Morocco – well placed to benefit from Europe’s energy transition

Population: 37.13 million (+1.2% vs 2020)

GDP per capita (PPP): $7,360 (+0.9% compared to 2020)

Debt to GDP: 76.6% (+1.2% vs 2019)

Power per capita: 765 kWh

Reduced fossil fuel subsidies, CSP leader

By the end of 2020, Morocco had 1.4 GW of installed wind, 530 MW of CSP and just 220 MW of solar PV, meaning total solar has only reached a third of its old 2020 target. With hydropower at 1.77 GW and 465 MW of pumped hydropower, the country already has a significant amount of clean energy – 3950 GW out of a total of over 10 GW. The rest of the electricity is mainly coal, dependent on Russian imports, with a small amount of natural gas. A new coal-fired power plant was commissioned in 2021, but the country then promised at COP26 not to build any more.

By 2030, Morocco aims to achieve 20% solar, 20% wind and 12% hydroelectricity in its energy mix, compared to 35% in 2019. Nuclear has been considered with a nuclear training center created in March 2021, and maybe there will indeed eventually be a nuclear power plant using SMR or some other modern technology. The country has room for at least several gigawatts of additional hydropower.

Surprisingly for a desert country, wind is still envisioned to be built as much as solar – and a look at a wind speed map shows you why. The southwest coast has almost the same wind speeds as the North Sea – but it has them on land. It is an exceptional resource that helps explain the reassertion of the Moroccan occupation of Western Sahara – more on that later.

Morocco’s NDC under the Paris Climate Agreement was updated last June with a 45.5% reduction in emissions by 2030, 60% of which depends on foreign aid. The phosphate industry – for which Morocco has three-quarters of the world’s reserves and the third largest production – has gained particular recognition as an emissions reduction target.

So far, Morocco’s most unusual achievement in the energy transition is its CSP networks – 530 MW, or 8% of the global CSP total. He was also a pioneer in North Africa as the first to reduce fossil fuel subsidies. Morocco has only set up a national oil and gas projects division of the National Office of Hydrocarbons and Mines (ONHYM) a few months ago, in November. If a large and suitable offshore gas field is discovered, you could see Western oil majors investing in new gas development in the country, but at this point in history, the “end of the beginning” of the energy transition, that seems unlikely. outside. Even the existing gas trade between Nigeria and Europe via pipeline died out after the failed renewal of the transit agreement with Algeria.

A not-quite-stagnant economy

In terms of wealth per capita, Morocco, Algeria, Tunisia and even Libya are surprisingly close to each other – but Morocco does so without Algeria’s fossil fuels – the country imports 91% of its gas and 99% of its oil – and with an HDI ranking. 45% of the population is employed in the agricultural sector once forestry and fishing are included and the sector accounts for 15% of GDP. You might think that Morocco doesn’t have the best agricultural land and you would be right. Agriculture is an investment that does not pay off quickly, any more than the fight against rebels in the Sahara, which has cost the country tens of billions over the past half century.

With a low-skilled workforce, manufacturing is also limited to lower-value propositions, and according to some reports, education levels may even drop. Currently, literacy is on par with Tunisia and Algeria at 79%, but the Arabization language policy and other factors have resulted in poor performance of Moroccan schools. Arabization aimed to sideline the Amazigh Berber language, a policy that was reversed by the new prime minister. But what Moroccans need most is to be able to speak English for business and work, a language that was only mandated to be taught in schools in 2002. European languages ​​left behind legacy of colonial times are the Spanish and French and the Amazigh-Arab dispute. is also a distraction. France is an important trading partner but that doesn’t go any further.

All in all, you have a poor country that still only has a growth rate of between 2% and 4% in most years, with its main sectors like tourism, agriculture, textiles and phosphates – all very basic efforts.

The silver lining is car manufacturing, which could account for up to 25% of GDP this year, with local content reaching 60%. The finance and sales destination is Western Europe, but Tesla’s electric vehicle chip manufacturing has also been the subject of noise. This industry and others will be bolstered by Morocco’s high-speed rail infrastructure projects, which could eventually extend to West Africa after recent military successes against rebel forces in the south of the country. Although the country is both poor and has poor institutions at best, it is more open for business than its neighbors and has some potential.

Conflict in Western Sahara reignited by developments

Morocco is a hybrid democracy. Real elections take place, but political parties are tamed by a monarchy that still wields great formal power. As a result, even under the Justice and Development Party (PJD), which is supposed to be Islamist in the style of the Muslim Brotherhood in a context of democracy and monarchy in Morocco, the burqa was banned in 2017 and diplomatic relations were established with Israel last year. . The PJD totally collapsed in the 2021 elections to be replaced by even more secular parties. Celebrity and clientelism guide the actions of Moroccan politicians more than ideology or vision.

The reconciliation with Israel has been overseen by the United States, with which it is strongly allied, including at the intelligence level, but it is the EU which is of course Morocco’s largest destination for exports and emigrants. . Then there is China – Morocco signed a Belt and Road Implementation Plan just a few weeks ago, making it the first state in North Africa to pass a protocol. ‘OK.

Morocco’s diplomatic standing is currently weak, feuding with Spain and France and ending official diplomatic contact with Germany, over all their stance on its dominance of Western Sahara. Like Turkey, the country can choose the extent to which it suppresses migration entering Europe through its territory, and its intelligence alliance with the West is also important in suppressing Islamist terrorism. Meanwhile, some politicians in the United States are calling for the revocation of American recognition of Moroccan sovereignty in Western Sahara – this recognition is how President Trump bought Morocco’s recognition of Israel.

The Western Sahara conflict dates back to 1975, but there was a ceasefire in 1991 that was only recently broken by Morocco, which forcibly restored the land route to Mauritania.

Algeria’s support for the Polisario Front, which is the Sahrawi independence movement in Western Sahara, is also one of the main reasons for the bad relations between it and Morocco, while Algeria is unhappy that Morocco is on good terms with Israel and accuses it of supporting the Berber secessionist movement MAK.

At least so far, these quarrels have not hampered existing trade, especially not with Algeria since this border has been closed since 1994 anyway. But Morocco could always use new agreements and more direct investment. foreigners – it usually receives 2 or 3 billion dollars a year, mainly from Western Europe.

Renewables could use a subsidy or auction system

Amusingly, the Polisario Front has accused Morocco of using green energy developments in Western Sahara to legitimize its occupation – this kind of “greenwashing” is new! The Front even produced its own net zero plan, drawn up with the help of some Western intellectuals. It is very likely that the Sahrawi cause still does not receive any substantial help outside of Algeria, and these intellectuals are just idealistic NGO types.

Another possibility worth mentioning for Morocco’s green future is the construction of solar power in North Africa coupled with UHVDC lines transmitting it to Europe. The Morocco-UK power project envisions a 3.6 GW, 3,800 kilometer subsea HVDC line across Devon. This line would cost billions with a power loss of up to 15% in transit, but would still be very attractive – giving Morocco a new export and the UK more capacity to use solar power. CSP’s presence in Morocco could also come into play with energy storage amplifying the ability to use the line consistently, but project developer XLinks seems more interested so far in a 5 GW battery complex and 4 hours accompanying 10.5 GW of solar and wind power.

Along the same lines, the Western Sahara region is perfect for green hydrogen production – excellent land availability, wind and sun, coastal, on the doorstep of Europe. But Morocco only has a 100 MW hydrogen tender scheduled for 2022, just as it has installed just 200 MW of photovoltaics. For wind power alone, Morocco has pledged to mobilize $1.6 billion in global financing for a 1 GW wind power program, which will be commissioned nationwide by 2024.

It is therefore a country in a good position, but it still has to seriously encourage renewable energies or establish a lot of significant short-term ambitions. Most likely, Morocco is still waiting for this foreign aid and the ideas mentioned in its NDC.