Morocco’s bold play at renewing their energy blend

As the winds of change blow through the MENA region, Morocco is pushing to harvest the energy of the sun and the wind. At a time when Western attempts at making renewable energy a success are only producing negative headlines (example here & here) Morocco is playing the hand it was dealt.

As the only country in North Africa that does not have oil resources, Morocco must import 95% of its energy. In 2009, Morocco spent $7.3 billion on fuel and electricity imports, and the demand is set to quadruple by 2030. This has left Morocco with a strong set of incentives to aggressively expand its renewable energy capacity, and the government set an ambitious goal of 42% of energy to come from renewable sources by 2020. That’s more than double the commitment made by the more traditional climate-friendly European countries.

Financing this initiative has been a concern since Morocco was counting on its northern neighbors in the EU to invest. However, with the European countries stuck in a persistent financial crisis, Morocco has had to look elsewhere for the help needed to kick start this process.

Fortunately help has come from an unexpected source – at least in the world of renewable energy. One of the world’s top oil producers, Saudi-Arabia has not only invested in Moroccan energy but is also hoping to introduce renewable energy domestically, and thus be able to benefit on their own by introducing solar power to the countries energy supply and export more of their oil reserves.

Achieving Saudia Arabia’s economical goal rests on three assumptions: that technology improvements will cut costs, that a domestic solar industry will emerge and create jobs for a booming population, and that billions of dollars worth of exportable oil will be saved.

The African Development bank (AfDB) has also pitched in, just last week it approved a loan for 800 million USD towards Morocco’s continued quest to scale up renewable energy. This recent loan is in addition to the 168 million euros loaned to finance a specific concentrated solar plant (CSP) in Ouarzazate that will be built by a Saudi company. Loans have also been given to wind/hydro projects worth 359 million euros expected to be finished in 2017.

Morocco is blessed with all the physical attributes that makes it particularly promising for CSP scale-up: abundant sunshine, low precipitation, and plenty of unused flat land close to road networks and transmission grids.  The combination of these resources makes Morocco and the MENA region one of the places where the economies of scale that are necessary for global deployment of CSP can be achieved at the lowest cost.

Europe – financial crisis or not – is still going to need energy and Northern Africa has the potential to be a large exporter region, with its high solar resource largely compensating for the additional cost of long transmission lines needed to provide Europe with the solar power. The current lines already support a capacity of up to 1.4 GW, with plans to add additional capacity.

Morocco’s wind and solar initiatives are concrete examples of green growth opportunities in Africa that should benefit both the local population, the climate, and neighboring countries.

While the potential profit of this project is real, so are the high capital costs of CSP and wind technologies. At these prices conventional supercritical coal-fired power plants are still competitive and less risky. But as The International Energy Agency emphasizes “it is only through technology learning as a result of marketplace deployment that these costs are reduced and the product adapted to the market”.

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