Friday, July 21

IEA Review of Morocco’s Energy Policies Highlights Country’s Progress Towards Energy Transition

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Eurasia Review

Wind farm

Morocco’s energy strategy is very much on target, with notable advances in wind and solar power and on fuel subsidy reform, the International Energy Agency (IEA) says in its in-depth review of Morocco’s energy policies. The new report notes that while the country’s power sector restructuring is under way, there is scope for further progress in energy efficiency.

“Under political guidance from the highest level, Morocco has shown an admirable determination to play to its strengths, and in our view the National Energy Strategy set out in 2009 has taken Morocco very much in the right direction,” said IEA Executive Director Maria van der Hoeven as she presented the report today to a large audience of Ministers, senior officials and diplomatic representatives in Rabat.

In the last 20 years, Morocco has taken giant strides in extending energy access to nearly all of its population and opening up the power sector and the oil products market to international investors. The upstream investment conditions are attractive, too. Morocco is also well-integrated into the regional gas and power networks, buying gas from Algeria and electricity from Spain.

Economic growth has been strong, but energy demand has also grown fast. Morocco is 90 % energy-dependent: high international energy prices have hit the balance of payments, and fuel subsidies have placed a strain on the budget. However, in addition to substantial hydropower capacity, Morocco has impressive potential in both wind and solar power.

The country’s 2009 Energy Strategy aimed to diversify the electricity fuel mix, accelerate the deployment of wind and solar power, place renewed emphasis on energy efficiency, encourage foreign investment in the upstream and pursue regional energy sector integration.

The new IEA report concludes that this strategy is very much on target, a view reinforced by the very important decisions taken earlier this year to sharply reduce subsidies on transport fuels and on fuel oil. Over the medium term, more coal-fired power using clean coal technology (and later, more gas-fired power) is expected to replace much of the fuel oil currently used in the power grid. Meanwhile, government agencies are now in place to promote both solar and wind power and foster research and development in renewable technologies. While the stated target of reaching 2 gigawatts each of wind and solar capacity by 2020 is ambitious, a good start has been made: wind should reach 700 MW capacity this year, and next year the first concentrated solar power (CSP) plant rated at 160 MW should come on stream.

Legislation and institutions are in place to drive improvements in energy efficiency. More could be done – as always – in this area. In addition, the national power company could be restructured. Combined with the establishment of an energy sector regulator, this would be a major step towards the full liberalisation of the electricity sector, increasing transparency, efficiency and openness to foreign investment.

The report encourages the government of Morocco to persevere on its current course, but in particular to:

Sustain recent progress in reducing the level of fuel subsidies.

Reinforce the current energy efficiency strategy through clear regulation and incentives, while taking care to measure progress to date and learn from others’ experience, e.g. in the European Union.
Optimise the deployment of solar power, maximising the use of CSP at peak hours and facilitating the use of photovoltaics, by accelerating work in the medium- and low-voltage area currently under way in Morocco – including access to the grid.

Accelerate the establishment of an energy regulator to supervise an even more open power market and encourage wider use of gas.

Maintain the confidence of foreign investment and domestic industry, while also encouraging more R&D in new energies and the transfer of technology.

The IEA has prepared this in-depth review on the request of Morocco, one of its important partner countries. The review has been supported by the European Union.

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Eurasia Review is an independent Journal and Think Tank that provides a venue for analysts and experts to disseminate content on a wide-range of subjects that are often overlooked or under-represented by Western dominated media.

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