Article d’Ilyas Mourjane (EnvIM 2020)

 

 

Morocco’s pathway towards renewable energies

Morocco lights the way in Africa

Over the past-half century, Morocco has been experiencing a continuous economic growth and demographic progression that have involved a growing energy demand. Yet, Morocco has never been seen as a country with large conventional energy resources. Indeed, it has been used to depend heavily on energy importations to satisfy its own needs. This same energy, based mainly on fossil fuels, has a non-negligible impact on climate change and Morocco is among the countries that are more likely to be threatened by climatic changes in the coming years.

In what can be seen as a response to it, Morocco, at the instigation of the Royal Palace, has been developing an ambitious domestic energy transition pathway to 2030, based on the mobilization of the country’s own national resources (particularly solar and wind resources) and that supports its transition to renewable energies with the rise of renewables in the energy mix and the introduction of energy efficiency as a “national priority”. With an impressive track record in solar technologies, Morocco is currently leading the deployment of renewable energy in North Africa.

 

The energy situation in Morocco

 

Due to its economic and demographic growth as well as the increase in per capita consumption, energy consumption in Morocco has risen at an average annual rate of 6,5% from 2002 to 2015 ^[1]. The country has also worked on improving its electricity rate with a 99,5% electricity rate in 2015 compared to the level of 18% in 1995 ^[1]. In addition, the demand for primary energy has increased by 55% between 2002 to 2015 ^[1].

Regarding energy consumption, the first thing which is worth noticing regarding Morocco is the place of petroleum products and coal in the total energy consumption (more than 82%) ^[3]. Another relevant thing to notice is its dependence on external fossil fuels supply. The country is the largest energy importer in North Africa with approximatively 94.5% of its energy sources imported in 2015 ^[1]. The primary energy supply is shared mainly between petroleum products (41%), coal and peat (17%) and gas (4%) ^[1].

When talking about the total amount of electricity produced in the country, renewable energies accounted approximatively for 14% in 2015 and 15% in 2017 ^[3]. While this share is in progression, the one of renewables in total final consumption has decreased. Moroccan new targets regarding renewable energies will encompass only electricity.

Regarding energy-related CO2 emissions, according to the IEA, a 181% increase can be seen since 1990. On a smaller time-scale (2006-16 decade) the total energy-related CO2 emissions increased by over a third to 55.3 MtCO₂ ^[4]. In 2016, oil and coal are responsible for respectively 64% and 31% of total emissions ^[4]. The increase in CO2 emissions can be explained by the socio-economic development that Morocco has experienced in recent decades, its demographic growth, and the increase in energy consumption in the productive sectors. In 2016, power generation (39%) and transports (31%) account for most of energy-related CO2 emissions in the country.

 

Policies and frameworks – Morocco’s commitment in renewables

In the wake of a gradual political liberalization, Morocco’s government has given priority to both economic and social development which has been translated through different sets of reforms leading to a better macroeconomic stability and low inflation ^[5]. The country has also been committed to contribute to the fight against climate change both through international efforts and national actions. Morocco has ratified the UNFCCC in 1995, the Kyoto Protocol in 2002, is one of the 75 founding members of the IREN (International Renewable Energy Agency) and has stepped up its role by ratifying the Paris Agreement and hosting the COP22 in 2016. The country has also been involved domestically through national climate policies (creation of the National Committee on Climate Change in 1996 and the National Plan of Action against Climate Change in 2009) ^[6].

But since the early 2000’s, the Moroccan government started to develop a framework in order to prioritize the development of renewables on all its territory and to reinforce its energy independence. This framework led the Moroccan Ministry of Energy, Mines and Environment (MEM) to unveil a National Energy Strategy ^[7]. Adopted in 2009, this strategy had ambitious targets of reaching 43% installed renewable capacity by 2020 and during COP21 in 2015, this strategy was renewed with a new 52% target for 2030 (20% solar, 20% wind, 12% hydro).

 

Structure & institutions regarding renewables

Still, these targets are very ambitious especially in Africa where access to energy is a big issue and makes Morocco the first African country aiming to reach more than 50% electricity generation from renewable energies. In regard to the country’s potential in wind and solar resources as well as its position in the Euro-Mediterranean energy hub, these goals seem reachable. To that end, Morocco developed an approach initially structured around the establishment of an appropriate legal and institutional framework in accordance which its international commitments (deployment of a National Environmental Action Plan; adoption of a Framework Law 99-12 on the National Charter for the Environment and sustainable development in 2014; definition of article 31 of the Constitution stating that “all citizens have the right to access to a healthy environment as well as to lasting development”).

Institutional reforms have also been accelerated at the beginning of the 2010’s following social movements linked to the “Arab Spring” demanding political as well as socio-economic reforms. One example of this can be seen with the creation, in 2011 of the Economic, Social and Environmental Council, an independent institution which give its opinion on the general orientations of the national economy and sustainable development.

These legal and institutional foundations helped enhancing Morocco’s environmental policy which was inadequate and not favorable to the coordination and arbitration of public policies. The Framework Law on the Environment and Sustainable Development was a step forward in developing institutional mechanisms and better defining institutional structures.

The main Ministry responsible of the legal framework of Morocco’s power sector is the MEM (Ministry of Energy, Mines, and Sustainable Development). This Ministry is also in charge of the governance of institutions related to renewables. Several of these institutions have been reformed and or developed recently by royal decree. They have specific tasks, composition and resources and engage different stakeholders. By the establishment of these public agencies, the Government has demonstrated its commitment to better organize and structure the promotion of renewables. Most of these agencies are orbiting around the ONEE (National Office of Electricity and Water), a State-owned national entity in charge of production and distribution of electricity.

Name	Foundation	Functions
MASEN (Moroccan Agency for Sustainable Energy)	2011	Limited company with public funding, supervise the development of project producing solar electricity
AMEE (Moroccan Agency for Efficiency)	2016	Develop and promote energy-management policies (realization of national and regional plans for renewable energy and energy efficiency)
EIS (Energy Investment Corporation)	2010	Public investment company created to help and develop small and medium renewable energies projects (facilitate diversification of energy resources and promote renewable energy and energy efficiency)
IRESEN (Research Institute for Solar and New Energy)	2009	Support the implementation of R&D projects  (promote R&D, conducts and finance specific projects and strengthen the knowledge of renewables)

Table 1: Morocco’s main energy entities ^[8]

Most of these institutions depend or are supported directly by the “Makhzen” (i.e. the Royal Palace) which shows that the level of centralization regarding solar energy in Morocco is still very high. This centralization of power and therefore decision-making within the Royal Palace facilitates the development of large top-down solar projects. The Royal Palace is therefore likely to approve major legislative change regarding solar projects only if its interests are not affected which can potentially lead to delays in the development of new PV applications (i.e. rooftop solar applications market).

 

What is the place of solar energy in all of it?

Why solar energy

Committed to develop renewable forms of energy generation to complement and limit the environmental impacts of the existing systems, Morocco has quite naturally turned towards solar energy. This energy is well-suited to its strategy for several reasons. Morocco is a country that is characterized by an intensive solar radiation as well as a key geographical location. It possesses abundant solar resources with an intensive solar radiation potential estimated by MASEN to almost 2600 kWh/m²/year under annual sunshine durations (3000 hours in average) ^[5]. Moreover, Morocco owns a strategic position in the Mediterranean energy hub connecting with the Spanish network through two electric lines and also with Algeria.

This solar potential combined with the advantages that a large-scale implementation of solar PV can bring (security of supply, generalized access to electricity, climate change commitment…) encouraged the development of specific reforms in favor of solar energy. The MEM is also working on additional policy instruments such as incentives both on the supply side and the demand sides. These developments are however still under the constraint of access to finance.

 

NOOR, a large scale solar project

Part of Morocco’s energy strategy, the Solar Energy Project (also known as Noor, a reference to نور, « light » in Arabic), implemented by the MASEN, has been launched in 2009 with the aim to achieve an installed capacity of 2000 MW of electricity production by 2020 with the development of large-scale CSP (Concentrated Solar Power) and PV (Photovoltaic) facilities in five sites with an annual production estimated to 4500 GWh (18% of current national production) ^[5]. Investment costs could amount US$9 with potentially 3,7 million TOE of CO₂ saved per year ^[5].

As mentioned, two main technologies are used in those projects. Photovoltaic technology involves the direct conversion of solar energy to electricity with the generation of electricity by absorbing sunlight and using it to create an electrical current. Concentrated Solar Power technology use concentrated sun irradiation. Large mirrors are deployed to concentrate sunlight into a receiver containing a working fluid which will be heated to a high temperature. This fluid can then be used through a heat exchanger for instance to generate electricity.

 

Noor Ouarzazate, Morocco’s ambition flagship.

What can be seen as the most ambitious project that has been developed is located in Ouarzazate. The Noor Ouarzazate Solar Complex is the largest multi-technological solar production site in the world. It is a 580 MW power plant located 10km north-east of the city of Ouarzazate. The complex is constituted of four power stations (Noor I, II, III, IV) and covers approximatively 3000 hectares.  Noor I and II are 160 and 200 MW CSP plants with cylindrical-parabolic sensors that can hold the energy for use when demand is greater (at night for example) while Noor III is a 150 MW CSP plant with tower. Noor IV is a PV plant of 72 MW. Commissioned from 2016 to 2018, the projects were developed and are maintained by a consortium composed of private companies led by the Saudi ACWA power, the German TSK and the MASEN ^[9].

The Noor II and Noor III plants have a molten salt storage capacity of seven hours each, while Noor I has a molten salt storage capacity of three hours. Noor I uses a wet cooling system, while other plants use a dry cooling system. The water required for the plants will be sourced from the Mansour Eddabhi dam located approximately 12km from the project site and stored in water storage reservoirs with a total capacity of 300,000 m³ (site power generation) ^[11].

The total water consumption of Noor I was estimated in 2016 at around 1,802,614 m³ of water ^[12], which is a considerable amount. Located in the desert, with low levels of precipitations, these plants could therefore need important amount of water for cooling and cleaning operations. Even though the total amount of water used by the complex amounts to of the dam’s supply ^[13], this issues seems critical especially regarding the location of agricultural lands further south which which are already facing water scarcity.

New solar plants with dry cooling system (such as Noor II and III for instance) could be seen as a technically and economically competitive alternative while reducing water consumption ^[14].

According to the MASEN, on the one hand, Noor I CSP plant can offset around 240,000t of CO₂ emissions a year and has contributed to approximately 1,000 jobs during the construction and operation phase. On the other hand, Noor II and III can offset 533,000t of CO₂ emissions a year and have mobilized more than 5000 workers ^[11].

 

What is next?

Morocco’s goal, through its MASEN agency, is to produce a minimum total capacity of 2,000 MW on the year 2020 horizon which will make up for over 14% of the Kingdom’s total mix electricity production. Projects in Ouarzazate, Laayoune or Boujdour have been successfully launched and account for 680 MW. Several other projects were led and others are currently being developed all around the country (Noor Atlas, Noor Tafilalt…) in order to strengthen the network in other regions.

One large-scale project currently under development and that is focusing attention is located in Eastern Morocco, in the region of Midelt. Called Noor Midelt, it is a mega-project that aims to become the world’s largest multi-technology solar complex with a total cumulative power of 1600 MW once its development phases completed (predicted in 2030 by the MASEN). The first phase of the project combines the use of a 300 MW PV plant ant a 500 MW CSP plant, it will provide dispatchable solar energy during the day and until five hours after sunset ^[15]. This project is also expected to prevent annually the emission of at least 572,000 tons of CO₂ ^[16].

What makes Noor Midelt different from the project achieved in Ouarzazate is the fact that the complex will not be predominantly CSP, it will combine more PV and CSP technologies with a thermal heat storage to improve its performance and optimize the price per kWh (tariff at peak hours at a record-low 0,6 dirhams per kWh according to EDF Renewables) ^[17]. Green of Africa and EDF Renewables were awarded the tender for the design, financing, construction and operation of the first phase of the project.

Project	Technology	Capacity (MW)	Start of  building	Start of operation
Ouarzazate 1	CSP	160	2013	2016
Ouarzazate 2	CSP	200	2015	2018
Ouarzazate 3	CSP	150	2015	2018
Ouarzazate 4	PV	72	2017	2019
Midelt 1	CSP + PV	800	2019	2022
Laayoune	PV	80	2017	2019
Boujdour	PV	20	2017	2019
Predicted total electricity generation : 1482 MW

Table 3: Overview of the main projects undertaken (MASEN, 2020)

 

How about the financing?

All this projects require huge investments (the total amount of the National Solar Plan is estimated at almost US$9 billion and the first phase of Noor Midelt will involve alone 2 billion €). To achieve its ambitions, the Moroccan government has opted for an innovative financial mechanism based on public-private partnerships (PPP) CO₂ ^[8].

This mechanism allows financial arrangements which can combine both domestic and foreign public funds with private contributions. Part of those investments are supported by international funding which indicates the level of interest in Morocco’s renewables sector, another part is covered by State subsidies whose amounts are yet to be publicly available. In these PPP funding structures, MASEN, responsible for the implementation of the projects and owned by the State, ONEE, EIS and the Hassan II fund for economic and social development (a public investment fund), plays a critical part: The agency is indeed responsible for mobilizing resources and allocating risks to key players as well as building power stations.

In the case of the NOOR Ouarzazate project ^[11], the financial package was mainly supported and developed with the help of the African Development Bank (AFDB) and the World Bank (WB). Various international investors are joining the funding such as the Clean Technology Fund for climate investments (CTF), the German Development Aid Agency (KfW), the French Development Agency (AFD), the EU and private investors and companies. The funds loaned to the MASEN by its financial partners are retroceded to the companies in charge of the projects. These companies are generally owned by a private consortium (selected following a tendering process) and the MASEN with a respectively, 75/25 % ratio ^[16]. The MASEN is the sole purchaser of the electricity produced by the plants.

Regarding the Noor Midelt project, the total investment needed is estimated at more than 3,7 billion € ^[15]. According to the MASEN, the funding will come from five international investors up to 1,6 billion €, supported by the Clean Technology Fund ^[18]. Here is a breakdown of the financial arrangement:

Investor	Funding (M€)
German Development Aid Agency (KfW)	761
European Investment Bank (EIB)	375
African Development Bank (AFDB)	237
French Development Agency (AFD)	161
World Bank (WB)	112

Table 4: Financial arrangement of the Noor Midelt 1 project ^[15]

The solar projects in Morocco were fitting well in the AFDB project called “New Deal on Energy for Africa” ^[19] which aims at transforming the energy sector on the continent and achieve universal electricity access by 2025, providing 160 GW of new capacity with a strong focus on encouraging clean and renewable energy solutions (AFDB). Another international support mentioned before helped developed the NOOR program: The Climate Investment Funds, through its Clean Technology Fund stimulated and supported NOOR CSP complexes development. The involvement of the CIF, as a funder, allowed the establishment of an interesting investment framework for the government and the private sector by reducing the risks perceived by the private sector investors and designers.

The financial mechanisms used in Morocco show that the development of solar projects still depends highly on the Government and on major international funds rather than from local private investors and regional banks. This does not enable private consumers to install renewable technologies (for now) since most of funding is intended to large-scale projects.

 

Perspectives

How sustainable are these projects? Critical analysis

Morocco have chosen to facilitate the development of renewable energies in its country. In regards to its energy and economic situation, this shift can offer advantages in terms of energy security (supply and availability, control of demand…) and can diminish the reliance on energy imports (diversification of energy sources, price competitiveness) with more possibilities to spend money within the national economy. Nevertheless, solar energy, as an intermittent renewable energy, raise new technical constraints, that have to be taken into consideration.

The country is currently working on improving the regulatory framework for the implementation, by the private sector, of new projects while ensuring the security and viability of the national electricity grid. Moreover, as mentioned in its global strategy, the development of renewables needs and is expected to go along with new energy efficiency measures to reshape the Moroccan energy sector with the aim to save 15% of total energy consumption by 2030 ^[4]. Morocco’s next phase of solar development must therefore begin to develop new projects adapted to the logic of sober consumption.

The Kingdom has managed to build a favorable environment with clear commitments to attract solar power providers. However, this promising strategy comes also with uncertainties regarding the execution of reform plans at the state level. So far, Morocco has prioritized the development of large-scale projects and has succeeded in attracting large investments. Nevertheless, the latest plans and projects are mainly top-down developments driven by powerful actors. There is still a lack of accessible financial support dedicated to small-scale projects and private consumers wishing to switch to solar energy ^[1]. The development of small-scale projects with an increasing role of private and local actors can be a way to empower citizens, to develop the logic of sober consumption and to be less dependent on large infrastructures that are not very flexible in the medium term.

Morocco’s next phase of solar development must also come with additional informational input on energy utilization and environmental impacts of its project specifically dedicated to the public. The use of water in some areas already facing water scarcity must be done with transparency and accurate monitoring in order to avoid conflict of interest between solar complexes and local livelihoods that only depend on erratic rainfall with rising temperatures. Issues regarding maintenance and recycling on the different complexes are not clearly detailed and should be developed and made available.

Energy security and environment protection are important aspects of a sustainable development in North-Africa but positive impacts on the socio-economic development of the population are also crucial. In this domain, Morocco’s strategy can impact positively the job creation and develop new-income-generating economic activities. Specific solar projects should also open up access to isolated areas and slowdown the rural exodus by improving the quality of life of the people.  Finally, it is essential for the country to continually develop its R&D programs to develop local high-quality job creation and prepare the next-generation users and consumers of renewable energy technologies.

 

 

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References

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