Morocco, being a large energy importer, is making concerted efforts to reduce its reliance on imported fossil fuels. Renewable energy is an attractive proposition as Morocco has almost complete dependence on imported energy carriers. Morocco’s 2009 National Energy Strategy set out an ambition for 42 per cent of the total installed power capacity to come from renewable energy in 2020. This was expected to require the commissioning of new plants to bring the total capacity to 2,000 MW of solar, 2,000 MW of wind and 2,000 MW of hydro by 2020. In 2015, during the 21st session of the UNFCCC’s Conference of the Parties (COP21), Morocco announced a further planned increase in the renewables capacity to reach 52 per cent of the total by 2030 (20 per cent solar, 20 per cent wind, 12 per cent hydro). Driven by strong policy push, Morocco’s renewable energy capacity reached 3,685 MW by the end of 2019, including 700 MW of solar energy, 1,215 MW of wind power, and 1,770 MW of hydroelectricity. Of these, solar power is emerging as a big area of opportunity for investors and project developers. Renewable Watch recently released its “Solar Power in Africa” report, wherein it listed Morocco among the most promising upcoming solar power markets in Africa.  A look at the key highlights from the report, focused specifically on the trends and emerging opportunities in the North African nation.

Power Sector Overview

Morocco has a liberal economy and is a major player in African economic affairs. It has a diverse economy which is driven by agriculture, fishing, tourism, manufacturing and finance. The country’s GDP saw a fall after 2008 and is yet to pick up. Morocco is the only north-African country without natural oil resources and is highly dependent on fuel imports for its energy needs (96 per cent) and is looking at renewable energy as an alternative. In 2018, it generated about 32,498 GWh of electricity and renewables (excluding hydro) accounted for a 11 per cent share in electricity generation in the country.

Source: African Statistical Yearbook 2019, IEA, Economic Commission for Africa, World Bank

Growth of Solar Power Capacity

Morocco has high solar energy potential owing to its geographical location. It is one of the sunniest countries in the world which makes it ideal for developing solar PV and CSP projects on a large scale. The country saw a rapid increase in its solar power capacity (160 MW) between 2014 and 2015. The country had an installed capacity of 202 MW in 2016. However, there was no significant increase in solar capacity between 2015 and 2016. The solar capacity has spiked after 2017 after some solar PV and CSP projects were commissioned. Most of the projects installed are solar thermal owing to the high DNI and land availability.

Source: Renewable Watch

The Moroccan Government has many attractive financial incentives along with an enabling policy and regulatory scenario. This conducive business environment has led to a massive increase in foreign investments, as well as foreign developers and technicians. The country has secured international funding from World bank, KfW, etc for kick-starting its energy renaissance.

Capacity and Demand Outlook

Morocco’s power sector is primarily dependent on fossil fuels, generating almost 80 per cent of the total energy. The country’s energy demand is increasing each year, and current levels of fuel imports may not be sufficient to cater to the entire country in the future. With rising global awareness on climate change, renewable energy and the risk of fuel shortages in the future, Morocco is slowly realising its huge potential of renewable energy development.

The present share of renewable power in Morocco’s energy mix is at 11 per cent. This is significant compared to the other African countries. The current installed solar capacity is 735 MW but over 2,000 MW of solar projects are being planned. The figure below highlights the key upcoming solar projects in Morocco.

Source: Renewable Watch

For achieving the solar power targets till 2020, solar PV capacity will have to increase at a CAGR of 65 per cent. To achieve the Morocco government’s target of 2,000 MW of solar power capacity till 2020, the total investment required for solar PV is estimated to be about $4,281 million.

Regulatory and Market Barriers

Lack of feed-in tariffs: A feed-in-tariff or a simplified tender process could be considered to accelerate power development in Morocco. The existing tender process is a long and costly for bidders which sometimes end with no project allocation.

Statutory framework and institutional infrastructure: Historically weakness in both areas has impeded the development of renewable energy sources and the enhancement of energy efficiency. However, as can be seen from this briefing great strides have been made with, for example, the establishment of dedicated agencies such as MASEN and ADEREE and the passing of The Renewable Energy Law 13-09.

Geopolitical tensions: Many traditional and renewable energy projects– exist within the Western Sahara, an area annexed by Rabat in 1975 and disputed ever since. This is a major concern for the investors and even the project developers.

Less scope for offgrid solar: The rate of electrification in Morocco is 99 per cent. With such a high rate of electrification, the scope for the uptake of offgrid solar applications becomes limited. And the uptake of rooftop solar applications makes commercial sense only when the solar rooftop tariffs are competitive with the grid tariffs