The scramble for Morocco's energy future | FT Film

Morocco's Energy Future: A Transition in the Making

Key Concepts: Renewable Energy Transition, Green Hydrogen, Desalination, Energy Security, Foreign Investment, Local Community Involvement, Western Sahara Dispute, Energy Export, Economic Development, Just Transition.

I. Morocco’s Energy Context & The Drive for Transition

Morocco faces a critical need for stable, secure, affordable, and clean energy, driven by its current reliance on fossil fuel imports – approximately 90% of its total energy needs. This dependence creates economic vulnerability due to global market volatility and a substantial import bill. The country is actively pursuing a renewable energy transition to improve its balance of trade, reduce foreign currency demands, and bolster economic resilience. This transition is not merely an environmental imperative but a strategic economic necessity.

As Rachel Milard of the Financial Times states, “Morocco has some of the best energy resources in the world. Investors are flocking here. But who is this energy really for? And can Morocco make the best of this opportunity?”

Morocco’s ambition is reflected in its increased renewable electricity goals, aiming to triple capacity to around 15 gigawatts (GW) by 2030 and phase out coal-fired power generation by 2040. Currently, renewables account for roughly 25% of Morocco’s electricity production, demonstrating progress but highlighting the significant work remaining.

II. Morocco as an Investment Destination & Competitive Advantages

Morocco is positioned as an attractive investment destination due to its political stability, sovereign investment grade rating, good governance, abundant land, and exceptional solar and wind resources. The shift towards cost-competitive renewable energy is expected to attract energy-intensive industries.

“The world will start to move towards countries that can provide the most competitive energy. And as it happens, the most competitive energy, thank goodness, turns out to be renewables,” highlights the growing global trend favoring Morocco’s strengths.

The country’s unique geographical position also provides a logistical advantage. Morocco is currently the only African nation interconnected with Europe via electricity and gas, possessing bidirectional connections. This positions it as a potential energy hub for the continent. As stated by a representative, “Today, we are the only African country that is interconnected with Europe and the Atlantic basin logistically, culturally, but also electricitywise and gas-wise.”

III. Case Study: OCP & Integrated Energy-Water Solutions

OCP, Morocco’s phosphate-based fertilizer producer, serves as a compelling case study. The company has developed a solar farm to power its nearby mines, demonstrating a move towards self-sufficiency and reduced carbon emissions. The solar farm utilizes tracker systems to maximize sunlight capture and involved a workforce of 1,600 people, 70% of whom were local.

However, OCP’s energy needs extend beyond the solar farm, with a portion of the generated electricity directed to desalination plants addressing Morocco’s severe water scarcity – the country is currently in its eighth year of drought. OCP is implementing a large-scale program to desalinate water using clean energy, providing both for its operations and local communities.

The cost of desalination is decreasing when integrated with renewable energy sources. This allows for the provision of potable water and supports economic activities like agriculture. OCP is also exploring the production of green hydrogen from desalinated water, aiming to decarbonize its ammonia production – a key component of its fertilizer. The need for desalinated water for green ammonia production is considered relatively small and manageable.

IV. The Green Hydrogen Ambition & Associated Challenges

Morocco is actively pursuing a role as a hub for green hydrogen production, leveraging its abundant renewable energy resources. Green hydrogen is produced by splitting water using green electricity. However, this ambition faces several challenges:

• Cost: Producing green hydrogen is significantly more expensive (up to six times) than conventional methods.
• Market Demand: Securing customers for green hydrogen projects is proving difficult. OCP represents a potential internal customer, but questions remain about the cost of its products.
• Resource Allocation: Critics question whether prioritizing hydrogen production over meeting domestic energy and water needs is sensible. As one critic stated, “This is crazy. I mean we need those dissemination to provide water drinking water for people. How come that we are we are we are planning already to export this this uh this energy and our water while we need we do need this this energy and this water for for our people.”
• Western Sahara Dispute: Many large-scale projects are located in the disputed territories of Western Sahara, raising political and ethical concerns.

Despite these challenges, proponents argue that decarbonizing green ammonia and providing green fertilizer can incentivize the food industry to adopt sustainable practices.

V. Local Impact: Job Creation & Equitable Benefits

While renewable energy projects create jobs during construction (e.g., 50 people at the XLinks wind farm), concerns exist regarding the long-term employment prospects. There are reports of unfulfilled promises regarding local job creation and land grabbing during project development.

“But there is an issue of credibility of the the benefits that are being touted in these mega projects…during the operation phase. there's not a lot of jobs that are are created in the opposite that what we what they they promised actually in the in the beginning people protest because there's a lot of land grabbing and one of the the the argument that was used okay no you will have a plenty of of of jobs and we will also give a priority to the locals which is was not the case actually it's small in most of the those projects.”

Furthermore, there are concerns about the flow of profits from the Global South to the Global North, with an estimated $2 trillion leaving the Global South annually.

The importance of genuine local community involvement in all phases of project development – design, implementation, and operation – is emphasized as crucial for a “just transition.”

VI. Recent Developments & Future Outlook

Companies like Aquapower (Saudi Arabia) are developing renewable energy and desalination projects in Morocco, highlighting international investment. XLinks, a British company, initially planned to export green electricity directly to the UK via underwater cables but faced setbacks in securing a revenue guarantee contract. They are now exploring alternative locations and industrial bilateral offtake agreements.

The Moroccan government is enacting regulatory reforms to ensure a stable and bankable investment environment. The overall outlook is positive, with energy viewed as a fundamental enabler of prosperity. As one expert concludes, “Energy is such an enabler of life itself. It is the foundation of prosperity. In a country like Morocco where you can generate energy competitively in abundance, well, it's called renewable resources for that reason.”

Technical Terms:

• Gigawatt (GW): A unit of power equal to one billion watts.
• Desalination: The process of removing salt from seawater to produce freshwater.
• Green Hydrogen: Hydrogen produced by splitting water using renewable energy.
• Green Ammonia: Ammonia produced using green hydrogen.
• Electrolysis: The process of using electricity to split water into hydrogen and oxygen.
• Tracker System: A system that adjusts the angle of solar panels to follow the sun's movement, maximizing energy capture.
• Sovereign Investment Grade Rating: A credit rating assigned to a country, indicating its ability to repay its debts.
• Bilateral Offtake: A direct agreement between a power producer and a consumer to purchase electricity.