Jordan Electric Power Co., cost-effective demand-response management system

Jordan Embraces Demand Response

June 8, 2017
Rapid load growth in Jordan motivates the use of a cost-effective demand-response management system.

Jordan is challenged by a lack of local natural energy resources critical for social and economic development, thus the country’s electric energy needs are predominantly dependent on the imported supply of oil and gas. This reliance on foreign energy imports consumes a significant amount of gross domestic product, making demand response (DR) and energy efficiency important options for increasing the country’s energy security and reducing its vulnerability to the changing global conditions.

Jordan’s expanding economy, growing population and rising standard of living all depend on energy services. Because the country currently imports 96% of its energy supplies and its electricity demand is projected to rise at an annual rate of 6.4% from 2015-2030, these challenges give rise to many issues:

• Growing demand is putting stress on the current system, thus increasing energy costs and investment requirements.

• Economic growth is reduced because of the high financial burdens on business and domestic customers.

• New supply-side investments are vulnerable to the uncertainty of future energy prices.

• Dependency on foreign natural energy sources increases vulnerability of the energy supply to factors beyond Jordan’s control.

Utilities manage energy efficiency and demand-side management (DSM) programs and business operations to reduce operating costs, drive energy savings, embrace DSM business process management and customer engagement, and develop new strategies to improve cost-effectiveness and customer satisfaction. Improving electric demand-side efficiency by reducing unnecessary consumption and improving the efficiency of the consuming sectors, where possible, enables existing supplies to serve a larger demand base, thus delaying investment in costly supply-side options. This led Jordan to plan for an investment of US$15 billion in renewable and nuclear energy.

Renewable Energy

Jordan’s target for generation from renewable energy sources is 1600 MW by 2020. Solar energy projects are already in commission, and the combined installed capacity of wind and solar plants in commission by the end of 2016 is expected to be 376 MW.

The national energy strategy for 2007-2020 was created to boost reliance on domestic energy sources from 4% to 40% by the end of the period. The interconnected system in Jordan consists of the main generating power stations as well as a 132-kV and 400-kV bulk transmission network that connects the power stations with load centers.

Electricity System

The electricity sector in Jordan is experiencing major growth and capital investment is increasing, which is placing a significant burden on the country’s economy. The current tariff regime does not reflect international market prices and numerous complex subsidies are in place. Therefore, the provision of a reliable energy supply at a reasonable cost is a crucial element for the strong economic sustenance of Jordan.

Energy remains perhaps the biggest challenge for the continued growth of the country’s economy. This was the primary reason Jordan began importing liquefied natural gas from several countries in June 2014, following the completion of a gas terminal in the Red Sea Port of Aqaba. The key players in the electricity supply industry in Jordan, including their respective roles and duties, are as follows:

• Ministry of Energy and Mineral Resources oversees the overall energy scene, formulates the strategy including electricity, and negotiates with other countries to reach beneficial exchange agreements.

• Electricity Regulatory Commission licenses generation, transmission and distribution utilities, setting electricity tariffs and monitoring the performance of the licensed utilities.

• National Electric Power Co. (NEPCO) is responsible for the purchase of power from generation utilities, controlling power exchanges through interconnections with other countries, purchasing natural gas on behalf of the government and supplying it to generation utilities. NEPCO also manages the economic dispatch of generation and transmission systems as well as the sale of electricity to three distribution utilities, including Jordan Electric Power Co. (JEPCO), Electricity Distribution Co. (EDCO) and Irbid District Electricity Co. (IDECO). It is a 100% government-owned utility operating on a commercial basis.

• Nine principal customers are connected to NEPCO’s network. The Jordan Grid Code defines a principal customer as a customer that is directly connected to the transmission network (132 kV and above) to which energy is supplied to the customer.

• The three distribution utilities each sell electricity to customers within a defined geographical area, with JEPCO responsible for distribution in central Jordan, EDCO responsible for southern and eastern Jordan, and IDECO responsible for northern

• NEPCO is responsible for the transmission of energy on the 400-kV and 132-kV systems and selling energy to the three distribution utilities. In addition to being responsible for the National Control Center, NEPCO operates the transmission system, which spans 4121 km (2561 miles), and the substations, which have a total installed capacity of 11,484 MVA.

NEPCO also is responsible for the purchase of natural gas needed for the generation of power on behalf of the government. It is in charge of power exchanges with Egypt, Syria and the Palestinian Authority. During 2015, through the energy exchanges transmitted by the Jordan-Egypt interconnector, Jordan imported 604 GWh and exported 50 GWh.

Consumption Management

Changes in energy consumption management practices and energy-efficient measures driven by the energy tariff structure used by customers can provide benefits by avoiding the costs of investing in more generating capacity. As energy consumption is reduced throughout the year, demand on the transmission system is reduced, thereby decreasing marginal energy and capacity costs. The program was introduced in two stages.

In stage one, the organizing committee of the electricity sector, together with NEPCO, launched a study to assess the economic feasibility and market potential for further development of the electric power grid operation. The pilot project was designed to minimize the significant increase in the system maximum load that coincided with the morning period during high summer temperatures, namely 25°C to 35°C (77°F to 95°F), when there was a decline in generation.

During the summer, the NEPCO transmission system experiences two daily peak demands, morning and evening. Thus, there are three energy tariff rates for the nine principal customers connected to NEPCO’s network. Changing the maximum load tariff period for the principal consumers from the system peak load of 7 p.m.–10 p.m. to 12 p.m.–3 p.m. effectively resulted in the peak load remaining relatively constant throughout the maximum load tariff period.

Stage one of the project resulted in a morning maximum demand reduction of 60 MW. This effectively removed the need for load shedding in the event of a shortage of generation capacity or, alternatively, using the emergency gas turbine to produce 60 MW at a cost of US$5 million.

Stage two involved studying the impacts of DR — a globally accepted practice to keep the system maximum load within manageable limits, thus avoiding the use of a costly generation plant or deferring investment in new generation capacity. NEPCO, in partnership with its principal customers, assessed the impact of DR. If successful, DR could be extended to other customer classes, for example, commercial, small industrial and residential customers. However, DR imposes critical parameters that can have a direct impact on the customer’s convenience and production.

For example, while analyzing energy costs, the highest cost of generation in Jordan is 175 fils/kWh (US$0.247 cents/kWh); this applies to four generation plants, each with an installed capacity of 20 MW to 30 MW. Therefore, the DR program can only partially avoid the need to operate the four generation plants.

DR Pilot Project

Jordan’s DR pilot project was applicable to the principal customers, which were equipped with smart meters, communications and information technology systems. Agreements were put in place for incentive and compensation payments and non-peak-time penalties. NEPCO was responsible for the program’s administrative costs, including customer outreach, awareness, monitoring, evaluation and marketing.

The DR pilot project resulted in a direct savings of US$6 million in NEPCO’s operating costs and indirect benefits of operating a more efficient transmission system without bottlenecks. DR also provided the system the benefit of being able to handle unforeseen events. Similarly, because of the tariff changes, the principal customers benefitted from a reduction in their energy costs.

Before expanding the use of DSM to more customer classes, further study is required on the impact of the variables attributed to the increasing use of renewable energy. ♦

Mazen Khalil Afif Alnabulsi earned a BS degree in electrical power engineering from Donetsk University (Ukraine) in 1984 and joined the National Electric Power Co. in 1987. Initially, he worked as an operations engineer in the National Control Center before moving into planning in 2004. He was appointed cooperate planning section head in 2005. Since 2007, Alnabulsi has served as operations section head at the National Control Center. His responsibilities include review panel membership for the transmission grid code, transmission system losses and transmission system expansion planning.

Ibrahim Hasa Inbrahim Ali holds a bachelor’s degree in economics from Whran University in Algeria in 1984. His specialized business activities include energy efficiency, demand-side management and tariffs. Currently, he is section head of the operational studies department at the National Electric Power Co., where he is responsible for feasibility studies on demand-side management and energy efficiency.

Sidebar: Jordan’s Generation Profile

The Jordan Electricity Authority transferred responsibility for the generation, transmission and distribution sectors to the National Electric Power Co. in 1996. In 1999, these three sectors were privatized; generation is now the responsibility of the following utilities:

• Central Electricity Generating Co., a private utility that operates several plants, including some renewable energy plants, with a nominal capacity of around 1669 MW

• Samra Electric Power Generation Co., a 100% government-owned generation utility that operates one power plant with a nominal capacity of 380 MW

• Four independent power producer utilities, including AES Jordan, which has a combined cycle generating plant with a capacity of 380 MW; Al-Qatraneh Power Generation Co., which has a combined cycle generating plant of 380 MW; Jordan Wind Co. (JWPCO), which has an installed wind farm capacity of 117 MW; and Hamsuna Photovoltaic Co., which has an installed solar plant capacity of 359 MW.

About the Author

Mazen Khalil Afif Alnabulsi | Operations Section Head, National Control Center

Mazen Khalil Afif Alnabulsi earned a BS degree in electrical power engineering from Donetsk University (Ukraine) in 1984 and joined the National Electric Power Co. in 1987. Initially, he worked as an operations engineer in the National Control Center before moving into planning in 2004. He was appointed cooperate planning section head in 2005. Since 2007, Alnabulsi has served as operations section head at the National Control Center. His responsibilities include review panel membership for the transmission grid code, transmission system losses and transmission system expansion planning.

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