Morocco’s sustainable energy transition and the role of financing costs: a participatory electricity system modeling approach

Abstract

Background: Morocco is facing major challenges in terms of its future energy supply and demand. Specifically, the country is confronted with rising electricity demand, which in turn will lead to higher fossil fuel import dependency and carbon emissions. Recognizing these challenges, Morocco has set ambitious targets for the deployment of renewable energy sources for electricity generation (RES-E). The realization of these targets will lead to a fundamental transition of the Moroccan electricity sector and requires substantial public and private investment. However, different risks constitute barriers for private RES-E investments and lead to high financing costs, which may eventually discourage capital-intensive RES-E projects.Methodology: While the existing literature has mainly focused on assessing the impact of financing costs on the economic competitiveness of individual technologies, the aim of this research is to assess the techno-economic feasibility of different electricity generation portfolios. To recognize the social dimension of the sustainable energy system transition, the electricity scenarios for Morocco have been jointly developed with stakeholders in a scenario building workshop in Rabat, employing a downscaled version of the open source electricity market model renpassG!S, augmented by a weighted average cost of capital (WACC) module.Results: In the stakeholder workshop, four different electricity scenarios for Morocco were co-developed. Each of these scenarios describes a consensual and technologically feasible future development path for the Moroccan energy system up to 2050, and comprises conventional fossil fuel-based technologies, as well as RES-E technologies in varying shares. Employing the downscaled renpassG!S model, we find that total system costs, as well as average levelized costs of electricity (LCOE) can be reduced substantially with low-cost financing. Conclusions:Our results indicate that de-risking RES-E investments can lead to cost competitiveness of a 100% RES-E-based electricity system with mixed-technology scenarios at marked financing costs. Therefore, we identify specific de-risking recommendations for Moroccan energy policymaking. In addition, we argue that participatory scenario modeling enables a better understanding of the risk perceptions of stakeholders, and can eventually contribute to increasing the political feasibility of sustainable energy transition pathways.

An AHP-SWOT-Fuzzy TOPSIS Approach for Achieving a Cross-Border RES Cooperation

“…Investors' risk perceptions are particularly high for RES-E technologies, which are characterized by high capital expenditures, and for developing countries. Nowadays, it is a big challenge for Morocco to divert current investments from conventional technologies to low-carbon, and raise additional financial resources for operationalizing the RES-E transition, given the anticipated increases in electricity demand [79].…”

Adequacy of Renewable Energy Mixes with Concentrated Solar Power and Photovoltaic in Morocco: Impact of Thermal Storage and Cost

“…In the technology strategy, all correlations between different zones are ignored, while, in the base strategy, correlations between different technologies of the same zone are also ignored (Section 2.1). These fronts are straight lines with a slope given by the mean-risk ratio (12),…”

“…In terms of cost, PV in Morocco is approaching grid parity [7] as a result of declining costs during the last years [8] and this trend is expected to continue [9]. CSP, on the other hand, has high cost of capital [10], even its Levelized Cost of Electricity (LCOE) tends to be lowered by its high capacity factor [11], and therefore requires policy mechanisms to lower the investment risk [12,13]. In addition, although not commonly used in existing PV farms, batteries are likely to make PV more expensive than CSP combined with relatively cheap TES [14].…”

“…Mean-risk ratios(12) of the global, technology and base fronts without the maximum-cost constraint for the different combinations.…”

Towards a large-scale integration of renewable energies in Morocco

“…There is an urgent need to modernize and improve the Moroccan grid infrastructure to ensure a wide penetration of wind in the energy mix [47] . Most wind farms are either remote from the power grid or have poor electrical infrastructure that limits their level of penetration into the power grid.…”