Morocco aims to reduce the country’s dependence on commodities imports and exploit national wind and solar potential. The New Energy Strategy approved by the Moroccan Government has set an ambitious target of 52% share of renewables on total installed capacity by 2030. Small-scale PV is expected to play a pivotal role in achieving the country’s goals; nonetheless, is Morocco ready?

RES4Africa’s new study “Small-scale PV Capacity: Is Morocco Ready?”, developed in collaboration with AFRY and Cluster Solaire present the results of examining the barriers to unleashing the development of small-scale PV capacity in Morocco. The study identifies how Morocco can improve its policy and regulatory framework to reach the full potential of small-scale PV deployment and increase the attractiveness of self-consumption for Micro Small Medium Enterprises and local administrations. REGlobal presents an extract from this report…

Solar Power development in Morocco

Currently, installed solar energy capacity in Morocco amounts to 760 MW approx., of which about 200 MW is photovoltaic. Solar power installed capacity mainly comes from the Noor-Ouarzazate plant in central Morocco, the world’s largest concentrated solar power plant (CSP), which includes 72 MW of PV capacity.

Small-scale PV has first made its entry into the Moroccan market through the rural electrification programme PERG, which deployed solar home systems in the most isolated areas, where access to the grid was not possible to achieve. Solar kits consist of two solar panels of 290 watts and two batteries with a total capacity of 300Ah, providing up to three days of energy supply. More than 50 thousand off- grid PV systems, covering more than 100 thousand homes, were installed during the program, and IRENA assessed a total off-grid PV capacity higher than 20 MW.

Moreover, in 2019 ONEE announced a solar program 2019-2023 in order to install 2015 MW of solar energy. Some other rooftop-PV complex has already been installed in few universities or public buildings.

In 2015 the Ministry of Energy Transition and Sustainable Development launched the program Mosquee Vertes. This program, commissioned by the German Federal Ministry for Economic Cooperation and Development (BMZ), and led by MEME, had the goal to develop the energy efficiency and the renewable energy production in the Moroccan mosques. In cooperation with the Ministry of Religious Affairs, the former state energy investment company (Société d’investissement énergétique, SIE) and the Moroccan Agency for Energy Efficiency (Agence Marocaine pour l’Efficacité Energétique, AMEE), the Moroccan government was able to increase energy efficiency, train solar installators and raise awareness among the population on this opportunity, especially thanks to Imams cooperation.

Moreover, this program was able to train and hire almost 300 employees that are now suitable for solar project installations and to upgrade almost 900 mosques in terms of energy efficiency and energy production via small-scale PV installations. In addition, thanks to the Ministry of Religious Affairs and AMEE, guidelines presenting arguments for energy efficiency and the increased use of renewable energies from a religious perspective have been defined. More than 800 imams and women preachers may use such guidelines to spread the knowledge they have acquired about energy efficiency to their communities. Finally, an official Website and a Facebook page with nearly 20,000 followers have been created to spread the knowledge of the information.

Solar-PV industry in Morocco

The solar industry is already in place in Morocco; many players are positioned at different stages of the value chain in the Moroccan market. Indeed, several local companies assemble and mount solar collectors (PV INDUSTRY, ALMADEN, CLEANERGY) or produce complementary equipment to photovoltaic panels such as batteries and solar equipment. Operators such as Ifrikia, Casabloc, Imacables, Câbleries du Maroc and Nexans produce batteries, electric cables and switches. In addition to these local producers, there are actors who act as intermediaries for the marketing of imported products. In most cases for installation, importers deal directly with service providers. Design, maintenance, servicing and after-sales services, on the other hand, are in most cases subcontracted to local companies. Despite the presence of a handful of local companies able to produce PV panels, Cluster Solaire reported that in 2018, 100% of the solar panels used were imported.

The large-scale development of small PV represents a growth opportunity for this already established market. The unexploited chance to develop a local PV panel producer market, however, could make Morocco dependent on imported PV panels, causing an increase in the upfront investment cost.

From the end-user point of view, the comparison between electric tariffs and LCOE of rooftop-PV in Morocco has been thoroughly investigated by a study performed by GIZ in 2017. Taking into account the assumed LCOE evolution for consumption bands above 300 kWh per month, to which the tertiary sector currently belongs, and comparing them with current electricity tariffs for MSMEs connected to low voltage, LCOE is about 30% lower than electricity tariffs. A similar outcome emerges from the study performed in 2020 by the local stakeholder Cluster-Solaire too. They observed that since 2014, the cost of the photovoltaic kWh has become competitive compared to the cost of the electric kWh, encouraging consumers to replace their source of electricity supply, especially for consumers whose need is predominantly during the day such as tertiary and industry (e.g. schools, universities, administrations, hospitals, factories, etc). In terms of small- scale PV development, it is thus expected that MSME and public sector could be the pioneers due to a more similar profile between power consumption and PV power generation.

Despite the economic attractiveness, the development of small-scale PV market has not yet taken place, not even among those segments where the consumption profile would be most profitable. This is due to a series of barriers, mainly resulting from the regulation in force.

Electricity regulatory framework in Morocco

The electricity sector is still vertically integrated, but significant steps towards the liberalisation have been done. In 2009 the GoM developed the National Energy Strategy (NES) and the laws containing provisions to liberalize the electricity market, renewable energy and energy efficiency.

The sector is dominated by the state- owned operator: Office National de l’Electricité et de l’Eau (ONEE), which acts as a producer, distributor and retailer of the water and electric power. ONEE can give concessions to private operators with purchase guarantees and has the status of single buyer of electricity produced. The Ministry of Energy Transition and Sustainable Development has a responsibility to set up the energetic strategy and the general framework while the Ministry of Interior is in charge of the supervision of the autonomous utilities of distribution.

Since 1994 Morocco has entered in a long period of energy market reform, aiming to progressively introduce competition at the different levels of the sector value chain as well as reform the sector governance framework. The reform, still undergoing, aims to establish a new industrial organization and new market functioning in order to achieve:

  • A more competitive market, and most recently
  • Ambitious targets for renewable energy in 2020 and 2030.

In terms of energy transition, the Law 13-09, introduced in 2009, allows electricity to be produced, sold and exported by any private producer as long as they utilise renewable energy sources. Moreover, the establishment of a National Energy Regulatory Authority (ANRE) in June 2016 is a further step towards liberalization of the market, and aims to regulate both electricity and gas market, with clear responsibilities to the regulator:

  • The definition of commercial and technical rules of the electricity market
  • The adoption of a grid code and grid access rules
  • Network and retail tariff methodologies

However, ANRE became formally operational with several years of delay (2021), still leaving ONEE acting as both a decision maker and regulator.

The result of the Moroccan energy reform is a hybrid market model where a regulated market, supplied by the single-buyer and distributors companies, coexists with a free retail market supplied by renewables producers and self-producers.

Currently, three main routes-to-market are present for RES in Morocco, for both large installation and distributed generation:

A TSO Procurement scheme where the IPP sells directly to the single buyer ONEE

A Retail Direct-Sales model, introduced by Law 13-09

A Self-production model, defined by Law 16-08

In case of small-scale PV for both public sector and MSMEs the most suitable route-to-market is represented by the self-production model for a renewable plant.

Regulatory framework for renewable self-consumption

Any renewable plant is subject to the RE law 13-09 relative to the development of renewable energy, adopted and published in the official bulletin the 18th March 2010. Law 13-09 was promulgated in order to liberalize and develop the renewable energy sector.

The 13-09 Law aimed to introduce several changes:

  • The opening up of renewable electricity generation to competition
  • Access to the transmission of renewable electricity via the national grid
  • The possibility of exporting electricity via the national grid
  • The possibility for a developer to build its own direct transmission line

Moreover, Law 13-09 describes several permitting regimes for the construction, operation, capacity extension or modification of electricity production facilities from renewable energy sources, depending on the installed capacity. In case of a small-scale PV installation, with the exception of residential one, a simple declaration with the administration is required by Law 13-09. The declaration is accompanied by an identification dossier of the declarant and a technical dossier on the renewable energy source and its technical specifications.

Law 13-09 represented an obstacle for small-scale PV producers because it only opened for High and Medium voltage connections. For this reason, Law 58-15, an amendment to Law 13-09, defined the opening for renewable sources to the low voltage connection. Moreover, Law 58- 15 introduces the net metering scheme for plants connected to high voltage and allows private investors in renewable power to sell their surplus output to the grid, up to 20% of their annual production.

However, the relative implementing decree 2-15-772 regulated the access to the national medium voltage network only, and no decree has been drafted for low voltage network. This issue is expected to be removed by ANRE and by the publication of the grid code, currently in preparation with the European Bank for Reconstruction and Development (EBRD) supervision. Moreover, to date, a net metering scheme is in place for High Voltage only.

In case of small-scale PV installed with the aim of self-production, the renewable plant is also subject to the self-production Law 16-08, later modified by 14-54 amendment.

Self-production law 16-08 defines that:

Natural or legal persons may, on their own request, be authorised by the Administration to produce electrical energy by their own means, provided that:

  • Such production capacity does not exceed 50 MW
  • It is intended for the exclusive use of the producer
  • It does not disrupt the electrical power supply plans of the area concerned
  • The surplus from production not used by the producer for its own needs is sold exclusively to ONEE.

Installations between 50 MW and 300MW are not authorised, while for production plants exceeding 300MW of installed capacity, on the other hand, self-producers are authorised to produce electrical energy by their own means, with the right of access to the national electricity grid to transport the electricity to the consumption site, provided that:

  • The production is for the exclusive use of the producer
  • The production does not disturb the power supply plans of the national electricity network
  • The surplus of the production not used by the producer for its needs is sold exclusively to ONEE

In both cases, agreements between the self-producers and the ONEE must be concluded concerning:

  • The technical terms of connection to the national electricity grid
  • The commercial conditions for the supply of electricity by ONEE, if necessary and at his request the commercial conditions for the buy- back of the surplus energy produced
  • The technical terms of access to the national electricity grid as well as the commercial conditions relating to the transport of electrical energy.

Stating IEA 2019, nearly 3% of the electricity production connected to the grid derives from self-production. However, due to the lack of implementing decree of law 15-58 on low voltage, the share of small-scale PV production is estimated to be negligible.

Factors slowing-down small-scale PV deployment in Morocco

The implemented regulation for renewable plant for self-consumption leaves open points and introduces barriers that might hinder the realisation of new projects. The main barrier concerning small-scale PV deployment in Morocco regards:

  1. The lack of grid connection in LV: as of today, no renewable production plant can connect to low voltage grid, and this prevents the plant from selling energy when the power produced exceeds the power consumed. This barrier inhibits the economic attractiveness of the opportunity.
  2. At the time of writing, net-metering scheme is not present for low-voltage production plant. At the end of 2015, the Government of Morocco adopted Law n°58-15 amending renewable energy law and introducing net-metering scheme for solar PV and onshore wind plants. Only power plants connected to the high-voltage grid may benefit from net-metering. Those connected to the middle- and low-voltage level are expected to be eligible at a later date.
  3. Law 16-08 and following amendments stated that self-producers must produce energy “par propre moyens”, or “by their own means”. The notion of production by one’s own means, however, is subject to a restrictive interpretation by the administration, which may oppose contractual arrangements aiming to adapt this principle. This expression is in fact under discussion. A Draft Law that should update the self-consumption regulation, specifies that the self- producer must be the owner of the self-generation installation while it opens to the possibility of entrusting the construction and/or operation and maintenance of the said installation to third parties.
  4. The independent body (ANRE) delayed its entry into operation still leaving a lack of clear and public regulation. Grid connection rules for self-producer are not clearly defined and still rely on private negotiation with ONEE. This barrier is expected to be removed once grid code is published by ANRE. Moreover, both tariffs for supply of the required energy, if needed, and the tariff for selling the energy surplus still rely on private negotiation with ONEE, making the opportunity less attractive and more complex to assess during the feasibility phase of the project.
  5. The high impact of the initial investment is not attenuated by any incentive scheme for small-scale PV in Morocco.
  6. The PV market is already established, however Morocco historically relied on import instead of local PV panel production, as detected by local studies. In case of large-scale deployment of small-scale PV, this may represent a barrier in terms of Moroccan dependency on import, causing an increase of the upfront investment costs.
  7. There is a lack of knowledge among the population about the opportunity represented by small-scale PV installations. In this context, several initiatives already in place, like the Green Mosque program, are extremely helpful in spreading the small-scale PV knowledge across the communities, making the society ready for the large- scale deployment of small-scale PV.

In addition to the above-mentioned list of barriers preventing small-scale PV spread, a further obstacle is going to be introduced by the new Bill 82.21, presented by the Minister of Energy Transition and Sustainable Development on 11th November 2021 and currently under discussion. Among the measures provided by the Bill, which aims to regulate the legislative and regulatory framework governing the self-production of electricity, the upper limit of 10% of the total electricity surplus that can be sold is going to be introduced. This would represent a disadvantage for prosumers since it would limit the possible gains achievable from the installation of a solar PV, further discouraging small-scale PV deployment.

In order to better understand how these barriers influence the market, the seven enlisted issues are further categorised in order to assess the openness readiness and attractiveness of the market. The identified barriers have been grouped according to a framework for regulatory review which have been already used in previous studies. Such framework focuses on the fundamental elements that create an enabling framework for the scale-up of investments in new renewable energy capacities:

  • Openness: legislation and regulation that ensure RES development planning and long-term visibility to investors
  • Attractiveness: legislation and regulations that ensure competitive development and implementation of RES projects as well as fair competition among power generation technologies
  • Readiness: regulation and conditions that ensure efficient integration and management of increasing RES capacities in national power systems.

The complete report can be accessed here