1. The New Development Model (NMD, 2021-2035) of Morocco represents the culmination of a major and historic national exercise for the country. Following the High Instructions of His Majesty King Mohammed VI, the Special Commission for the Development Model (CSMD) developed the NMD in 2021 after conducting two years of in-depth consultations.
2. The New Development Model places significant importance on the issue of energy transition in the future of the kingdom, calling for Morocco to be a regional leader in green and low-carbon energy by 2035. The NMD considers that reducing energy costs can be achieved through a reform of the energy sector and a transition to low-carbon renewable energies. To succeed in this mission, it proposes to introduce sectoral reforms following the following strategic orientations:
3. 1) “Establish a new institutional architecture around a strong, independent, and credible regulator for the entire sector.”
4. 2) “Implement a transparent, dynamic, and competitive pricing policy, based on a clear separation of the roles of the actors.”
5. 3) “Restructure ONEE to enable it to fulfill its strategic function of modernizing the electricity transmission network and supporting the reform of the sector.”
6. 4) “Develop decentralized, efficient, and smart production, to provide access to competitive electricity in the territories.”
7. 5) “Remove the cap on access to natural gas for industry and for the country’s development.”
8. 6) “Establish Morocco as a regional platform in energy exchanges, R&D, and local content.”
9. Three years later, this report prepared by the IMAL Initiative for Climate and Development aims to provide an independent assessment of the progress made in implementing each of these strategic orientations. This assessment has been developed to enrich the national debate and support responsible actors, in order to accelerate the Kingdom’s achievement of its strategic goal of becoming a global leader in green energy. This evaluation and forward-looking reflection work could be conducted periodically to ensure continuous monitoring of the sector’s achievements in light of the NMD recommendations.
10. This independent assessment suggests the following general messages and conclusions:
11. ▪ Evolution of the national energy transition in the face of accumulated delays. Morocco has historically played a leading role in Africa and the region in the energy transition, with notable advancements and recent accelerations supported by significant ongoing efforts. However, an analysis of the current situation highlights some gaps between the high ambitions set by His Majesty the King and the achievements made within the framework of the six energy orientations of the NMD. Although awareness of the issues is increasing and several structuring initiatives are underway, persistent challenges continue to slow the optimal deployment of renewable energies. These challenges, while surmountable, require a concerted approach and strategic adjustments to ensure a smoother and more effective implementation of the energy transition.
12. ▪ Economic risks of a too-slow energy transition. If the energy transition is not accelerated as planned in the NMD, it could lead to harmful consequences that would affect not only the energy sector but also the entire economy of the country. The decisions made and measures taken within the framework of the energy transition will have profound impacts on the competitiveness, growth, and economic resilience of our country. On one hand, prolonged dependence on fossil fuel imports exerts a deleterious effect on Morocco’s fiscal resources, its current account, and its foreign currency reserves, while autonomous production of solar and wind energy, with low operating costs, would offer a more sustainable alternative. On the other hand, delays in reducing the carbon intensity of the electricity grid could incur additional costs and impact Moroccan industrial competitiveness, at a time when the European Union and other jurisdictions are instituting mechanisms to penalize high-carbon products.
13. ▪ A paradigm shift is necessary for an accelerated and successful implementation of the energy transition. To fully realize the vision of His Majesty King Mohammed VI and consolidate Morocco’s leadership in green energy, a paradigm shift is necessary, involving a renewed approach that combines agility, innovation, and strong commitment from all actors. This includes:
14. 1. Elevating the issue by addressing related discussions from a political rather than a technical angle: Currently, the issue of energy transition and the massive deployment of renewable energies are primarily approached from a technical perspective and often viewed as an engineering challenge. However, it is essential to also adopt a strategic approach to grasp its full scope and ensure effective implementation of the ambitions.
15. 2. Adopting a problem-solving oriented approach. Rather than limiting itself to identifying obstacles, it is essential to establish a proactive dynamic focused on their resolution. This involves defining clear mandates for key actors in the energy transition, explicitly specifying the expected actions from each to ensure effective and coordinated implementation.
16. 3. Enhanced transparency. Knowledge and information access imbalances pose major challenges at every stage of the decision-making process, especially when historical institutional actors adopt a conservative or even alarmist approach. A better understanding of technical issues would allow for more informed and relevant decisions. In this context, an international partnership framework, particularly on strengthening and adapting transport and distribution networks, would play a key role in fostering expertise sharing and better coordination of actions on a global scale.
17. 4. A flexible and adjustable approach. Decision-makers and leaders must learn to engage in their energy transition without necessarily having the complete predefined solution. This “transition mentality” involves a flexible approach, open to necessary adjustments in response to the constantly evolving energy landscape.
18. 5. A focus on the ultimate goal of the transition. The long-term vision of the country and the imperative of urgency must prevail. The political and regulatory approach must align with this ambition, taking into account the needs of all sectors and value chains. In other words, it must not sacrifice ambition to comply with an inadequate regulatory framework or an unprepared electricity grid.
19. Finally, this evaluation highlights three agendas arising from the NMD, each encompassing different strategic orientations as action priorities for the sector. These areas are considered by IMAL as aspects requiring intensified efforts over the next five years:
20. 1. Unlocking the potential of decentralized energy in Morocco. Decentralized energy is one of the recurring objectives in the NMD, clearly highlighted by the Commission for its ability to contribute “to the reliability, resilience, balance, and competitiveness of the energy network.” Decentralized production infrastructures could benefit from the deployment of smart systems for more effective integration of these resources into distribution networks. Morocco has enormous potential for decentralized energy, particularly in the field of rooftop photovoltaic energy. This energy source can generate significant jobs and strengthen Morocco’s energy independence, thus reducing its dependence on fossil fuel imports. However, currently, access to the grid for such installations remains limited due to restrictions imposed by distribution network operators. It is therefore essential to support these operators in overcoming perceived obstacles and gradually adapting the grid accordingly, similar to successful initiatives implemented in other partner countries.
21. 2. Reviewing long-term purchase contracts, particularly for coal stations. The NMD emphasizes the need to reassess long-term energy purchase contracts, considered non-competitive for ONEE. It also envisions the possibility of amicable or judicial termination, allowing for the settlement of their excess costs in one go rather than over their entire duration, enabling ONEE to restructure on sound bases. This approach is particularly important for contracts concluded with coal-fired power plants, given the risk they potentially pose to the Moroccan economy and its industrial competitiveness. As previously mentioned, this is due to their high carbon footprint, which weighs on the carbon intensity of electricity production in Morocco. While the share of coal in the energy mix is set to decline by 2030, primarily due to the rise of renewable energies, supported by increased installed capacities in solar, wind, and storage, as well as national decarbonization and energy mix diversification goals, coal-fired assets will nonetheless remain present in the national energy landscape. It is therefore crucial to engage in a thorough reflection on their future, particularly regarding the management of energy purchase contracts. This approach must integrate economic, environmental, and social dimensions while exploring opportunities offered by international climate financing. As observed in other developing countries through “Just Energy Transition Partnership” initiatives, this financing could facilitate a gradual and equitable transition, ensuring adequate compensation for the concerned operators while accelerating the deployment of clean energies.
22. 3. Making Morocco a regional leader as a platform for green electricity exchange. The NMD aims to position Morocco as a strategic energy exchange point between the Maghreb and Europe, promoting the gradual establishment of an electricity market in the Maghreb and achieving the connection of the Moroccan electricity grid to the West African grid. This latter measure is considered a major strategic initiative that would stimulate regional development, particularly through the “West African Power Pool” (WAPP). Realizing this vision will require several key steps, including developing regional interconnections, harmonizing the national electricity market with the European market; as well as successfully implementing other orientations of the NMD. This includes the reform and decarbonization of the electricity sector and investing in the flexibility of the national grid and adopting effective regulations to unlock the potential of renewable production in Morocco.