Round Two: CSP Today examines the latest developments in Morocco’s solar plan.
By Alison Ebbage
The Moroccan solar industry is in a positive place after successful completion of the tender process for the Ouarzazate solar complex. The plant is the first of five phases to be commissioned by Moroccan Agency for Solar Energy (MASEN) and the aim is to bring some 2000 MW of solar energy into Morocco by 2020.
The Ouarzazate Power Station Project 1 will be a 120 to 160 MW parabolic trough plant with three hours of thermal storage. The entire project, in five phases, will be a 500 MW generation plant and become one of the largest concentrated solar power plants in the world.
But what next for the industry? Nabil Saimi, director of international cooperation at MASEN says the next tendering process will be announced before the end of the year and that, as previously, there will be a prequalification stage with a winning bidder announced before the end of 2013. “We are currently in the preparation stage but it is important to remember that we have a hard deadline to be operational by the end of 2015,” he says.
Saimi says that the upcoming invitation to tender will be for a plant using tower technology which offers more storage capacity; something that would hold particular appeal in Morocco. He says that parabolic troughs, used in the first phase, will also be included and in later phases he expects to see photovoltaic(PV) included too.
Cédric Philibert, analyst at the International Energy Agency, (IEA) explains: “Morocco is quite different from say California in that its peak demand is not for air con in the mid afternoon, rather for lighting after sunset. Accordingly the country’s needs are for solar power with good storage capacity – we are looking at between five and seven hours worth.”
Tower technology is also cheaper than using troughs, thinks Philibert. He estimates that using towers would be some 15% less in terms of construction and maintenance costs. And PV installations are cheaper again - something that bodes well for attracting future funding.
Indeed the Moroccan solar industry is particularly attractive at the moment. In terms of both geopolitical stability and infrastructure issues it is a safer bet than some of its neighbours.
The government has worked hard to provide the infrastructure and funding to ensure the renewable industry becomes successful – not only in terms of energy provision but also in terms of a strong economic sector in its own right.
The Ouarzazate site is part of a more ambitious plan. Morocco imports around 97% of its energy needs. The national energy strategy is to increase the contribution of renewable energies to 42% by 2020, equally distributed among hydropower, wind-power and solar-power.
The energy strategy, launched in 2009, included subsidising a power purchase agreement between the National Electricity Authority, MASEN and the private developers. In addition the strategy includes the right, for developers, to build an independent network to export energy, should the existing national infrastructure prove to be insufficient to meet future demand. The existing grid line into Europe has a 1.4GW capability.
But even with the strong support of national government, funding may well be the thorn in the side of this developing industry.
The Ouarzazateproject is co-financed by the Clean Technology Fund, the World Bank, the French Development Agency (AFD), the European Investment Bank (EIB), the German Cooperation (KfW) and, potentially, other commercial banks and private partners. In total the project needs around $1.25 billion.
But will these organisations will be able to contribute as heavily to future funding rounds and if not will private sources of funding will be willing, or able, to step in and fill the gap?
Certainly one development that may boost funding is the situation in Europe. Some countries, notably Spain, have had subsidies for renewables cut due to harsh macro-economic conditions. As a consequence potential investors, not just in Spain but also in Germany, Italy and the United Kingdom are increasingly open to seeking opportunities outside Europe.
“The first phase actually raised more finance than was needed so we can use that in future phases. But as important is the need to look to the private sector and secure the very best funding terms and conditions. This will bring the cost of funding down as far as is possible,” says Saimi.
By this he means bringing down risk premiums on funding and making CSP more bankable and attractive to both banks and private equity investors.
“CSP technology is still in its infancy. It generates just 1 or 2GW worldwide compared to PV which generates some 4GW,” he says. To bring the cost of finance down not only does there need to be the right infrastructure in place nationally in Morocco but “there needs to a proven economy of scale on a global level to thus increase acceptability comfort levels for investors worldwide,” he says.
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