Energy storage
Energy storage
Business Model Description
Invest in energy storage, such as hydro, thermal and battery storage or fuel cells
Expected Impact
Address the energy scarcity and effective usage of energy through investments in energy storage, leading to the increase in the share of renewable energy.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Jordan: Countrywide
Sector Classification
Renewable Resources and Alternative Energy
Development need
Jordan scores 92.2 on SDG 7 (Affordable and Clean Energy), 85.8 on SDG 12 (Responsible Consumption and Production), and 94.8 on SDG 13 (Climate Action) in Sustainability Development Report 2019, with 'challenges remaining' subscores prevalent across indicators (1).
Policy priority
Jordan’s energy strategy 2020-2030 stresses the need to meet the expected increase in energy demand driven by industrialization, population growth, economic growth, and refugees (5). This strategy aims to boost the contribution of renewable energy to reach 14% by 2030 up from 11% in 2020 (6).
Gender inequalities and marginalization issues
Main challenges facing gender empowerment in the energy sector in Jordan are gender data availability, collection, and analysis; the weak cooperation and coordination between all stakeholders working on women empowerment; the lack of education and awareness RE technologies and entrepreneurship in rural areas for both men and women. (6b)
Investment opportunities introduction
With about 39% energy consumption increase between 2010-2018 and projected 17% energy demand growth in 2030, Jordan faces high risk due to limited grid capacity (4). Jordan imports 93% of its fossil fuel, mainly for power generation and transportation (3).
Alternative Energy
Investment opportunities introduction
To meet increased energy demand and diversify its renewable energy sources, Jordan needs to increase investment in renewable energy in electricity generation from 11% in 2020 to 31% in 2030 (7,8).
Fuel Cells and Industrial Batteries
Pipeline Opportunity
Energy storage
Invest in energy storage, such as hydro, thermal and battery storage or fuel cells
Business Case
Market Size and Environment
36.5% of Jordan's electricity consumption results from the industrial and commercial sector (12)
6385 GW (36.5%) of electricity consumption came from the industrial and commercial sector (12)
There is potential to export the technology / consultancy services to GCC and MENA region. Several players are already successfully exporting similar services.
The cost of energy storage technology is decreasing, making it affordable. Battery cost for 4-hour lithium-ion systems is 380$/KWh (13). The market is open to IPPs (BOO model) scheme.
Indicative Return
20% - 25%
A regional benchmark investor for pumped-hydro storage technology reaches 20% equity rate of return (11).
Investment Timeframe
Short Term (0–5 years)
Based on consulted benchmark project, the projected investment timeframe is expected to be below 5 years, given the availability and affordability of the required technology.
Ticket Size
USD 500,000 - USD 1 million
Market Risks & Scale Obstacles
Business - Supply Chain Constraints
Market - Volatile
Legislation
Regulation
Impact Case
Sustainable Development Need
Jordan produces excess electricity generated by different resources, including renewable energy, which exceeds the capacity of the current grid (3200 + 500 MW) (8).
The grid experiences “technical challenges” with the increasing production of power through renewable sources. (9).
Expected Development Outcome
Lower greenhouse gas emissions from conventional electricity production
Lower country's carbon footprint from electricity production
Gender & Marginalisation
Primary SDGs addressed
7.1.2 Proportion of population with primary reliance on clean fuels and technology
7.2.1 Renewable energy share in the total final energy consumption
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
People
Outcome Risks
Environmental impact linked to the production of batteries and fuel cells
Disposal of old batteries (no recycling facilities are available in the country)
Impact Classification
What
The outcome is likely to be positive, important and intended because investments in energy storage could increase the share of renewable energy.
Risk
Fire hazards and thermal runaway results from internal shorts inside a battery cell. Policy and regulatory environment are still insufficiently developed.
Impact Thesis
Address the energy scarcity and effective usage of energy through investments in energy storage, leading to the increase in the share of renewable energy.
Enabling Environment
Policy Environment
The government has established various policy and regulatory frameworks to support renewable energy generation in the country, this includes the Renewable Energy and Energy Efficiency law and the Energy Strategy 2020 – 2030.
Financial Environment
Financial incentives: Incentive schemes such as exemptions from paying grid connection fee. Investment law, 2014 offers incentives - transferred revenue and profits, liquidated investment, take out of all capital, etc.
Fiscal incentives: Tax exemptions for renewable energy systems and equipment from customs duties and sales tax by Renewable Energy and Energy Efficiency law of 2012.
Other incentives: Award of long-term power purchasing agreement to grid-connected renewable energy projects. Permission to produce and sell electricity to the grid from renewable energy sources.
Regulatory Environment
Currently, there is a lack of specific legislation regulating electricity storage
Marketplace Participants
Government
Ministry of Energy and Mineral Resources, government is investing in solar photovoltaic (PV) + Power Purchase Agreements (PPA) storage agreement with two projects (one is complete, while the other is under procurement).
Multilaterals
EBRD and KFW are active in this field.
Target Locations
Jordan: Countrywide
References
- (16) "Qandil, Mohammad, et al. (2019). A Stand-Alone Hybrid Photovoltaic, Fuel Cell, and Battery System: Case Studies in Jordan. Journal of Energy Resources Technology. "