Degree of reliance on imported energy:
Morocco is the only North African country with no natural oil resources and is the largest energy importer in the region. In 2011, the country imported 95.6% of its energy demand, equal to MAD85 billion (about US$10.3 billion), up from MAD19.1 billion (roughly US$2.3 billion) in 2002. Petroleum imports account for 20% of total imports and 50% of the current trade deficit. The leading supplier of Morocco’s energy requirements is Saudi Arabia at 48%.
Morocco has had to import increasing amounts of electricity from Spain through two 400kV subsea cables that span the 26-kilometre Strait of Gibraltar. Imports in 2012 were close to 5,000 GWh compared with 1,000 GWh in 2005.
Main sources of Energy:
Energy consumption has risen at an average annual rate of 5.7% from 2002 to 2011. However, per capita energy consumption, at 0.52 tonnes oil equivalent (Toe) in 2011, is less than one third the world average (1.7% Toe). Morocco’s focus on energy-intensive sectors (chemicals, construction, etc.), on building infrastructure, on tourism and industry will increase its long-term energy needs.
Morocco consumed 17,262 kToe of energy in 2011, with petroleum products accounting for 61.9%. Coal is second (22.5%), followed by electricity trade (7.2%), natural gas (4.6%) and RES, namely hydropower (3.0%) and wind power (1.0%).
Morocco’s installed electricity generation capacity stood at 6,677 MW in 2012, with coal-fired generation being the largest segment at 1,785 MW, followed by hydroelectric at 1,770 MW.
Country:
Extent of the network:
As a result of the government's ‘Programme d'électrification Rurale Globale’– (PERG, Global Rural Electrification Programme), launched in 1995, the rural electrification level rose from 18% in 1995 to 96% in 2008.
In 2006, the transmission grid was owned by the state utility ONE and consisted of 18,920 km of 400 kV, 225 kV, 150 kV and 60 kV lines. It covers the entire country and is connected to the Algerian and Spanish power grids via regional links.
Capacity concerns:
Rising oil prices and a rapidly growing population mean that the cost of importing energy is now seriously aggravating the country’s trade deficit. Energy imports accounted for over a quarter of total imports in 2012, when the trade deficit grew 8% to a record $23.6 billion.
Potential for Renewable Energy:
In terms of its current installed base, the kingdom is already a regional leader, with 32% of its installed capacity derived from renewables, mostly hydropower.
Wind
Morocco has also a high potential for wind power, both onshore and offshore wind are high in terms of intensity and constancy. Wind is highly abundant in nearly all the coastal regions. Wind potential could be of 25,000 MW. According to Moroccan Ministry of Energy the total wind power installed capacity of the country is expected to be more than 2,000 MW in 2020
Solar
Moroccan solar resources are significant. With an extremely favourable irradiation
(>2300 kWh/m²/y), which is 30% higher than the best sites in Europe, investing in solar projects in Morocco is an interesting lever for investors.
The US$9bn Solar Plan calls for the development of 2,000 MW by 2020, with 10,000 hectares of solar installations to be spread over five sites (Ouarzazate, Ain Beni Mathar, Foum El Oued, Boujdour, Sebkhat Tah). These projects are to be based on two major technological variants: Concentrated Solar Power and Photovoltaic technologies.
In 2009, MASEN launched the development of the 500 MW Ouarzazate plant. This
ambitious project is being developed in two phases based on two technological variants. The first phase of the Ouarzazate project entails the construction of a CSP solar thermal plant with a 160 MW capacity, which should result in a reduction of 240,000 tons of CO2 equivalent emissions per year. This first phase will use parabolic trough mirror technology, while the next phase implements the CSP tower technology. Work on the first phase of the Ouarzazate facility is scheduled to finish in 2016.
On 24 September 2012, Morocco awarded to the consortium led by the Saudi company ACWA Power International the US$1bn contract to build the Ouarzazate 160 MW solar power plant. The Saudi-led consortium includes Spanish firms Aries and TSK.
On 23 January 2013, Masen launched request for qualification process to select
potential sponsors to develop the next CSP phase of the Ouarzazate solar power
complex through IPP project. The CSP next program is divided into two separate projects: a CSP tower project with a contemplated capacity of around 100 MW and a CSP parabolic trough project with a contemplated capacity of around 200 MW.
Biomass
The predominant use of biomass in Morocco is traditional fuels for cooking and heating. Forested areas are estimated at 9 million hectares, although annual consumption is estimated to be 30,000 hectares. An additional 400 MW of co-generation potential is available in the country. Total solid bioenergy potential is estimated at 12,568 GWh/year, with a further 13,055 GWh/year from biogas and biofuels.
Geothermal
Significant geothermal potential exists in the north-east, in the form of hot springs, with potential for further utilisation for space heating. There is no current utilisation of the resource in the country.
Hydropower
In 2008, 1,360 GWh were produced from hydro power. ONE operates 26 hydro power stations with a total installed capacity of 1,360 MW. In addition, hydro power comes partly from a 464 MW pumped storage power plant in Afourer, near Beni Mellal. In Oued Oum Er Rbia, a micro hydro power station shall be developed in the future.
Potential for Energy Efficiency:
Optimisation of Energy Use in Buildings
The projects currently in the pipeline deal with the optimisation of energy use in buildings, including reducing consumption through demand-side management measures, and more efficient lighting practices. Other initiatives cover:
- Training for technical staff;
- Equipment monitoring;
- Communication and awareness improvement schemes.
Efficient use of wood
This program aims to improve the energy efficiency of traditional heating systems, and has two components: an urban component based mainly in Casablanca and other cities, and a rural component targeting certain provinces for firewood consumption profiles. The dissemination of improved biomass stoves is an important factor in this program.
Industry
- Energy use and carbon emission auditing, with financial support from the ADEREE.
- Capacity-building measures to improve EE knowledge.
Utilities
- Promotion of private-sector collaboration for EE improvements, as well as cogeneration and DSM-measure promotion.
- RE development: 1000MW wind capacity, including seawater desalination (2008-2012).
- ADEERE programmes: 2000MW solar energy, 2000MW wind and 2000MW hydro by 2020.
Transport
- World Bank-funded projects to improve urban transport efficiency, through better governance and increased infrastructure energy performance.
Residential
- National energy efficiency program in the construction sector, under the UNDP.
- Appliance labelling for EE, under the Renewable Energy and Energy Efficiency Law 2009.
- Low Consumption Light programme in the public housing sector.
Public
- Framework law and support funds for energy efficiency programs.
- Creation of the ADEREE, to act as an implementing agency for EE projects.
- EE projects in hospitals, ministries and public administration.
Ownership:
ONEE/Electrical Branch is the public producer by an electric generation system including several power plants (coal, oil, natural gas, hydraulic and wind). Furthermore, since September 1997, some private producers participate in the national electric generation by supplying the power exclusively to Office National de l'Electricité et de l'Eau Potable (ONEE) through Power Purchase Agreements (PPA). The main private suppliers are Jorf Lasfar Electric Company JLEC (coal power plant with 6 units of 350 MW capacity each), Energie Electrique de Tahadart (400 MW NGCC power plant) and Compagnie Eolienne du Detroit (wind park). Other IPP projects are under construction or development.
Structure / extent of competition:
Over the past twenty years, Morocco has introduced a number of significant reforms aimed at opening up the electricity market to new players. A system of production under concession for power production above 10 MW was introduced in 1994, and distribution was handed over to the private sector in 1997.
However, it was in 2009 that the regulatory framework really progressed by opening up to the private sector with the adoption of Law N° 13-09. The production of electricity from green energy has since been opened to private enterprise, with free production under 20 kW, upon simple declaration for production under 2 MWh and subject to authorisation (obtained within 3 months) for power production between 2 and 20 MWh. Legislation is even more favourable for thermal electricity, which can be produced upon submission of a simple declaration for up to 8 MWh. Marketing activities, both in the national and international market, are equally encouraged: the incentive framework (EnergiePro) managed by the ONEE authorises the transportation of privately produced energy via its network, enabling operators to supply both households and private companies.
Morocco’s power sector has experienced transformational changes during the last 20 years, evolving from a vertically integrated public monopoly to a current hybrid single buyer model characterized by the strong involvement of the private sector in power generation, and distribution management.
Existence of an energy framework and programmes to promote sustainable energy:
To reach its renewable energy goals, Morocco has started to introduce a modern legal and regulatory framework for the energy sector. In early 2010, relevant legislation and regulations were defined. Among these, the following laws should be noted:
- The Renewable Energy Law (13.09 of February 11, 2010) aims at fostering and promoting renewable energy and regulates the commercialization and exportation of renewable energy. Furthermore, it outlines a procedure for the authorization of renewable energy installations.
- The law for the creation of the National Agency for the Promotion of Renewable Energy and Energy Conservation (ADEREE) (16.09 of January 13, 2010) defined the reorganization and renaming of the existing Centre for the Development of Renewable Energy (CDER).
- The law for the creation of the Moroccan Agency for Solar Energy (MASEN) (57.09 of January 14, 2010), which is the prime contractor for solar power projects..
To meet growing electricity demand, Morocco plans to invest more than $20 billion in the next 10 years to increase the installed capacity by about 6,750 MW (installed capacity was 6,100 MW at the end of 2009).5 The program envisions a radical increase in renewables, so that by 2020, wind, solar and hydro would each account for 14% of power supply, with the remaining sources oil (14%), gas (11%), nuclear (7%), and coal (26%). The $10 billion solar program is based on construction of a 500 MW CSP plant by 2015 and another 2,000 MW of CSP during 2015-2020.
This ambitious plan is in line with the new energy strategy that was declared in March 2009 and aims at: (i) diversifying the energy mix around reliable and competitive energy technologies, in order to reduce the share of oil to 40% by 2030; (ii) developing the national renewable energy potential, with the objectives of increasing the contribution of renewable to 10-15% of primary energy demand by 2012; (iii) making energy efficiency improvements a national priority; (iv) developing indigenous energy resources by intensifying hydrocarbon exploration activities and developing conventional and non-conventional oil sources; and (v) integrating into the regional energy market, through enhanced cooperation and trade with both other Maghreb countries and the EU countries.
The Moroccan Integrated Solar Energy Project & the Wind Energy Programme
The Moroccan government launched two major RE projects in 2009 and 2010: the Moroccan Integrated Solar Energy Project and the Integrated Wind Project.
The Moroccan Integrated Solar Project aims at achieving an installed capacity of 2,000 MW by 2019 on five sites, and annual production of 4,500 GWh (18% of current national production). The investment costs for the project amounts to US$9 billion, however the project would lead to savings of 1 million Toe and 3.7 million tonnes of CO2 emissions per year. The first solar plant, the Ouarzazate CSP plant, is planned to be in service in 2015. In 2013, MASEN announced the group selected to implement the first phase with an initial capacity of 500 MW. Photovoltaic modules and CSP towers are to be used in later stages. The complex will be among the largest CSP plants in the world. The group is led by the Saudi International Company for Water and Power (Acwa), with 95% ownership. The value of the contract is $1 billion. Financing will be found through loans from the World Bank, the African Development Bank, The European Investment bank, the EU, The German KfW bank, and other. In January 2013, bids were invited for the second phase, consisting of two CSP plants with total capacity of 300 MW.
The Wind Energy Programme aims at installing a capacity of 2,000 MW with annual production of 6,600 GWH (26% of current national production) by 2020. Five sites have been identified. The first wind farm will be operational in 2014. Investment costs are estimated at US$3.5 billion. This project is expected to produce annual savings of 1.5 Toe and 5.6 million tonnes of CO2. Already, 100 MW is completed (286 MW) or being developed (714 MW).
The EnergiPro Project
EnergiPro was launched by ONE and pursuant to which large industrial consumers are offered an incentive in the form of favourable tariffs to invest in renewables.
EnergiPro was launched in 2006 to promote independent production of electricity from renewable sources, and offers two key benefits:
- transmission of electricity produced from renewable energy throughout the grid network at fixed rate
- guaranteed repurchase by the ONE of any surplus electricity produced with a twenty per cent bonus on top of ONE peak, and off-peak day ahead tariffs
Several major firms have entered into “Energie Pro” agreements. Whilst, EnergiePro is not limited to wind energy, the program is primarily directed at this source.
Current energy debates or legislation:
Morocco has announced plans to invest nearly $11 billion in solar and wind energy projects, aimed at turning the country into an exporter of alternative energy by 2020. Energy exports will contribute to improving the trade balance and increasing Rabat’s hard currency resources, thus boosting development.
Major energy studies:
Mediterranean Solar Plan (MSP)
As a member of the Union for the Mediterranean (UfM), Morocco is part of the Mediterranean Solar Plan (MSP) a flagship initiative of jointly developed by the Member States and the main stakeholders in the region. The role of the MSP is to serve as a common strategic policy framework identifying and creating adequate politico-institutional, socio-economic, and infrastructural conditions for a rapid, cost-effective, and lasting roll-out of Renewable Energy and Energy Efficiency in the Mediterranean region. One of the main priorities of the MSP is the creation of green jobs and the necessary tools for the identification, labelling and promotion of specific pilot projects.
Desertec Concept
The research institute for renewable sources of Morocco (CDER), Algeria made significant contributions towards the development of the DESERTEC Concept.
Role of government:
Ministry of Energy, Mines, Water and Environment (MEMEE)
Regulation of the energy sector in Morocco is the responsibility of the MEMEE. The MEMEE is in charge of developing and implementing government policy in the areas of energy, mines and geology. It also supervises companies and public institutions that come under its jurisdiction. The Ministry has three main departments: the Mining Development department, the Fuels and Energy department and the Electricity and Renewable Energies department.
In Morocco, Environmental Affairs are under the responsibility of the Ministry of MEMEE. In October 2013, a junior ministerial portfolio has been created for Environmental Affairs. From an operational point of view, particularly in terms of environmental control and stewardship, local level capacity is being strengthened through the creation of sixteen Regional Observatories (Observatoires Regionaux de l’Environnement et le Developpement Durable – OREDD) and the creation of a corps of Ministry of Environment officers in charge of monitoring and control, which effectively amounts to the institution of an environmental police. The launch of the Regional Observatories aims at decentralizing the Environment Ministry’s structure at regional and provincial level, and ensuring the participation of the NGO sector and local governments in monitoring and control activities.
Government agencies in sustainable energy:
Agency for the Development of Renewable Energies and Energy Efficiency (ADEREE)
ADEREE is the main organisation responsible for the development of energy management policies. Among others, the tasks of ADEREE comprise the development of national, regional and sectoral plans for renewable energy and energy efficiency, the realization and coordination of renewable energy and energy efficiency programmes and projects as well as the provision of advice to the authorities for site selection and the formulation of legislation. Its goal is also to promote the adoption of the nation's energy strategy at regional level, and provide a contact point for investors
Moroccan Solar Agency (MASEN)
The implementation of the Moroccan Solar Plan is almost exclusively the responsibility of MASEN, a state-owned limited company whose mission is to contribute to the development of the national solar industry. Activities of the agency include the conception of solar power projects, their promotion towards domestic and foreign investors, as well as the development of technical and economic feasibility studies
Association énergies renouvelables développement durable et solidarités
AERDDS has a great experience in implementing pilot and demonstration projects. In addition, the organization has matured an outstanding experience in organizing workshops, debates and panel discussions and in engaging many stakeholders’ towards achieving tangible results on sustainable development and deployment of renewable energy technologies at micro and small scales. The association is able to mobilize funds from national and international donors for its programs and able in investing this funds towards creating added value and real benefits for communities, mainly for schools and students. The association has partnerships with local communes, Ministry of Energy and Environment, private companies and international organizations.
Energy planning procedures:
The contractual scheme of recent energy projects generally follows the following
“classical” project finance structure:
- the Project Company is in charge of developing, owning, operating and maintaining
- the facility, its shareholders are private sponsors but in recent transactions, ONEE or MASEN sometimes take (or have an option to take) a minority stake;
- the EPC contractor enters into a construction agreement with the Project Company; and the operator is in charge of operating the asset.
The financing scheme of recent energy transactions includes both commercial banks (international and Moroccan) and concessional funds (from the Clean Technology Fund (CTF) and the World Bank Group (through the International Bank for Reconstruction and Development (IBRD)).
The current global financial turmoil has increased the appetite for concessional funds
granted by International Financial Institutions (IFIs) and Export Credit Agencies (ECAs), such as the Agence Française de Développement (AFD), European Investment Bank (EIB), the World Bank, Japan Bank for International Cooperation (JBIC), Nippon Export and Investment Insurance (NEXI) and the Korean bank KEXIM, as well as an increasing recourse to Moroccan liquidities, with Moroccan Attijariwafa Bank and Banque Centrale Populaire taking the lead.
On the Jorf Lasfar extension IPP, the financing comprises ECA tranches (JBIC and KEXIM), covered (NEXI and KEXIM) and uncovered tranches with international lenders (BNP Paribas, Société Générale, Standard Chartered) and Moroccan lenders (Banque Centrale Populaire, Banque Marocaine pour le Commerce et l’Industrie, Société Générale Marocaine des Banques). In the wind farm sector, some projects have been financed solely by Moroccan banks. In contrast, in the Ouarzazate solar IPP, the financing comprised an allocation from the World Bank’s Trust Fund and a grant from the European Neighbourhood Investment Facility of the European Commission, as well as additional loans from several IFIs, such as the ADB, the AFD, the EIB and the German KfW.
In addition, the contractual structure mandated by MASEN is quite different from that of other IPPs in Morocco, since MASEN is entering into a power purchase agreement
(PPA) with ONEE (based on ONEE’s high voltage tariff) and a second PPA with the
Project Company (based on the project’s full cost of CSP generation). Thus, MASEN will buy high-cost CSP production and will sell it to ONEE at a price equivalent to the
currently lower coal generation cost; the gap ultimately being covered by the Moroccan Government which, pursuant to the MASEN law, undertakes to guarantee the financial sustainability of the Solar Plan, on a project-by-project basis.
Until recently, Moroccan energy projects were financed under a Build, Transfer, Operate (BTO) scheme. Under such a scheme, and due to the Project site being part of the public domain of the State, the Project Company was only granted a usufruct right (droit de jouissance) over such land rather than a legal entitlement (droit réel). As a result, a mortgage in favour of lenders could not be granted. This is due to the fact that the public domain is inalienable and not, as a matter of principle, transferable to another entity for an unlimited period.
To increase the bankability of these transactions, another project finance scheme has
been adopted in recent Moroccan energy projects. Following a Build, Own, Operate and Transfer (BOOT) scheme, the Moroccan State reclassifies the relevant areas from the public domain of the State to the State private domain and then transfers full ownership of them (droit de superficie) to a private entity by way of a reclassification (déclassement) procedure.
Energy regulator Date of creation:
For the past ten years, Morocco has worked on the introduction of an independent energy regulator, but past attempts have been unsuccessful mainly due to the complexity of restructuring distribution activities. The Government has recently announced its intention to create an independent regulator (Agence Nationale de Régulation de l’Energie - ANRE) and has started the process to design its functions, missions and organization.
Degree of independence:
N/A
Regulatory framework for sustainable energy:
The legal framework for the generation, transportation and distribution of electricity is
primarily governed by:
- Dahir n° 1-63-226 dated 5 August 1963 (as amended), which created the Office National de l’Electricité (ONE) and established the basis for private sector participation in energy production projects (Independent Power Producer projects or IPPs);
- Dahir n° 1-11-160 dated 29 September 2011, which promulgated law no. 40-09 creating the Office National de l’Eau et de l’Eau Potable (ONEE), which replaces the ONE.
- Electricity tariffs are determined by a decree of the Minister of Economic Affairs.
Law n° 54-05 on delegated management (Loi sur la Gestion Déléguée) of services
and public works promulgated in February 2006 This law allows the State or local authorities to concede the management of a public service to a private entity. The main sectors in which delegated management were made are electricity, water, irrigation and urban transport.
Law n° 13-09 promulgated on 11 February 2010 relating to renewable energy
This law liberalises the renewable energy sector. It introduces major innovations, including the opening to competition of renewable electricity production and the ability to export electricity from renewable sources, by using the national grid (subject to the payment to the State of an annual fee). It also sets an authorisation/declaration system, depending on the capacity of the facility as follows:
- a declaration if an electricity generating facility capacity is between 20kW and 2 MW;
- an authorisation if an electricity generating facility capacity is equal to or higher than 2 MW; and
- in respect of facilities that produce thermal energy, there is only a declaration if the capacity is equal to or higher than 8 MW.
Law n° 57-09 creating the Moroccan Agency for Solar Energy (MASEN) setting out a
specific framework for solar projects. This law sets MASEN specific targets regarding the implementation of the Solar Plan. MASEN ensures the management of the projects and remains liable for all the decisions which have been taken relating to the project.
Law n° 47-09 relating to energy efficiency dated 29 September 2011
This law lays the foundations of future thermal regulation by capitalising on French and German experiences. It aims to increase the efficiency of energy resource consumption, to reduce energy costs on the national economy and to contribute to sustainable development. It also encourages the use of solar water heaters and energy-saving light bulbs.
Draft law on Public-Private Partnerships (PPPs)
King Mohammed VI recently insisted on “the need to develop contractual and public-private mechanisms in order to maximise the investments”, including in infrastructure and new technologies sectors.
In early August 2012, a draft law on PPPs was published. This draft is strongly inspired by the French Ordinance of 17 June 2004 on PPPs, but also follows the approach used by the UK Private Finance Initiative experience. By way of example, the draft duplicates the concept of “availability-based payments”, whereby remuneration of the private entity depends on the availability of an asset or the performance of a service
Regulatory roles:
N/A
Role of government department in energy regulation:
There is currently no independent regulator and MEMEE assumes the role of regulator through its Electricity Directorate.
References:
Cirlig, Carmen Cristina (2013): Solar Energy Development in Morocco Available at http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130515/LDM_BRI%282013%29130515_REV1_EN.pdf Accessed 13th February
The World Bank (2013): Program document for a proposed loan in the amount of euro 219.7 million (us$300 million equivalent) to the kingdom of morocco for the first inclusive green growth development policy loan. Available at http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/11/28/000333037_20131128095013/Rendered/PDF/823040PGD0P1279560R2013-0213-10Box379877B0(OUO-9).pdf Accessed 14th February
Norton Rose Fullbright (2012): Renewable Energy in Morocco. Available at http://www.nortonrosefulbright.com/knowledge/publications/66419/renewable-energy-in-morocco Accessed 14th February
www.meedinsight.com (2013): Mena Renewable Energy Report 2013 Available at http://webcache.googleusercontent.com/search?q=cache:OKgVWXCY6MQJ:www.meed.com/Journals/2013/04/21/v/s/c/Sample-Content.pdf+&cd=3&hl=es-419&ct=clnk&gl=uk Accessed 14th February
EuroMed@Change 2013: Focus on Energy in Morocco Available at //www.animaweb.org/uploads/E [at] C_Morocco_Energy_FINAL_EN-web.pdf">http://www.animaweb.org/uploads/E [at] C_Morocco_Energy_FINAL_EN-web.pdf Accessed 14th February
AFDB (2012): Unlocking North Africa’s Potential through Regional Integration: Challenges and Opportunities Available at http://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Unlocking%20North%20Africa%20RI%20ENG%20FINAL.pdf#page=26 Accessed 17th February
Al-Monitor website (2014): Morocco to invest $11 Billion in Clean Energy Available at http://www.al-monitor.com/pulse/business/2014/02/morocco-investments-solar-wind-energy.html# Accessed 13th February
germanwatch.org (2014): MAPPING OFKEY CIVILSOCIETYORGANIZATIONSIN THEMIDDLE EAST AND NORTH AFRICATOJOIN A CIVIL SOCIETY NETWORK ON RENEWABLE ENERGY, LOW CARBON DEVELOPMENT AND CLIMATE PROTECTION. Available at https://germanwatch.org/de/download/8889.pdf Accessed 14th February
Union for the Mediterranean website: Energy Available at http://ufmsecretariat.org/energy/ Accesses 5th March
Desertec Foundation website: From Vision to Reality Available at http://www.desertec.org/global-mission/milestones/ Accessed 5th March
Linklaters.com (2013): Lighting up the Kingdom of Morocco Available athttp://www.linklaters.com/pdfs/mkt/paris/6143_Paris_Office_Morocco_Energy_Newsletter_ENGLISH_FINAL.pdf Accessed 5th March
