Adaptation to Climate Change
in the Water Sector in the MENA Region
24.06.2013 Workshop
‘Workshop:
“Energy Farming: a Feasible Substitute for Groundwater Overabstraction?”
Monday, 24th of June 2013 – Kempinski Hotel, Amman
Minutes of Meeting
Background:
Azraq basin is one of the groundwater basins that have been over-used for decades.
While precipitation (50 mm/year) is scarce in that region, the total abstraction is twice
the natural recharge rate. Azraq basin is a desert; the climate is hot and dry in summers
and fairly wet and cold in winters. Farming in Azraq and North Badia (the agricultural
hotspots in Azraq basin) is therefore completely dependent upon groundwater pumped
irrigation water. There is a big need for taking measures to reduce abstraction and
manage the available groundwater resources sustainably.
The Highland Water Forum is a stakeholder dialogue that is mandated with the task of
elaborating a participatory and sustainable groundwater management action plan in the
Highlands. The Highland Water Forum fosters participation by involving stakeholders
from the governmental sector, the local community, and the farmers in the decisionmaking process to identify measures to reduce groundwater over-abstraction and plan
for the future. The project “Energy Farming to Save Groundwater” is a direct result of
the Highland Water Forum consultations.
The Regional Technical Cooperation Programme, “Adaptation to Climate Change in the
Water Sector in the MENA Region (ACCWaM) is a GIZ programme located in Egypt
and implemented in partnership with the Arab Ministerial Water Council (AMWC) of the
League of Arab States, Dept. Environment, Housing and Sustainable Development, the
Arab Centre for the Study of Arid Zones and Dry Areas (ACSAD), and the UN Economic
and Social Commission for Western Asia (ESCWA).
The programme has been initiated in 3 countries; Egypt, Lebanon and Jordan with an
overall objective to improve the capacities of regional and national water sector
institutions to develop and implement strategies for adaptation to climate change. The
programme will be implemented in 2 phases of 3 years each starting in 2011 until 2017.
The Adaptation to climate Change Programme proposed two pilot projects focusing on
sustaining groundwater resources in the Azraq basin through a combination of rainwater
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harvesting a shift from irrigated agriculture to solar energy farming. The two projects will
be implemented through the Highland Water Forum secretariat.
The Highland Water Forum is a joint initiative of the Ministry of Water and Irrigation and
the German International Cooperation (GIZ). It was formally established under the
patronage of His Royal Highness Prince Faisal Bin Al Hussein in May 2010.
The Forum stemmed from the urgent need to find sound solutions to stop overabstraction and implement a sustainable groundwater management of the Azraq Basin.
It is one important tool for initiating a national dialogue among all concerned parties. It
provides a place for discussing mutual concerns and involves all in the decision making
process. The stakeholders include farmers, members of the local community,
representatives of the related official institutions (governmental and nongovernmental)
as well as the donors’ community. The Highland Water Action Plan is aiming to reduce
groundwater over-abstraction in the Highlands by recommendations and tasks
proposed by the forum members under the supervision of MWI and in line with the
National Water Strategy developed for the years 2008-2022. Through diagnosing
problems and challenges and finding solutions, the results of the working sessions of
the Forum are usually submitted to the higher Steering Committee which includes
Secretaries General of the concerned governmental institutions as well as donors
involved in the water sector. The action plan includes the following 4 main pillars:
1. Develop a legal and institutional framework that enables the concerned
governmental institutions to control illegal practices and to adopt proper
procedures and to enforce laws and by-laws efficiently.
2. Increase on-farm water use efficiency and encourage trends towards planting
crops with low water requirements and high economic returns.
3. Find new investment opportunities, especially for farmers who want to quit the
agricultural work.
4. Develop the local community through raising their awareness on water problems
in Jordan, particularly in Al-Azraq basin, and to provide them with suitable skills
and equipments for conserving water resources.
The objective of the workshop:
This workshop was organized to present the results of the “Photovoltaic Energy-Based
Farming in Jordan” study, an adaptive measure for managing the effects of climate
change. To discuss the related institutional, judicial and technical aspects which render
energy farming a feasible option to substitute investing in agriculture in the Azraq
aquifer area. Also, to start a national dialogue between the related institutions and
define synergies in preparation for the institutionalization of such an initiative.
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The Workshop venue and agenda:
The workshop convened at Amman Kempinski Hotel. It was attended by participants
from the Ministry of Water and Irrigation, Water Authority of Jordan, and other related
ministries like Ministry of Energy and Mineral Resources, Ministry of Trade and Industry,
Electricity Distribution Company (EDCO), Jordan Standards and Meteorology
Organisation, the Royal Scientific Society, farmers and some representative of the
donor community. Please consult annexes (1) and (2) for the agenda and the list of
attendees.
The workshop proceedings:
The workshop was moderated by Ms. Nour Habjoka, the thematic leader of the
Highland Water Forum. She started by welcoming the participants.
Eng. Ali Subah, Assistant Secretary General of the Ministry of Water and Irrigation, then
welcomed the participants. He thanked the ACCWaM regional programme for their
support to the Ministry represented in two initiatives; the rainwater harvesting and the
solar farming in al-Azraq groundwater Basin. Mr. Subah elaborated that Jordan imports
more than 96% of energy resources and loses more than 1 billion JOD every year
because of the intermittent gas supply coming from Egypt. Mr. Subah insisted that
renewable energy is an important source of energy that cannot and should not be
ignored. He went on to explain that solar farming came from the farmers of the Highland
Water Forum members. The farmers support the idea of substituting parts of their
irrigated lands with solar photovoltaic plants provided that they are feasible and
generate revenue. Mr. Subah stressed the support of the Ministry of Water and
Irrigation of such initiatives and extended his thanks to GIZ, ACSAD and also USAID for
their support in this field of intervention.
Nour Habjoka presented the agenda and the objective of the workshop then briefed the
participants about the ACCWaM Programme’s intervention in Jordan. She then talked
about the Highland Water Forum initiative and the evolution of the solar energy idea as
a feasible substitute for agricultural activities. Solar farming topic was discussed by the
members of the Highland Water Forum. It is about starting a dialogue between the
Water and the Energy sectors about water-energy synergies and interrelations and to
tap into the knowledge of the participants as resource persons regarding the technical
and financial feasibility of energy farming. In that sense, this workshop marks the onset
of cooperation between MWI and MEMR on the topic of groundwater management.
Please consult Annex (2) for Nour Habjoka’s presentation.
Afterwards, two presentations were given. The first, entitled “Photovoltaic Study:
Results and Discussion”, was presented by Jens Altevogt from RENAC, and the second
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entitled “Solar Farming in Jordan, is it profitable?” was presented by Mr. Martin Baltes
from GIZ (see Annex 3 for the farming systems in these areas). Following is a summary
of every presentation as well as the discussing that preceded it:
Mr. Jens Altevogt, the representative of RENAC, the Renewables Academy Company
which conducted the feasibility study of the solar farming in Al-Azraq Groundwater
Basin, talked about the technical feasibility of a decentralized grid-connected
photovoltaic (PV) system that could be installed on farmland. A sample farm in North
Badia area was chosen as a case study. Three scenarios were developed depending
on three different agricultural areas and by using two different PV modules; the monocrystalline and the poly-crystalline as follows:
Maximum size
Small farm size
Minimum size
200-270 du
40 du
5 du
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Adaptation to Climate Change
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Figure 1 (left): The map of Jordan, highlighting Azraq groundwater basin.
Figure 2 (right): The map of the agricultural hotspots in Azraq groundwater basin
(North Badia, Azraq and Jiza).
Mr.
Altevogt then described the components of the PV system. He mentioned that an area
of 1,024 m2 (almost 1 du) is required to install a five row system with a capacity of 100
kWp to produce 170 MWh/yr, which is enough to satisfy the electricity demand of 40 to
50 households in Jordan. Mr. Altevogt assured that for a small PV power plant (e.g. 100
kWp), the connection and operation synchronization to the grid is state-of-the-art and
can be done safely as long as the voltage capacity of the grid is reliable. Based on his
own calculations, the investment cost of a basic turnkey PV system with a capacity of
100 kWp is around 150,000 JOD taking into account that PV modules from local
manufacturers are more costly than the international market. In conclusion and based
on the results of the feasibility study, Mr. Altevogt asserted that because of the good
solar irradiation in Jordan and the current PV market prices and the indicated FIT tariff,
installing and operating small to large scale PV systems in Al-Azraq Basin area is
feasible. He added that the connection to the grid is technically possible; however, this
needs to be verified according to the standard procedures of the grid operator for each
individual case. Mr. Altevogt recommended building a pilot PV plant as a starting point
to showcase the actual feasibility and implementation of such projects especially that
the costs of the PV plants have decreased significantly in the recent years and it is
proved that selling electricity will give a higher income per dunum than agriculture.
Please consult Annex (4) for Mr. Altevogt’s presentation.
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Comment: Energy farming by no means equals eradicating agriculture. It is a means of
providing livelihoods for people who no longer can afford their agricultural investments.
Mr. Martin Baltes, GIZ energy expert, presented the business case of installing a 100
kWp PV power plant on 1 dunum1. Two main questions would that a farmer would ask
are:
Is the net income from the sales of solar electricity sufficient to replace the farm net
income and earn a little bit more? and
Is the income from agricultural production less risky compared to running a 100 kWp PV
power plant and depending on the sun for a monthly income?
Mr. Baltes explained that according to a study
that was conducted by GIZ in 2010, an
average yearly profit of 250 JOD2/ du can be
obtained from agriculture. Building a 100 kWp
PV power plant on the same area will result
in generating 160 MWh/yr with a total cost of
150,000 JOD. The FIT was calculated at
0.138 JOD/MWh3 and a payback period of
10-15 years. After deducting the monthly
bank payments and the operation and
maintenance costs (of 5,000 JOD/month) the
net income that farmer can obtain will be
around 1,000 JOD/yr. After paying back the
cost of the investment to the bank, the net
income per dunum will jump to 15,000 to
20,000 JOD (assuming that FIT does not
change). Please consult the Box to the right
for summarised information about the
scenario that was presented during the
workshop. Please consult Annex (5) for Mr.
Baltes’ presentation.
Box 1: Summary of the calculation that
was presented during the workshop:
For a project with a lifetime of 20 years:
-
-
-
-
Farmer installs a Photo-Voltaic (PV)
plant on 1 du,
Turnkey cost of 150,000 JOD,
As a result, the farmer forfeits annual
agricultural net profit from agriculture
of 250 JOD,
At the same time, his small 100 kWp
generates 160,000 kWh per year
With a FIT of 0.125/kWh, his gross
earnings are in the range of 20,000
per year,
For the first 10 years, the farmer will
have a net income of 1,000 JOD/yr
after deducting operation and
maintenance,
monthly
loan
paybacks, and bank interest,
For the next 10 years, the farmer will
have a net income of 15,000 JOD/yr
(assuming FIT of 0.138 JOD/kW
does not change over time).
1
1 dunum (du) = 1,000 m2 = 0.1 hectare
2
1 Jordanian Dinar (JOD) = 1.08 Euros = 1.41 US Dollars (Jul-2013).
The current FIT is 0.120 JOD/kWh. For sustainability and practicality reasons, the study took into
consideration that the panels will be supplied by a local supplier, which by Jordanian regulations
stipulates an additional 15% to the usual solar tariff, hence 0.138 JOD/kWh.
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Questions and answers session:
The discussion round that followed Mr. Baltes’ presentation included the following
questions and comments:
Question: is it enough to build only one pilot to demonstrate the feasibility? Which must
come first the institutionalization or the pilot phase?
Answer: The calculations clearly demonstrate that producing energy on 1 du compared
to farming it is feasible. Experience elsewhere in the world shows that such a project is
technically and financially feasible for farmers and the government. The challenge lies
within the institutionalising the process, developing standard procedures in the relevant
Ministries, and defining/organising the relationship between the concerned parties.
That will take time and coordination. Therefore, building a pilot PV plant on the ground
is very important step, not only to showcase and attract people but also to document the
process and elaborate procedures for up-scaling. To answer the question, pilot phase
and institutionalization must go in parallel.
Question: why does the project select a farmland not a governmental land to start with?
Why to put the farmer at risk? Why not to start with developing a national policy that can
govern both water and energy?
Answer: the main objective of the pilot project is to use solar energy as a tool to reduce
groundwater over-abstraction specifically. That is why the project is going to build the
solar plant on a farmland. The idea is to have a demonstration site in a farm, one that
other farms can see, visit, and learn from. Since it is a demonstration and all expenses
will be covered by the project, the farmer will not be at risk.
Question: did you conduct a survey to measure the willingness of farmers to such a
project?
Answer: Many farmers have been losing money over the last 20 years; therefore they
always try to look into other viable alternatives that offer more benefits than agriculture.
Within the Highland Water Forum there are 25 representatives of the farming
community, who have discussed this idea and think that it could be an option for willing
farmers. So there is an acceptance among farmers and they are ready to take loans.
Question: Is there already clear selection criteria for the pilot site?
Answer: not yet, the selection criteria will be developed with all concerned ministries
(including the ministries of environment and agriculture).
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Comment: In Ma’an Development area, investors can rent the 1 m 2 for 200-300$ to
build PV plants. However, investors also worried can they be sure that they will receive
their money from the government? What is the guarantee?
Comment: this project was initiated by MWI based on a recommendation from the
members of the Highland Water Forum for one main purpose which is to reduce the
groundwater abstraction, so please don’t look only on the pure business side of it but
rather from a national benefit point of view. We all know that any investor will only be
looking after his own investment, but then it is the role of the MWI to control and
monitor.
Question: Such a project requires high level of coordination between all related
institutions as well as with the private sector, perhaps even changing in policies might
be needed. For fear of expanding the cultivated areas, is there a clear methodology for
how the whole thing will be regulated and monitored?
Answer: If the levels of regulation and monitoring remain as they are, there is a risk that
the cultivated areas expand – increasing groundwater exploitation. It is of utmost
importance that all concerned parties cooperate to prevent that from happening. The
suitable regulatory and supervisory environment should be defined and implemented by
the concerned ministries themselves, supported by the project.
Question: After the creditors have been paid (in this scenario, after 10 years), should
the FIT remain so high or should it be lowered?
Answer: There are two opinions. On the one hand, high FIT are justified because it
makes sense to pay a high FIT as a measure for regulating water abstraction (demand
management) as opposed to paying for mega national projects (supply). On the other
hand, high FIT are risky because they drive high investment costs.
It makes sense, then, to investigate the impact of such high FIT on the state budget, as
opposed to the costs incurred by generating electricity using fossil fuels. Since most
(80%) of the investment in PV plants is paid up front, companies which provide the
services (the contractor, the seller of PV materials, etc.) inflate the costs of the
infrastructure.
Comment: Solar cooling, which a joint project between GIZ, the Ministry of Environment
and the Ministry of Energy and Mineral Resources, is an example which could be of use
to this initiative. It started with a pilot phase during which the selection criteria were
developed in cooperation with the related ministries. Currently it is working on the
institutionalisation. To have a research project to look into the institutionalization might
be a helpful idea.
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Comment: MWI must be transparent in setting the selection criteria in cooperation with
NEPCO and EDCO. The MWI will not stop agriculture in the Highlands but at least to
study what other options might be considered by the MWI to obtain the highest value of
each 1m3 of water
Comment: at the end of the day, it is the choice of the farmer/investor whether to use
his land to grow higher value crops or to build a solar energy plant.
Conclusion:
The workshop “Energy farming: a feasible substitute for groundwater over-abstraction?”
was held to present the results of the feasibility study which was conducted by RENAC
on the technical and financial feasibility of using solar energy in Al-Azraq Groundwater
Basin area (North Badia and Azraq District).
The results of the study clearly show that solar energy is a viable option for farmers in
the area, however, financial conditions (payments, payback period…etc) must be
studied per case. The grid connection is good especially for demonstration sites,
however for large-scale PV plants, grid connection should be verified.
The Ministry of Water and Irrigation, who is leading the initiative, is committed to the
outcomes of the study and to implementing a pilot
Farmers are willing to take this opportunity and go for viable options other than
agriculture. Selection criteria have to be developed and interrelationships and synergies
with other related institutions and private sectors must be defined. There is a need to
document the process and draw lessons learnt.
Technical and legal aspects of connecting the solar plants to the grid need to be further
investigated and documented.
Next steps:
-
Establish a joint committee comprising members from relevant ministries and
organisations (e.g. MWI, MEMR, MoENV, MOA, RSS).
-
Put in place selection criteria to determine the location of the pilot project.
-
Prepare the tendering documents.
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