Cutting power imports is key for Morocco

30 September 2010

Rabat must mobilise private investment and implement its capacity building programme on schedule to reduce energy imports that strain the state budget

At first sight, Morocco’s power sector looks to be in the comfort zone, with installed generating capacity far exceeding demand. But closer examination points to a different picture. In 2008, the last year for which data is available, Rabat was forced to import 18 per cent of its electricity needs from Spain, reflecting the fact that up to a quarter of installed capacity was not available.

Rabat already spends more than $1bn a year on energy imports, a sum it can ill afford

Morocco’s problems lie with the make-up of the power generation sector. Of total installed capacity of 5,300MW in 2008, just over 60 per cent was made up by thermal plants and a further 32 per cent by hydroelectric capacity. However, in recent years low rainfall has meant that a considerable proportion of the 1,700MW of hydropower has not been available.

Major issues

Rabat faces two major issues on the power front. The first is that demand is rising fast, growing by 6-8 per cent a year. The high rate reflects the continuing resilience of the local economy, strong population growth and a vigorous programme of rural electrification, which is increasing the population’s access to power.

Morrocco power factfile, 2008
Installed generating capacity (MW) 5,292
Peak power demand (MW)4,180
Growth in peak power demand (%)7
Reserve power margin (%)na
Largest generatorJLEC
Number of power customers3.8 million
Number of IPPs/IWPPs concluded2
Additional capacity requirement by 2019 (MW)9,000
Estimated cost of required capacity ($bn)10.8
na=Not applicable; IPP=Independent power project; IWPP=Independent water and power project. Source: MEED Insight

To meet the demand, state-owned Office National de l’Electricite (ONE) estimates that more than 5,000MW of new capacity will be needed by 2015 and up to 9,000MW by 2020. Such an intense capacity building programme would be challenging for most states, but for Morocco, which has no major commercial oil, gas or coal reserves of its own, it is daunting.

Rabat already spends more than $1bn a year on energy imports, a sum it can ill afford. Faced with an even higher import bill, the kingdom has increasingly turned to renewable energy projects to take some of the strain, launching in late 2009 a solar energy programme and in mid-2010 an integrated wind farm plan. The government is aiming for renewable sources to provide 20 per cent of all power by 2012 and 42 per cent by 2020.

Under the plans, wind farms are scheduled to deliver 2,000MW of capacity within 10 years through the construction of five new projects. The government has also set a 2,000MW target for solar generation capacity, under a $9bn plan involving five solar power plants. The first major project will be a 500MW solar plant near Ouarzazate, for which expressions of interest were invited in the second quarter of 2010.

The targets are ambitious, however: as of mid-2010, the kingdom had just 280MW of wind power capacity and 472MW of solar hybrid capacity installed.

In tandem with the renewable energy programme, ONE is also studying the possibility of developing a nuclear power capability. A 1,000MW reactor is planned, with commissioning tentatively scheduled for 2022.

Rabat has already signed co-operation agreements for civilian nuclear power development with France, and is focused on two 1,000MW nuclear reactors. It has a 2MW Triga experimental reactor under construction. Just as importantly, it may have its own uranium reserves. France’s Areva has been working with Office Cherifien des Phosphates (OCP) to determine whether uranium can be extracted from Morocco’s substantial phosphate reserves, while exploration activities are under way to investigate whether uranium ore itself exists in the kingdom.

Thermal power

Thermal power will continue to play a part in the capacity investment programme. In May 2009, Abu Dhabi Energy Company (Taqa), the owner of Morocco’s largest power plant, signed a partnership agreement with ONE to add 700MW at the 1,380MW Jorf Lasfar plant. Revised bids are also due to be submitted by the end of 2010 for the long-planned Safi IPP, which has proposed capacity of 1,320MW.

Ever since the US’ CMS Energy signed up for the Jorf Lasfar independent power project in 1998, private developers have expanded their presence in power generation, accounting today for some 40 per cent of total capacity. Germany’s Siemens and Spain’s Endesa are shareholders in the 384MW Tahaddert thermal power plant.

On the renewables front, France’s Theolia is involved in the 50MW Abdelhalek Torres wind farm and Spain’s Abengoa in the recently commissioned Ain Beni Mathar solar hybrid. More private investment is anticipated with the UK’s International Power and the local Narevam having recently been selected to develop a 200MW wind farm near Tarfaya at an estimated cost of $310m.

While state-owned ONE has a monopoly over transmission, private companies are playing an increasing role in electricity distribution. About two-thirds of the power distribution market is controlled by the private sector, which is responsible for utility provision in Rabat, Casablanca and Tangiers.

Morocco’s goal is to become an exporter of renewable power to Europe. However, that remains a distant prospect. Unless it can mobilise private investment and implement its demanding capacity building programme on schedule, it is likely to become an even bigger importer of energy in the short term.

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