Morocco's ambitious goals set to increase renewable energy generation

Pressured by rising electricity demand and the associated energy import bill, Morocco has been channelling sector investment into the improvement of its energy generation capacity. With a focus on renewable energy and efficiency of electricity production, the kingdom has been adding installed capacity over recent years. Adequate and reliable electricity production is a necessary driver for Morocco’s long-term development. The population has increased from 31.6m to 35.7m over the past decade, according to figures from the World Bank. In addition, GDP has risen sharply since the early 2000s, expanding from $38.9bn to $109.7bn in 2017.

This growth has been led by a diversification of the economy and, although the agriculture sector still accounts for an important part of output and employment, Morocco’s efforts to drive its manufacturing sector, which accounted for 17.9% of GDP in 2016, are a key factor behind rising electricity consumption, underlining the need to further secure generation infrastructure. The government is aiming to post higher growth rates over a sustained period of time to ensure employment creation, but this can only be achieved through reliable electricity generation capacity that eases the burden of heavy energy imports on the kingdom’s budget.

“The energy mix in Morocco will be impacted by two elements: the evolution of demand and political strategies. A clear legal framework around energy efficiency and self-sufficiency could be a game changer for several industrial ecosystems,” Adil Lahlou, general manager at EDF Maroc, told OBG.

Generation Force

Various investments are set to shake up Morocco’s energy mix. The process accelerated in 2009 when the government began the implementation of its strategy to incorporate renewable energy into its production capacity. By 2020 coal-fuelled generation will account for 26%, oil 14% and natural gas 11% of the country’s mix. Alongside this, renewable sources such as hydro, solar and wind are each expected to represent 14% of the national energy basket, with another 7% to be accounted for by other sources. While this is the outcome of the past decade’s efforts, investments in new thermal and non-thermal generation is set to be strengthened over the next 10 years. The Moroccan government plans to channel $40bn into energy until 2030, most of which is to go towards renewable energy generation capacity.

Thermal

At the end of 2018, the country’s electricity capacity stood at 11 GW, an 18% increase on 2017 figures. Thermal energy accounts for roughly 64% of the kingdom’s electricity generation capacity, the majority of which is made up of either coal or natural gas, although some diesel-fuelled power plants have also helped the kingdom to cover energy needs. The biggest thermal power plant, at Jorf Lasfar – near El Jadida, about 130 km south of Casablanca – has been a key force in the power sector and remains the largest electricity supplier to the National Office for Electricity and Water (Office National de l’Electricité et de l’Eau Potable, ONEE), Morocco’s main utility, in charge of the production, transmission and distribution of electricity across the kingdom. First commissioned in 2001, the thermal power station has since completed several extension projects and currently boasts six units with a total combined capacity of 2056 MW. Run by Taqa Morocco, a subsidiary of Abu Dhabi National Energy Company, the plant requires 5.4m tonnes annual coal imports, supplied through the nearby port of Jorf Lasfar.

The country’s installed capacity has also been significantly expanded by the 2018 completion of the 1386-MW Safi thermal power plant. Budgeted at $2.6bn and built by South Korean contractor Daewoo Engineering & Construction, the new power plant will be run by Safi Energy Company. Smaller production units help secure electricity production across the country in Kenitra, Mohammedia, Tangier and Al Wahda. ONEE also recently completed extension work at the Dakhla diesel-powered plant, with an additional generation unit, at 16.5-MW capacity, added in 2018. The power plant already had three, 7-MW diesel-fuelled units and a fourth with a 16. 5-MW generation capacity. Another significant addition in terms of thermal power production could be brought by a project in Nador, on the country’s Mediterranean coast. This 1320-MW power station will be coal-fuelled, and the total cost of the two-unit plant is expected to reach Dh23bn (€2bn).

In addition, four combined-cycle gas-powered electricity production units are scheduled to be built under the government’s gas-to-power plan, which aims to increase the use of natural gas as feedstock for thermal power production, and will involve the building of a liquefied natural gas port in Jorf Lasfar. The project’s total budget is expected to reach $4.6bn. Two of the new power plants will be built in Jorf Lasfar and two others in Kenitra, with a combined capacity of 2400 MW.

Beyond Thermal

Under the current energy plan, the total weight of thermal energy generation within the country’s mix is set to be reduced to roughly 54.9% by 2025. This will help to rein in energy imports, but generation commitments are also being driven by the need to scale clean sources, which are expected to account for 42% of the kingdom’s production by as soon as 2020. This will require the continuing commissioning of wind, hydro and solar production projects in the near future.

A big step came with the commissioning of the country’s first major solar power project in 2012. The 160-MW Noor concentrated solar power (CSP) unit was completed in 2016 and executed by Saudi-based ACWA Power. The unit represents the first phase of a solar power plant project in Ouarzazate that will have a capacity of 580 MW of electricity. Phases II and III of the Noor project are already under construction and are expected to add an extra 350 MW of capacity to the solar complex. “CSP solar technology, unlike photovoltaic (PV), is able to store energy and feed the grid at peak times. It is a clear asset in the renewable segment, where energy storage is the number-one challenge,” Badis Derradji, regional managing director at ACWA Power, told OBG.

ACWA is also part of the consortium that is to build 160 MW of PV solar energy under the Noor I PV plant, which will be made up of three different solar generation installations in Ouarzazate, La â youne and Boujdour. Another key solar project, the Noor Midelt solar generation plant, is set to have up to 800 MW of capacity when completed. The project is made up of two 400-MW capacity hybrid plants, one of which uses CSP and the other PV technology. Construction of the complex is due to begin in 2019.

Wind generation capacity has also been receiving considerable attention. Enel Green Power, the renewables branch of Italian firm Enel, has partnered with Germany’s Siemens and Morocco’s Nareva to establish 850 MW in combined wind generation capacity over five different sites, a project involving a total investment of $1.1bn. This new generation capacity is expected to be operational by 2020.

The first project to advance under the partnership is the construction of a 180-MW wind farm in Midelt, for which the consortium announced it had reached financial close in early November 2018. The wind unit will require an investment of €230m, according to international media reports. In addition to Midelt, the project will establish wind farms in Tangier, Tiskrad, Boujdour and Jbel Lahdid. Installed wind generation in the kingdom is expected to rise to 2000 MW by 2020, up from 600 MW in 2016. As well as the development of new production capacity, the authorities have embarked on a revamp of the country’s first wind park, built in 2000 by a consortium formed by EDF, Paribas and Germa in Koudia El Baida, in order to raise its generation capacity from 50 MW to 120 MW, and apply newer technology to the site.

Hydropower

Morocco has been investing in hydropower generation since the 1960s, and the segment accounted for 1770 MW as of mid-2017, or about 19.5% of total installed capacity. Over a quarter of current hydro-capacity is provided by the hydropower stations of Afourer, which has 460 MW of installed generation capacity. More hydropower is in the pipeline. The Abdelmoumen pumped storage unit, set to have 350 MW of generation capacity, is currently under construction and is expected to begin operating in 2020. ONEE is also working on as much as 600 MW of pumped-storage hydro-generation capacity at El Mendez II and Ifahsa.

By investing in different modes of power generation, Morocco is reducing production and import costs, while at the same time leveraging its natural resources to improve efficiency. The country’s current energy strategy will doubtless have a profound impact on its development for many years to come.