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Energy Efficiency Challenges in Jordan's Economy


 
 

Introduction

Jordan is grappling with significant challenges in its energy sector, particularly concerning energy efficiency, which is vital for the nation's economic stability and sustainability. The main electricity-consuming sectors, including residential, industrial, commercial, public services, agriculture, and water pumping, face numerous obstacles that lead to high energy costs, reduced market competitiveness, and increased greenhouse gas emissions. These challenges collectively impede Jordan’s progress toward achieving affordable and reliable energy services. Despite the establishment of the Renewable Energy and Energy Efficiency Law in 2012 and the ambitious targets set by the Jordan Energy Strategy 2020-2030, which aims for a 9% annual reduction in energy consumption across all sectors, Jordan's electricity usage has increased, climbing to 19,306 GWh in 2021 from 17,574 GWh in 2017.

Efforts through the National Energy Efficiency Action Plans (NEEAPs) have seen mixed results. The first NEEAP (2012-2014) with its 11 sectoral measures, aimed for a 7.6% reduction and achieved a 40% realization of that goal, saving 361 GWh. The more extensive second NEEAP (2017-2020), which introduced 26 sectoral and nine cross-cutting measures to save 17.6% or 1975 GWh, has yet to report official results. For energy efficiency measures to be successful, there is a long way to go for Jordan.

 
 

Challenges

The inefficiencies in energy use in Jordan have profound economic consequences, impacting not just the financial dynamics of businesses and households but also the broader socio-economic environment by exacerbating inequalities. These inefficiencies contribute to increased greenhouse gas emissions, affecting both global climate change and local environmental degradation. On a social level, they deepen disparities in energy access, particularly affecting vulnerable communities and increasing social divisions. The existing measures, such as energy audits and efficiency incentives, often fall short due to their lack of scalability, accessibility, and the poor engagement of key stakeholders. Other significant barriers include outdated infrastructure, limited access to modern technology, financial restrictions, a general resistance to change and resource constraints among small and medium-sized enterprises (SMEs).

These challenges are compounded by the absence of dedicated personnel for energy issues, low management interest and priority, and skepticism regarding the actual savings potential. Significant energy losses in Jordan’s transport networks and water systems, which represent about 15% of the country’s total electricity consumption, underscore the urgent need for comprehensive energy efficiency strategies. This need is further complicated by a lack of cohesive planning across various sectors, including deficiencies in public transport systems that could support sustainable transportation alternatives. Increasing energy demands in residential, industrial, and commercial sectors, as well as public services such as government buildings, educational institutions, and healthcare facilities, are compounded by substantial challenges in the agricultural sector, which relies heavily on electricity for irrigation. Despite various incentives, progress is hindered by a general lack of awareness about the benefits of energy-efficient practices, regulatory barriers, low visibility of businesses in energy programs, mistrust in energy services procurement, and difficulties in understanding consumption patterns. These factors collectively highlight the critical need for holistic and integrated approaches to tackle Jordan’s complex energy efficiency challenges effectively.

 
 
 
 

Suggested Approaches

To counteract these challenges effectively, Jordan should promote innovation among entrepreneurs and businesses to embrace advanced digital tools, data analytics, and Internet of Things (IoT) technologies. Implementing sophisticated monitoring systems, artificial intelligence (AI) algorithms, and smart meters can facilitate real-time energy management and predictive analytics, crucial for reducing costs and improving grid stability. Additionally, mobile applications for energy management and enhanced consulting services should assist consumers and organizations in identifying inefficiencies and retrofitting facilities with energy-efficient technologies. This comprehensive strategy aims not only to achieve Jordan's rigorous energy efficiency goals but also to support economic growth, environmental sustainability, and social equity, thus ensuring a resilient and prosperous future for all Jordanians.

 
 

Ideation Hub

We have offered viable solution approaches for each of the four sectors to spark your creativity, but we highly encourage you to bring your originality and unique perspectives to the table.

You can use these ideas as a starting point, but we urge you to think outside the box. Let’s come up with pioneering ideas to transform Jordanian industry.
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