Abhatoo - Centre Nationale de Documentation

Morocco is a global leader in transforming its energy sector to one that is more energy secure and efficient, as well as financially and environmentally sustainable. The country’s remarkable progress on energy subsidies reform and ramping up renewable electricity generation are instrumental to effective implementation of Morocco’s National Energy Strategy 2009-2030 and its Nationally Determined Contribution (NDC). Looking forward, Morocco needs make substantial additional policy efforts to enable its ambition of reaching 52% renewable installed capacity by 2030, while preserving valuable fiscal resources from wasteful and inefficient energy subsidies and protecting those people who could be adversely affected by these policies.
The progress on the implementation of National Energy Strategy has so far resulted in electricity savings, greater renewable energy generation, and significant emission reductions. The government of Morocco started the implementation of its National Energy Strategy in 2009. The Morocco Energy Policy MRV analysis shows that energy subsidies reform and renewable policies to date, resulted in the reduction of 5.6 million metric tons of carbon dioxide (MtCO2) during the 2009-2016 period relative to the baseline. The policy package saved 378 GWh of electricity in 2016, equivalent to 1.1% of electricity generation, and increased renewable energy in that year to 32% of total installed capacity, as opposed to 26% estimated in the baseline.
More needs to be done for the Moroccan electric system to achieve long-term financial-energy-climate sustainability. During 2014-2016, electricity tariffs had been raised causing the cost-revenue gap in the power system to be reduced. However, this increase was not sufficient to recover the system cost, which still exhibited a sizeable shortfall of US$356 million in 2016 (10.5% of total system cost). In the ex-post analysis of the 2009-2016 period, it can be seen that with the policy package in place, electricity was generated significantly less from oil, and more from natural gas, wind, hydro, and coal, relative to the baseline. But fuel switching between oil and particularly coal, is not desirable from the climate change perspective.
Continuation of energy subsidies reform and tariff reform, and acceleration of renewables are key to the success of the National Energy Strategy and the NDC. In the future period of policy implementation (2016-2030), there should be significantly less generation from coal and liquefied natural gas (LNG), as renewables are scaled up. Electricity savings could reach 7,121 GWh by 2030—11% of baseline generation. These changes are expected to reduce 35 MtCO2 in 2030 (48.6% of the reduction committed in the NDC). In cumulative terms, the policy package reduces 371 MtCO2 during 2016-2030. The Policy Scenario does involve higher investment costs of renewables (additional US$280 million per year by 2030), but the overall net system cost is lower than in the baseline. These sustained reforms need to be accompanied by building public support, and effort to leverage private investment in renewable energy and necessary infrastructure.
Synergy exists between fossil fuel subsidies reform, cost-based tariffs, and renewable energy policy. The expansion of renewable energy to meet the NDC target, on its own, would achieve significant emission reductions, but even more emission reductions can be achieved by the whole policy package. The other two policies, on their own, could have perverse effects, but become clearly beneficial as part of the policy package. With Morocco’s existing generation capacity, including ample coal-burning capacity but limited renewable energy, removal of oil subsidies alone could cause a shift from oil to coal and natural gas, slightly increasing carbon emissions on a net basis. In contrast, combining with rapid expansion of renewable energy, the removal of oil subsidies can lead to a shift from oil to renewables, reducing emissions.
Morocco would benefit from continuing to utilize the Morocco Energy Policy MRV tool to track policy implementation and access international climate finance and markets. Morocco Energy Policy MRV (M-EPM) tool offers multiple benefits: tracking policy performance and measuring impact on key indicators, informing and improving policy design, supporting NDC implementation, as well as facilitating access to climate finance/markets. The preparation of a pilot program is underway--in the frameworks of the Transformative Carbon Asset Facility and the Carbon Partnership Facility administered by the World Bank--to use the M-EPM tool as a platform to evaluate and monetize emission reduction assets from the country’s energy subsidies reform and renewable policies. Such program provides an opportunity to use international support to advance transformational policies that can deliver large-scale climate mitigation outcomes and has a potential for replication in other countries. Once again, Morocco is leading the way in developing innovative and transformative approach to support the global climate goal.
Conduct further analytical work to support tariff reform and renewable energy scaleup, and advancing on policy implementation. In terms of analytical work, this report highlights the benefits to Morocco of continuing to (i) analyze the broader impacts (economic, fiscal, social, and distributional) of energy subsidies reform and rapid transition to renewable energy, (ii) develop a better understanding of the trade-offs between design options of reform and different pathways toward the 52% renewable goal, (iii) carry out in-depth study to develop grid integration strategy for large-scale renewable and strategy for scaling up energy storage technologies to fill the knowledge gap; and (iv) explore cross-boundary trades of renewable-based electricity between Morocco and Europe, as well as Africa. With respect to policy implementation, the report recommends that Morocco (i) addresses critical barriers to continued tariff reform and private sector investment in renewables, (ii) puts in place additional complementary measures to minimize adverse policy impacts and build public support, (iii) continues to improve investment climate and provide incentives for renewable energy investment to further leverage private sector finance; and (iv) strengthen the use of grant funding, concessional finance, and climate finance to make additional progress on energy subsidies reform and renewable energy deployment.