Energy policy of Morocco


Morocco's energy policy is set independently by two agencies the government, the Office of Hydrocarbons and Mining, which sets domestic oil policy, and the Office National de l'Electricité, which sets policy with regard to electricity. The two major weaknesses of the energy policy of Morocco are the lack of coordination between these two agencies and the lack of development of domestic energy sources.
The country has some hydrocarbon reserves, mostly in natural gas reserves that have been exploited. However, its main policy highlight is in adaptation to climate change: the climate change adaptation index ranked. Currently most of energy is produced through hydrocarbon thermal plants. However, government policy is on track to convert to a high renewable mix of 42% installed renewables by 2020, and 52% by 2030. Renewable include, hydroelectric, wind, and solar.

Oil and natural gas

According to January 2006 estimates by the Oil and Gas Journal, Morocco has proven oil reserves of and natural gas reserves of. Morocco may have additional hydrocarbon reserves, as many of the country's sedimentary basins have not yet been fully explored.
The Moroccan Office of Hydrocarbons and Mining has become optimistic about finding additional reserves – particularly offshore – following discoveries in neighboring Mauritania. At the end of 2005, 19 foreign companies were operating in Morocco, with an estimated total investment of $56 million per year. In May 2004, China Offshore Oil Corporation received a license to drill near Agadir. In April 2004, Norway's Norsk Hydro signed a 12-month exploration contract for the Safi Offshore Northwest zone, while Denmark's Maersk signed an eight-year agreement for eight blocks near Tarfaya. In March 2004, Calgary-based Stratic Energy committed to a three-year exploration program in two onshore blocks in northwest Morocco. The two concessions cover approximately. Other foreign firms engaged in exploration include Petronas, Cooper Energy NL, Shell, Total, and Tullow Oil.
Morocco produces small volumes of oil and natural gas from the Essaouira Basin and small amounts of natural gas from the Gharb Basin. Consequently, Morocco is the largest energy importer in northern Africa. Costs have been rising rapidly. High oil prices in 2005 increased import costs to approximately $2 billion for the year. In 2008, total costs related to energy imports reached $8 billion. In 2003, the Moroccan government announced that foreign companies could import oil without paying import tariffs. This followed a 2000 decision, in which, Morocco modified its hydrocarbons law in order to offer a 10-year tax break to offshore oil production firms, and to reduce the government's stake in future oil concessions to a maximum of 25 percent. The entire energy sector was due to be liberalized by 2007.
Recent activity in Western Sahara, which is believed to contain viable hydrocarbon reserves, has been controversial. In 2001, Morocco granted exploration contracts to Total and Kerr-McGee, angering Premier Oil and Sterling Energy, which previously had obtained licenses from the Polisario government. In 2005, the government-in-exile of the Western Sahara invited foreign companies to bid on 12 contracts for offshore exploration, with hopes of awarding production sharing contracts by the end of 2005. Both Premier Oil and Sterling Energy received conditional exploration rights. Foreign companies operating under Moroccan concession in Western Sahara have become targets of international protest campaigns. These companies include Total, Wessex Exploration, Svitzer, Wales' Robertson Research International and Norway's TGS Nopec. All have ended their operations in Western Sahara, with the exception of Kerr-McGee. As of November 2005, the company was the last to be drilling in Western Sahara, although the Polisario government has pressured it to pull out.
Morocco is a transit center for Algerian gas exports to Spain and Portugal. These are transported across the Strait of Gibraltar via the 300–350 Bcf/year Maghreb-Europe Gas pipeline. Natural gas from the MEG pipeline will be used to power Morocco's power project in Al Wahda.

Refining

Morocco has two refineries that are owned by Saudi-company Corral Holdings Societe Marocaine d’Industrie de Raffinage. The refineries are located at Mohammedia and Sidi Kacem and have a combined capacity of. In 2004, the Mohammedia plant returned to near full-capacity output levels, following the completion of repairs needed after a severe flood and massive fire in November 2002. Because of the completed repairs, refinery output surged 49 percent in 2004. The Mohammedia plant currently produces 80 – 90 percent of the country's refined petroleum products. In June 2005, Samir awarded a $628 million contract to modernize the Mohammedia refinery to a consortium led by Italy's Snamprogetti SpA and Turkey's Tekefen Company. Morocco hopes the refinery upgrade will prepare the refinery for competing with foreign producers when the market is liberalized in 2009. The upgrade is expected to be complete in 2008.

Oil shale

Ten known oil shale deposits in Morocco account more than of shale oil. Although Moroccan oil shale is studied since the 1930s, and there have been several pilot facilities for shale oil production, there is no commercial shale oil production yet. The most important deposits are Timahdit and Tarfaya.

Electricity

Morocco's electrical sector traditionally has been controlled by the state-owned Office National de l'Electricité, which the government reorganized in 1995 in order to regain profitability. Due to a growing population and economic development, Morocco's electricity demand is increasing rapidly. The country's annual electricity consumption reached 33.5 terawatt-hours in 2014.
Power shortages and a desire to control public spending have led the Moroccan government to make more use of the private sector to meet the country's power needs. The state's share of electricity generation likely will decline to 40 percent by 2020. However, ONE will continue to be solely responsible for distribution and transmission of electricity in Morocco.
In 2003, Morocco had an installed generating capacity of 4.8 GW. The country's two largest electricity power stations at Mohammedia and Jorf Lasfar are both coal fired. Most of the coal is imported from South Africa, although Morocco purchased Polish coal for the Jorf Lasfar power plant in April 2005. Morocco stopped coal production in 2000, when Jerada coal mine was closed. Jorf Lasfar became Morocco's first privately operated power station in 1997, when it was taken over by a U.S.-Swiss consortium. The consortium expanded the plant’s capacity to 1,400 MW in 2001.
The expansion at Jorf Lasfar is consistent with a wider campaign to increase generating capacity in Morocco. In 2005, as part of the Moroccan government's plan, a $500 million, 350 – 400-MW combined-cycle power plant began operation in Tahaddart. The plant is owned by ONE, Endesa and Siemens. In addition to the Tahaddart plant, ONE awarded Endesa the development rights of a two-unit, 800-MW gas-fired power station in the Sidi Kacem Province, with a completion date set for 2008 . ONE is also considering another pumped storage plant in the Azilal region south of Rabat.

Renewable energy

plays a key role in ONE's $3.4 billion energy development plan, announced in January 2004. The goal is to provide 80 percent of rural areas with electricity by 2008, while increasing the share of renewable energy from 0.24 percent in 2003 to 10 percent in 2011. The framework of regulation in Morocco generally supports the use of renewable energy in the electricity sector, as law 13-09 was announced in 2010. In 2015, Morocco further elevated their renewable energy target by announcing that they will attain a 52 percent portion of renewable energy in electricity by 2050.
In order to achieve the target, Morocco generates its electricity through renewable sources such as wind and solar power. Morocco aims to add 10 GW renewable energy capacity by 2030, consisting of 4,560 MW of solar, 4,200 MW of wind, and 1,330 MW of hydropower capacity.

Wind power

Morocco has set a goal to have 2 GW production capacity from wind power; it is part of the Moroccan Integrated Wind Energy Project which began in 2010.
As of 2016, Morocco has eight wind farms with the total operational capacity of 487 MW; another six wind farms are anticipated to be installed by 2020 with a total capacity of 1,000 MW.

Solar power

In November 2009 Morocco announced a solar energy project worth $9 billion that officials said will account for 38 percent of the North African country's installed power generation by 2020. Funding would be from a mix of private and state capital. The ceremony was attended by U.S. Secretary of State Hillary Clinton and the Moroccan king. The project will involve five solar power generation sites across Morocco and will produce 2,000 MW of electricity by 2020.
The project would add the equivalent generation output of the current electricity consumption of the country's commercial capital, Casablanca. Germany has expressed its willingness to participate in the development of Morocco's solar energy project that the country has decided to carry out. Germany will also take part in the development of a water-desalination plant.
The solar project focuses on developing Concentrated Solar Power and Photovoltaic facilities; both facilities are managed by Moroccan Agency for Solar Energy. Morocco pioneered solar energy technology by investing in Concentrated Solar Power program in Middle East and North Africa region. This project is one of the actions to reduce Morocco’s dependency on fossil fuels and to reach the goal of 52% power generation from renewables by 2030.
The biggest CSP project in Morocco is Noor Solar, situated in city Ouarzazate, on the edge of the Sahara desert. The project comprises 3 phases: Noor I, Noor II and Noor III. This Noor project is supported by a BOOT basis of ACWA Power Ouarzazate, MASEN, Aries, and TSK. The first phase of the program - Noor I - was inaugurated in February 2016. Noor I employs 500,000 parabolic mirrors to eventually generate up to 160 MW electricity, which makes it one of the largest solar power plants in the world. The program has two following phases - Noor II and Noor III - which are scheduled to operate by 2018. Beside CSP project, Morocco is also developing Noor PV 1 program and Noor Midelt phase 1, which essentially use photovoltaics to further increase the electricity generation from solar. The whole complex of Noor Plant are scheduled to come online in 2018. The complex would have 582 MW of capacity, which could be utilized to provide electricity for 1.1 million houses. From 2010 until 2015, electricity generated by solar and wind has increased almost four times.

Hydropower

Morocco has additional renewable resources that could be developed, including the country's four perennial rivers and many dams with hydroelectric potential. Morocco’s installed hydropower capacity is 1,770 MW. In May 2005, ONE selected Temsol for a $27.6 million project to supply solar power to 37,000 rural homes by 2007. Similar contracts were awarded in May 2002 to a consortium led by Total Energie and in January 2004 to Apex-BP. Currently, only 55 percent of outlying villages have access to electricity.

Biomass energy

Biomass is also one of the renewable sources that the country possesses in abundance, with 12,568 GWh/year and 13,055 GWh/year potential in solid bioenergy and combination of biogas and biofuels. However, the country has only utilized less than 1% of this potential, due to the high cost of investment and insufficient production process knowledge.

Nuclear energy

Morocco has expressed interest in nuclear power for desalination and other purposes. In September 2001, the government signed an agreement with the United States establishing the legal basis for constructing a 2 MW research reactor. Morocco signed an agreement with the U.S. company General Atomics to construct the research reactor east of Rabat.

Regional integration

Morocco is gradually integrating its electrical grid with those of its neighbours in Africa and Europe. Maghreb integration has been spearheaded by the Maghreb Electricity Committee, with physical integration initiatives that began in the 1990s. In May 2003, Moroccan representatives met with the energy ministers from other European and Mediterranean countries to discuss the feasibility of electricity market integration. In December 2005, Morocco, Algeria, Tunisia and the European Union signed a funding agreement that will pay for costs related to studying the electricity market within the three countries and how they might integrate into the European electricity market.
Tunisia, Algeria, and Moroccan networks are already connected to the European network managed by the European Network of Transmission System Operators for Electricity, which allowed these three countries to link their electricity systems to the E.U.’s single energy market and be at the heart of the dialogue within the framework of the Euro-Mediterranean Energy Partnership.