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Power-Gen Middle East 2014 1

Building the World's Largest Reciprocating

Engine Power Plant in Jordan, 600MWPower-Gen Middle East, Abu Dhabi, October 2014

Al Azzam, Amani Mohamed 1; Koul, Upma2 and Paldanius, Risto3

1. Abstract

In the energy industry, known for its inertia, technological change is often slow and gradual.

However, with thorough technical and financial analysis new exiting opportunities can

emerge. This joint paper with the National Electric Power Company (NEPCO) of Jordan and

Wärtsilä Corporation describes one such a project.

Such a new opportunity arose in Jordan in the fall of 2010, when the NEPCO published a

tender for an independent power producer (IPP) project, the third such project in the country

(hence the name "IPP3"). What separated IPP3 from the two previous IPP projects was its

size and technology: it included an option for a 600 MW power plant using tri-fuel

reciprocating engines.

This paper is divided into two sections. The first section represents NEPCO's needs and

approach to the IPP3 project. An analysis of the power demand trends, existing portfolio, and

fuel supply issues in Jordan provides background for the paper. The main steps in NEPCO's

analysis are later analysed in detail, leading to the conclusion that IPP3 should be

approximately 600 MW and based on reciprocating engines. The second section of the paper

represents Wärtsilä’s view, the equipment supplier and EPC consortium leader for IPP3

project. The initial phases of the process, that is, information exchange with NEPCO and

various technological comparisons by various consultants are overviewed. The main steps in

establishing relations and coming to an agreement with the developer, KEPCO/Mitsubishi,

are considered. An overview of the environmental impact assessment and the consequent

adoption of new emissions regulation in Jordan is provided. Finally, challenges of managing a

large-scale project in Jordan are covered.

1 Deputy Managing Director for Operation & Planning, National Electric Power Company, Jordan2 Business Development Manager, Wärtsilä Corporation Power Plants, UAE. Corresponding author.3 Director, Business Development, Wärtsilä Corporation Power Plants, Finland

Building the world’s largest reciprocating engine power plant. Al Azzam, A.M.; Koul, U. and Paldanius, R.


IPP3 is a ground-breaking project for Jordan, supplying not only base load, but also load

following and grid stability reserves for the Jordan power system. The IPP3 power plant will

be world’s largest tri-fuel power plant in the world, providing Jordan with much needed fuel

and operational flexibility.

2. Introduction

Jordan has experienced decades of robust electric demand growth due to an expanding

population of 6.41 million people and an electrification rate of 100 percent. Although located

in a fossil fuel-rich region of the world, Jordan lacks significant indigenous energy resources

and relies on imports to provide more than 97 percent of the country’s energy needs. The

electricity sector accounts for 42% of the energy resources consumed. Historically Jordan has

depended heavily on natural gas for electric power generation. In 2009, 89 percent of the

electricity produced was from natural gas. Natural gas is supplied from a single source – the

Arab Gas Pipeline which runs from Egypt to Jordan and other neighbouring countries. The

reliance on a single source of fuel for the bulk of electric power posed significant energy

security concerns for the National Electric Power Company (NEPCO) of Jordan. NEPCO is

the state-owned transmission system operator and is responsible for planning, constructing,

and maintaining the country’s power system. NEPCO purchases electricity from power

generation companies and from neighbouring countries Egypt and Syria via electrical

interconnection lines (single buyer) and sells the power to distribution companies and large

industries.

In 2010, NEPCO conducted studies to forecast demand growth and analyse projected reserve

margins through 2040. The analyses identified key vulnerabilities, actionable timelines, and

assessed technology and fuel options to meet the country’s growing electric power

requirements. These studies identified the need for 600 megawatts (MW) of new generating

capacity to avoid shortfalls in supply and reserve margin deficits projected to occur by 2015.

A significant conclusion of NEPCO’s analysis was that the new capacity needed to have

operational flexibility to meet fluctuations in electrical demand. NEPCO’s issuance of a

tender for the construction of a third independent power producer project in Jordan – the IPP3

project – was pioneering for a number of reasons: scale, technology selection and

environmental standards. This paper discusses the technological, energy security and



economic factors that led to the construction of the world’s largest tri-fuel reciprocating

engine power plant.

3. Background on Jordan’s Power System

Annual peak electric load in Jordan has risen by an average of 9 percent from 1980 through

2010. The peak load in 2012 was 2770 MW, serving 1.65 million electricity customers. The

consumer sector consumed 43 percent of the electricity generated while the industrial sector

accounted for 24 percent of consumption. Electric power demand varies by as much as 30

percent daily, presenting operational and planning challenges for the transmission system

operator, NEPCO. Electric demand has been met primarily with steam turbine and combined

cycle gas turbine (CCGT) capacity. The current and historical profile of the generating fleet is

shown in Table 1. The heavy reliance on plants that are designed to run at high load factors

provides limited ability to adapt to daily fluctuations in demand. This is reflected in an overall

average thermal efficiency of the generating fleet of 40.2 percent in 2012.

Table 1: Installed electric generating capacity in Jordan (MW)

Year Steam Diesel-

fired

GT

Gas-

fired

GT

CCGT Diesel Wind Hydro Biogas TOTAL

2006 1010 156.5 189.4 585 54.3 1.44 12 3.5 2012

2007 1010 156.5 289.4 585 54.3 1.44 12 3.5 2112

2008 1010 156.5 677.4 585 54.3 1.44 12 3.5 2500

2009 1010 156.5 389.4 965 54.3 1.44 12 3.5 2592

2010 1010 156.5 600.4 1317 46.8 1.44 12 3.5 3148

2011 1010 141.5 499.4 1737 46.8 1.44 12 3.5 3452

2012 1010 141.5 499.4 1737 46.8 1.44 12 3.5 3452

Prior to 2011, the bulk of electric generation in Jordan had been from natural gas. In 2009

natural-gas fired generation accounted for 12,986 gigawatt hours (GWh) or 89 percent of total

electric generation as shown in Figure 1. Then in 2011 a major disruption to Jordan’s single

source natural gas supply, the Arab Gas Pipeline, intensified energy security concerns.

Natural gas imports to Jordan were reduced from 89 billion cubic feet (Bcf) in 2010 to 29 Bcf



in 2011. To compensate for the natural gas shortages, Jordan’s fuel oil imports increased by

more than 25 percent. Diesel and heavy fuel oil (HFO) accounted for 64 percent of total

electric generation in 2011 and 78 percent in 2012, as shown in Figure 1. This abrupt shift

from natural gas to fuel oil and diesel also affected the efficient and economic dispatch of

Jordan’s generating units. As a result, the cost of energy relative to Jordan’s gross domestic

product (GDP) increased from 11.5 percent in 2009 to 21.3 percent in 2012.

Figure 1: Energy generated by fuel type in Jordan, 2009-2013

NEPCO hired a consultant to evaluate the power system needs, K&M Engineering and

Consulting, evaluated peak load supply and reserve margins with existing capacity alone,

extensions to planned retirements, and capacity additions. With the currently installed

capacity, a supply deficit of 306 MW was projected for 2013. By 2015, 910 MW of new

capacity would be needed to meet demand and avoid reserve margin deficits as high as 25

percent. The electricity demand forecast and the expected shortfalls without new builds are

shown in Figure 2. The feasibility of getting 300 MW of new capacity online by 2013

presented significant challenges. However, by extending the retirement dates of some existing

units, NEPCO could meet peak load and maintain positive reserve margins in 2013. Even

with those extensions, the system would still experience supply deficits of 283 MW in 2014

and 529 MW in 2015. NEPCO identified that a third IPP tender, with a commercial operation

date by 2014, should be issued to prevent these capacity shortfalls.

89

69

2517

35

7

24

32

29

27

1 3

3249

34

3 411

5 4

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009 2010 2011 2012 2013 (jan-may)

Imported electricity

Diesel

HFO

Natural gas

Building the world’s largest reciprocating engine power plant.

Power-Gen Middle East 2014

Figure 2: Peak electricity demand forecast and deficits, 2011

4. Power System Modelling and Optimization

Severe dependency on unreliable natural gas

flexibility in NEPCO’s power generating portfolio prompted Wärtsilä to undertake a power

system optimization study in 2009. While the Jordan electric power system was a combined

cycle dominated market, Wärtsilä rec

was not fully optimized for efficiency and generation cost, for example CCGT plants were

being used as spinning reserve. Fluctuations in plant load factor increases production costs

due to loss of fuel efficiency and higher maintenance costs associated with CCGT plant

cycling. Wärtsilä undertook a study of the Jordan power system to identify the how the

existing generating fleet operations could be optimized with the addition of highly flexible

generating sources. Flexible generating sources can provide, for example, quick

capability for variable loads, without sacrificing efficiency.

Model results showed that existing baseload capacity was sufficient, but Jordan needed

operational flexibility to meet peak demand. An analysis of the load profile revealed that one

third of the daily load was flexible, with the remaining two

Wärtsilä demonstrated that the overall system efficiency would dramatically increase,

reducing fuel costs, by converting open cycle GTs to combined cycle, enabling CCGTs to

operate at high plant load factors and using efficient and flexible generating resources to meet

fluctuations in demand. These types of generating resources we call Smart Power Genera


: Peak electricity demand forecast and deficits, 2011-2040

Power System Modelling and Optimization

Severe dependency on unreliable natural gas supply from Egypt and lack of needed fuel


system optimization study in 2009. While the Jordan electric power system was a combined

cycle dominated market, Wärtsilä recognized that the use of CCGTs to meet flexible demand



efficiency and higher maintenance costs associated with CCGT plant



g sources. Flexible generating sources can provide, for example, quick

capability for variable loads, without sacrificing efficiency.


eet peak demand. An analysis of the load profile revealed that one

third of the daily load was flexible, with the remaining two-thirds load being baseload.


costs, by converting open cycle GTs to combined cycle, enabling CCGTs to


fluctuations in demand. These types of generating resources we call Smart Power Genera

Azzam, A.M.; Koul, U. and Paldanius, R.

5

supply from Egypt and lack of needed fuel


system optimization study in 2009. While the Jordan electric power system was a combined-

ognized that the use of CCGTs to meet flexible demand



efficiency and higher maintenance costs associated with CCGT plant



g sources. Flexible generating sources can provide, for example, quick-start


eet peak demand. An analysis of the load profile revealed that one-

thirds load being baseload.


costs, by converting open cycle GTs to combined cycle, enabling CCGTs to


fluctuations in demand. These types of generating resources we call Smart Power Generation.



Smart Power Generation is the combination of energy efficiency, operational flexibility, and

fuel flexibility. This type of generation provides stability to a power system with rapid starts,

stops and quick ramp up or down capacities while retaining high efficiency at partial loads.

The optimized daily load cycle estimated for 2014 is shown in Figure 3 and Figure 4 for high

demand and minimum demand periods, respectively. Major variations in demand are

absorbed by a Smart Power Generation IPP (in purple), allowing CCGTs (in green) to run at a

stable load with higher efficiency. The estimated IPP plant load factor for the high demand

period would be approximately 57 percent. During low demand periods, steam plants would

remain in stand-by mode and flexible power run at about 50 percent load factor. Wärtsilä

presented the results to NEPCO and introduced the concept of reciprocating engine

technology which can serve as Smart Power Generation.

Figure 4: Optimized daily load cycle – High demand period

Figure 4: Optimized daily load cycle – Minimum demand period



In addition to this, there is a glaring need for the Jordanian power system to become ready for

the upcoming development plans and accommodate the growing shares of renewable energy

that are scheduled to become available in the near future. Jordan is planning to undertake

major investments in renewable energy, capitalising on their privileged geography by

harnessing the power of the abundant solar irradiation and strong winds in certain regions.

In the Master Strategy of the Energy Sector in Jordan for the 2007-2020 period, the Jordanian

government set a target to obtain 1800 MW, an amount equivalent to 10 per cent of the

country’s energy generation base, from renewable sources by 2020. Of this, about 1200 MW

will come from wind energy, 600 MW from solar power, and between 30 and 50 MW from

waste-to-energy facilities, according to the mentioned Master Strategy.

This requires the Jordanian power system to incorporate a sizeable amount of flexible

generation capacity that can quickly respond and come online in a matter of minutes when the

renewable sources falter. For that reason, the operational flexibility dimension of the

technology assessment, which will now be presented in the next chapter, becomes of

paramount importance.

5. Technology Assessment

To evaluate fuel selection, operational modes, and generating technologies that would provide

the best solution, NEPCO tasked K&M Engineering and Consulting to conduct a project

technology assessment for IPP3. The assessment examined fuel types, expected dispatch

strategy and capacity factors, and technology options and plant configurations. The

technologies considered were combustion turbines in simple and combined cycle,

reciprocating engines, and oil-fired boiler power plants. Technologies were evaluated for fuel

use, efficiency, availability, emissions, longevity, water consumption, risks, capital costs,

fixed and variable O&M costs, and estimated time for construction. Table 2 presents a

summary of the technology evaluation.

The assessment considered natural gas, heavy fuel oil, crude oil, and light distillate oil as

viable energy sources for IPP3 and examined the projected availability and costs of each fuel

type. Due to anticipated shortages in natural gas supply, heavy fuel oil-fired capacity

represented the most economically viable short-term alternative for a new IPP. However,



NEPCO also began the process of securing liquefied natural gas (LNG) and regasification

infrastructure for future energy needs. The ability of a new IPP to utilize either fuel oil or

natural gas depending on changing supply conditions would provide much needed flexibility

for the power system. K&M strongly recommended against using HFO in combustion

turbines because of increased maintenance requirements, resulting probably lower availability

and reliability numbers.

Table 2: Summary of IPP3 Technology Evaluation

Technology Fuel

Cycling

/peaking

mode Efficiency Availability

Environmental

characteristics

Water

consumption

Medium-speed

reciprocating

engines

Gas or

1%

sulphur

HFO

Well

suited44% 95%

Meets

requirements

burning gas or

low-sulphur

HFO

Low

Conventional

HFO-fired

boiler

Gas,

low- and

high-

sulphur

HFO

Not well

suited35-35% >90%

Can meet

requirements

with FGD

system

Moderate,

but requires

very large dry-

cooled

condenser

Combined

Cycle Gas

Turbine

Gas,

light

distillate

Not well

suited55% 92-94%

Clean on natural

gas, needs water

injection on oil

Moderate

with dry

cooled

condenser

K&M analysed load duration curves for 2012 – 2019 and the capacity utilization that IPP3

would be expected to have each year. During the maximum load day in 2015, 1200 MW of

capacity would need to be started during peak load hours and shut down or unloaded when

demand is at lowest levels. The analysis concluded that the most economical operation of

existing plants would be to operate combined cycle plants as baseload and use IPP3 for

cycling. The load factor for IPP3 was expected to range from 38 to 69 percent, with capacity

utilization under 50 percent for several years. Further, the assessment identified that the

selected technology and capacity of individual IPP3 units should be sized so that the outage of



one unit would not compromise transmission system stability. NEPCO’s analysis confirmed

the operational and efficiency benefits of Smart Power Generation in providing tri-fuel

flexibility and suitability for cycling operations.

NEPCO then conducted a tariff study to compare the cost of reciprocating engine plant

following Smart Power Generation principles to CCGT plants and boiler plants under various

dispatch and fuel conditions. The financial methodology enabled the technology evaluation to

take into consideration heat rate and the impact of fuel costs over a period of 25 years. Using

natural gas, CCGTs posed the lowest cost for load capacity, whereas supercritical boiler

plants provided the lowest cost for HFO-fired baseload capacity.

However, the Smart Power Generation option, represented by medium-speed reciprocating

engines, presented the lowest cost for meeting the flexible demand, and enabled existing

CCGTs to operate at high load factors with higher efficiency. Comparing tariffs for flexible

load, which included part load operation impacts, starting costs, substitution costs, and

transmission line losses, Smart Power Generation provided the lowest cost with both natural

gas and liquid fuels. Based on the studies conducted by K&M, the RFP for IPP3 was issued

with tri-fuel reciprocating engine technology fulfilling all the aspects of Smart Power

Generation.

It is because of the special characteristics of modern medium-speed reciprocating engines that

they are such a good fit for the needs of IPP3. First of all, the fact that a reciprocating engine

plant is made of several units of close to 20MW each ensures that even if one unit suffers an

unexpected outage or needs maintenance, the practical totality of the plant power is still

available. Adding to that, the reliability of each individual unit is the highest of all the

analysed alternatives – a winning combination. As an added benefit, the engines perform

especially well in load cycles. They are able to start up, run just enough time to cover the

demand peak and shut down immediately after, with no impact on maintenance. Since they

can be started and stopped individually, the magnitude of the peak does not impact the plant

efficiency either: only the needed number of engines are started to deal with the load peak,

keeping the plant efficiency at its maximum.



On top of the previously discussed factors, the specific conditions affecting IPP3 made the

project even more challenging: the hot and dry ambient conditions, plus the strict limitation of

water usage, posed a major challenge to all of the three possible technologies. However,

according to the evaluation, reciprocating engines are the technology that can best deal with

these conditions. Contrary to that of other technologies, engines only suffer minimal derating

in the desert climate, and their water consumption is negligible in comparison with that of gas

turbines or HFO-fired boilers. This is a key point in the case of IPP3, because as one may

guess, a cooling system that uses large amounts of water would pose a great risk to the mid-

and long-term success of the project. This could even potentially impact the energy

independence of the country, forcing the mothballing of a key generation asset in times of

drought.

The ability of reciprocating engines to start up in a matter of minutes, faster than any other

thermal technology, makes them especially suitable for supporting grids with increasing

shares of renewable sources. Since the output from solar and wind power is highly

intermittent and can vary heavily in a matter of minutes, it is necessary to have power

reserves in place that can kick in when renewable power output decreases, in order to

guarantee the stability of the whole national power system. A lack of flexible balancing

capacity could seriously jeopardize the bet for renewable power that Jordan has made, but

thanks to the careful planning and technological evaluation, the country will be able to fully

utilize its renewable potential without endangering the power system stability, hence setting a

valuable precedent for other countries to develop in a similar fashion.

6. Environmental Regulation

The increasing reliance on diesel and heavy fuel oil for electric power generation in Jordan

spurred environmental concerns. Prior to engagement with the project developers, Jordan’s

existing environmental regulations were based on combined cycle gas turbine and boiler

technology, and emissions standards were not technology-specific. The prospective project

developers informed NEPCO prior to issuance of the IPP3 tender that the existing

environmental standards were not applicable for tri-fuel reciprocating engines, which had

high efficiency and low emission rates. The updated World Bank/IFC Environmental Health

and Safety (EHS) Guidelines (2008) reflected the latest industry technologies and emissions

control for different categories of thermal power station prime movers. After a comprehensive



environmental impact assessment conducted in 2012, Jordan adopted the IFC Guidelines.

NEPCO’s analysis further demonstrated that a 600 MW tri-fuel reciprocating engine power

plant, while burning HFO, produced 35 percent less carbon emissions than an existing steam

electric plant using HFO because of the high engine efficiency performance.

7. Project Collaboration and Innovation

The IPP3 project represents a unique level of international cooperation toward providing a

turnkey engineering, procurement, and construction (EPC) solution to fulfil the needs of

Jordan’s power system. The scope and schedule of the project presented numerous challenges.

To meet the tender offer, Wärtsilä of Finland teamed with the Korea Electric Power Company

of South Korea (KEPCO) and Mitsubishi Corporation of Japan to form a new entity, Amman

Asia Electric Power (AAEPCO) that would supply electricity to NEPCO. The development

team members KEPCO and Mitsubishi brought impressive track records of successfully

completing a number of power projects worldwide and access to competitive project

financing, while Wärtsilä provided the reciprocating engine technology expertise. The EPC

consortium is led by Wärtsilä with South Korea-based Lotte Engineering and Construction as

EPC consortium partner.

Figure 5: IPP3 in a computer-generated image (l) and in construction (r)

NEPCO awarded the IPP3 project to the KEPCO-led consortium in January 2012. IPP3 will

have 38 high efficiency Wärtsilä 50DF engines capable of running on HFO, light fuel oil



(LFO), or natural gas. In the event of a fuel supply interruption, the engines have the ability to

switch fuels while operating without load reduction

To help NEPCO meet immediate peak load needs, the first 16 engines of IPP3 came online in

February 2014, with 14 more engines planned to begin operation in the upcoming July. The

full IPP3 plant is expected to be in service by September 2014. This represents an incredibly

short development schedule. IPP3, nominally rated as 600 MW, can produce 632 MW under

ISO conditions and a firm and consistent 573 MW under extreme Jordanian ambient

conditions. The expected running regime is 60 percent for base load, and 40 percent for

flexible operation. The plant is planned to run on HFO with LFO backup through 2015, then

switching over to natural gas as NEPCO completes gas infrastructure projects. NEPCO has

entered into a 25-year purchase power agreement with AAEPCO.

Managing such a large project in an EPC Consortium posed significant challenges for the

developers, EPC Consortium members and the various advisors. A proactive collaboration

between the EPC Consortium members prior to submission of bid helped in overcoming the

cultural differences and different ways of working. The EPC Consortium members were

committed to completing the project in accordance with NEPCO’s requirements and tight

timeline. Close cooperation between KEPCO, Mitsubishi, Wärtsilä Development & Financial

Services (WDFS), and the EPC Consortium members paved the way for winning the project

and successful implementation of the largest tri-generation reciprocating engine power plant

in the world.

8. Conclusion

Collaboration early on in the tender process was essential for identifying the lowest cost

technology that would provide Jordan with much needed fuel and operational flexibility and

led to the inclusion of reciprocating engine technology in the tender. This was the first time

that NEPCO had ever issued a tender for a reciprocating engine power plant. The IPP3 power

plant will ensure that Jordan has flexible generating capacity that can provide baseload, load-

following, and peaking power to meet projected increasing demand, thus preserving essential

reserve margins. The tri-fuel capability of the IPP3 reciprocating engines enables the power

plant to instantaneously adapt to interruptions in fuel supply while maintaining load, ensuring



a reliable and efficient source of electricity. Power system analysis showing the value from

optimizing generating resources was essential to identifying the need for Smart Power

Generation. Environmental concerns were addressed using a collaborative and informative

approach, allowing Jordan to adopt 2008 IFC EHS Guidelines which represent best industry

performance. IPP3 will be the world’s largest reciprocating engine power plant, as well as

provide a model for Smart Power Generation, providing operational flexibility, fuel flexibility

and high energy efficiency for the electric power system.



9. References

EIA (2013), International Energy Statistics. “Jordan.” U.S. Energy Information

Administration, March 2013.

International Finance Corporation (2008), Environmental, Health, and Safety Guidelines for

Thermal Power Plants. World Bank Group, 18 December 2008.

K&M Engineering and Consulting (2011), “Development of the IPP3 Power Project In

Jordan.” K&M Engineering and Consulting LLC, Washington D.C.

K&M Engineering & Consulting (2010), “Project Technology Assessment Report prepared

for the National Electric Power Corporation of Jordan.” K&M Engineering and Consulting

LLC, Washington D.C., January 2010.

Ma’abreh, G. (2013), “Jordan’s Power System: Present and Future Development.” National

Electric Power Company of Jordan, 2013.

NEPCO (2012), “Electricity Generation in Jordan.” National Electric Power Company of

Jordan, 2012.

Wärtsilä Power Plants (2013), “Smart Power Generation, Optimizing system efficiency.”

Wärtsilä, 25 June 2013.

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