African Potential: 
unleashed or unfulfilled?

Morocco’s solar power story is just beginning

Traditionally the frequency and intensity of North Africa’s sunlit days has been seen as a handicap, robbing much of the region of agricultural potential. With the development of solar power generation however that high rate of solar insolation is now considered a possible asset, one that could not only solve national power issues but also contribute towards the global movement for cleaner power production and offer local economies a notable boost through trade with energy-hungry Europe. 

The 21st century has accordingly seen North African nations from Morocco through to Egypt engage in domestic as well as ambitious transnational projects in order to decrease their dependency on non-renewable energy sources and expensive imports.A 2005 report by the German Aerospace Centre contends that if just 0.3 percent of North Africa were to be covered with solar power-generating facilities enough energy would be produced to supply the power needs of the then European Union. That figure alone points to the mighty potential of solar power to impact trade, industry, socioeconomic development, and more.

But in the wake of the Arab Spring, foreign investors have being looking at North Africa askance, and Europe’s economic downturn has had a further negative impact on development of the sub-region, with international investors instead turning to more attractive destinations like East and West Africa. The bold Desertec project, for instance, which encompassed MENA and Europe, fell through in 2013, four years after its launch, and while there were other issues afoot, political conflict in North Africa was a significant contributor to shareholders’ waning zeal and the project’s subsequent collapse.

Morocco: a North African exception

Only Morocco has managed to keep its reputation and economy largely intact these past few years. The World Bank, in a January 2014 feature story, explained the country’s escape from the travails of its fellow North African nations as follows:

“In a region that has recently come to be associated with social upheaval and anemic growth, Morocco often stands out as an exception. Over the last decade the country has made remarkable progress in reducing poverty and sustaining economic growth. Policies focused on steady public finance consolidation and manageable budget deficits opened up the fiscal space for sustained investment and social expenditures. Following the 2011 demonstrations, a new constitution was ushered in, accompanied by the launch of a number of reform programs aimed at responding to popular demands for more voice and accountability.”

Morocco places high priority on going green

The article then turns to focus on a particularly laudable aspect of Moroccan policy – one that is not well known – namely that it is “rapidly turning into a beacon of environmentally sound policies and domestically driven climate action”. The Moroccan Government has committed itself to a national ‘green’ agenda, which includes reducing its reliance on expensive fossil fuel imports (the country lacks fossil fuel reserves of its own) and increasing its production and use of renewable energy sources, which includes solar power, and concentrated solar power (CSP) in particular. Morocco is receiving multidimensional support from the World Bank Group in its greening endeavours.

Morocco’s solar power facilities

Solar power can be generated anywhere where there is sufficient sunlight. For it to be harnessed as a regular and reliable source of energy for an area, bright sunlight must predominate throughout the year. Such is the case in Morocco, where the interior of the country forms the north-western edge of the Sahara Desert. Morocco in fact receives about 3,000 hours of sunlight a year, which averages out as more than 8 hours of sunlight a day.

In a developing nation such as Morocco photovoltaic (PV) facilities offer a substitute to the costly large-scale grid infrastructure required by CSP, which is generally produced in conjunction with gas. PV solar panels can be installed easily on rooftops, for example, or in remote, underdeveloped areas.  But Morocco’s solar power investments are at present essentially focused on CSP. CSP utilises massive power plants that turn sunlight into heat that is used to turn turbines to create electricity. The Ouarzazate project in the south of the country is one of the country’s major CSP projects. The first of five planned solar plants is currently under construction, with its first phase of 160 MW contracted to Saudi company ACWA Power. Once completed (the deadline is 2019), the project should provide 18 percent of Morocco’s annual electricity production.

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About KPMG Africa

The KPMG Africa blog is where we keep you globally connected by providing you with locally relevant content to create great conversation.

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