Morocco’s model in renewable energy
New technologies are often trapped.
Their true value comes only once people start using them, but until they have a proven track record few are willing to try. Breaking that bond and establishing a track record requires someone with insight – who can recognize the potential inherent in a new technology and willing to take the risk of unlocking it.
That was the case of Concentrated Solar Energy (CSP) in the Middle East and North Africa (MENA) region, until Morocco launched its bold program to invest in technology. With the first phase of the 500 MW NOOR project launched earlier this year, the 160 MW NOOR I plant in Morocco is an example for the CSP value region.
Learning from NOOR
It was to study the example of NOOR that government officials and experts in energy and finance met in Casablanca, Morocco earlier this year. The goal was to share knowledge and build networks to catalyze the development of CSP in a region ideally suited to technology due to its abundant sun. The conference was jointly organized by the Moroccan Solar Energy Agency (MASEN), which is responsible for leading the country to renewable energies, Climate Investment Funds (CIF) and the World Bank Group (WBG). The CIF and the WBG have partnered around the goal of supporting the installation of 1 GW of CSP generation capacity in the region through the CSP Clean Technology Fund (CTF) MENA Investment Plan.
One of the first lessons, given by MASEN president Mustapha Bakkoury in his opening remarks, was that Morocco was not committed to a particular technology. Morocco undertook to break its dependence on imported fossil fuels and take action on climate change. In order to achieve this objective, the goal was to meet 42% of its renewable energy generation needs by 2020, which rose to 52% in 2030 at last year’s climate talks in Paris, France . It was in the search of how to meet the current and future energy needs of the country within this national plan that CSP was identified as a solution.
In response to the market investigation that MASEN carried out, the national electric power company made clear that its greatest need was at dawn, once the sun had fallen. That was when demand for electricity peaked. CSP, with its thermal storage, could depend on meeting that demand. While photovoltaics has much lower capital costs, it can only generate electricity when the sun is shining. In recognition of the true value of CSP, Morocco was willing to invest.
Another lesson was the importance of concessional financing, in the short and medium term, to meet the higher capital costs of CSP. The CIF provided $ 435 million in concessional financing, which was used to leverage more than $ 3 billion from the World Bank Group, the African Development Bank and other European financial institutions. For the international financial institutions was an opportunity to support the development of a new technology that could play a critical role in the global change to renewable energy, a global public good. Investment in technology, in particular in MENA, will contribute greatly to reducing the cost of CSP at the global level. The sunny climate and temperature of Morocco will extend subsidy dollars far beyond investments in other regions. Along with contributing to the overall goal of moving away from fossil fuels through the development of renewable energy technology, Morocco is a way of harnessing its natural resources to meet the national objective of building its energy independence with a clean and reliable energy source.