Morocco to Make History with First-of-Its-Kind Solar Plant

Morocco is poised to make history soon — when the first phase of one of the world’s largest concentrated solar power plants starts generating electricity. When fully operational, it will produce enough energy for more than one million Moroccans, with possibly extra power to export to Europe.

Located on the edge of the Sahara desert, in an area famous for a picturesque landscape, the Noor-Ouarzazate power complex is putting Morocco on the map as a solar superpower.

It is Morocco’s first utility-scale solar energy complex and a critical step in the Moroccan Solar Energy Program, which aims to install 2 GW of solar power by 2020. The project underlines the country’s determination to reduce dependence on fossil fuels, turn to increased use of renewable energy, and move towards a low carbon development strategy.

Morocco is the largest energy importer in the Middle East, and depends heavily on foreign sources for over 97 percent of its energy. Harnessing energy from its abundant sunshine will free Morocco from the volatility of import costs, along with creating the potential for green energy exports to neighboring countries. The plant will reduce the country’s energy dependence by about 2 and half million tons of oil.

The three-plant Noor-Ouarzazate CSP complex expects to achieve over 500 megawatts (MW) installed capacity, ultimately supplying power to 1.1 million Moroccans by 2018. It is expected to reduce carbon emissions by 760,000 tons per year which could mean a reduction of 17.5 million tons of carbon emissions over 25 years.

Concentrated solar power (CSP), when combined with thermal storage, holds vast potential due to its ability to provide reliable power even when the sun is not shining.

Here’s how it works: hundreds of mirrors focus the sun’s energy to heat a transfer fluid that is used to produce steam that drives turbines that generate electricity.  The transfer fluid can also be used to heat molten salts stored in large storage tanks on site. The salt stays hot enough to generate steam even after the sun has gone down.

It is such a promising technology that the International Energy Agency estimates that up to 11 percent of the world’s electricity generation in 2050 could come from CSP.

But relatively high technology costs, when compared to fossil fuel alternatives, deter utilities, especially in emerging markets, from investing in the technology.

To prove its economic and technological viability, trailblazing CSP projects are needed across the world’s sun drenched places.

More projects using CSP are currently under construction or in the planning phase across the globe, from Chile and South Africa to India and China, but Morocco remains in the forefront of countries with a commitment to the technology.

The Moroccan Agency for Solar Energy, the government agency established to realize the country’s solar ambitions, secured over $3 billion needed for the Noor-Ouarzazate complex from the World Bank, the Climate Investment Funds’ Clean Technology Fund (CTF), the African Development Bank (AfDB), and European financing institutions.

For phase 1 of the Noor-Ouarzazate complex, the low-cost debt provided by the CTF ($97 million, managed by the World Bank) and other international financial institutions reduced Phase 1 project costs by about 20 percent compared to financing available from commercial banks. The World Bank is supporting phase 2 of the complex with financing of $400 million and $119 million from CTF.

The Noor-Ouarzazate complex is being built, and will be operated, as public-private partnership. The private partner, the International Company for Water and Power Projects (ACWA Power International), was selected through a competitive bidding process.

The international financial support for the complex will help reduce the strain on public finances by lowering the amount of subsidy that the Moroccan government required for the first phase, from $98 million to $31 million per year.

Initial efforts were supported by a $43 million GEF grant, complemented by significant additional government and AfDB financing. Efforts were designed to accelerate cost reduction and the commercial adoption of large-scale low-greenhouse-gas emitting generation technologies, and to test the viability of solar thermal technology with a view to encouraging its replication in Morocco and elsewhere.

The Climate Investment Funds’ CSP investments are intended to establish a record of performance for the technology, thereby lowering perceived risk and reducing future project costs for private sector CSP investors and developers.