan had achieved a very successful energy transition by adopting renewable energy. Furthermore, the government had managed to reduce the PV projects cost and reflected that on the tariff for RE impressively, from a 200 MW bidding round in 2013 when prices were 16.9 cents/kWh; prices went down to between USD 6-7 cents/kWh in 2015 and eventually around 2.5 cents/kWh in 2019.

The previous projection indicated that energy demand forecasts for Jordan show an annual increase of 5-6 percent of Jordan’s primary energy and electricity demand. This expected energy demand obliges the government to explore several innovative strategies to embrace the energy demand for Jordanian economy growth over the following decades in terms of population and new infrastructure projects (e.g., water desalination). They are leveraging the renewable resources infrastructure and potential industrial integration to accelerate the new industry of green hydrogen development. These applications provide investment opportunities that positively contribute to the economy and job creation; the unemployment ratio is 25% (World Bank, 2021).

Jordan sets an ambitus plan for national development strategy Jordan Vision 2025, which emphasizes the country’s socio-economic development (Green Growth National Action Plan 2021-2025). Therefore, the government has demonstrated its plan to transition towards a green economy to achieve a new benchmarked economic growth without emissions (e.g., Croatia and Ireland). This approach will perform the “urgency of climate change action” (UN, 2021) and build the capacity of green hydrogen to improve the country balance sheet and achieve the targeted growth of 7.5% in 2025. Furthermore, accessing green hydrogen production financing as Germany will subsidize non-EU countries with $1bn to import the hydrogen, expected to contribute 24% of the world energy by 2050.

One of the main obstacles in Jordan is water, as the green hydrogen production requires approximately 4-6 m³/day of purified or raw water to produce 1MW of electrolysis. Therefore, the site selection for green hydrogen projects shall be carefully selected and closed to water resources and RE’s application for water treatment. In addition, Jordan has an attractive local value chain with a scalable chemical business (potassium, phosphate industries). Fertilizer products like ammonia can be sizable through green molecules, which leverage the downstream sectors, maintain a balanced integration between endeavors sustainability and economy market development, and achieve production prices below USD 1-1.80/kg.

Jordan has all the critical pieces to leverage climate change as a driver for development, diverting both national and international investments towards resilience and mitigation projects. The targeted year 2050 is very close to an economy with net-zero greenhouse gas emissions; the transition to a climate-neutral society is an urgent challenge and an opportunity to build a better future for all. The strong commitment to deep decarbonization by governments worldwide has triggered an unprecedented wave of momentum in the hydrogen industry. Financial support, regulation, clear hydrogen strategies, and targets combined with the USD 70 billion committed public funds by governments to support the hydrogen transition have caused value chains to scale up, costs to come down, and capital investment across regions to climb to new heights.

The new development opened a unique collaboration between countries in the Middle East to establish a center responsible for the technology training and finding solutions that mitigate any associated risks to build on the international knowledge to build momentum for financing and cooperation ahead of COP27 and COP28, Egypt and the UAE, respectively.

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