Morocco and Mauritania ink energy cooperation deal

From the newsletter
Morocco and Mauritania have committed to deepening their electricity and renewable energy collaboration through a newly signed memorandum of understanding. This reflects a growing trend among African countries trying to trade in electricity, although less than 3% of power is internationally traded. 

• Morocco has been investing heavily in renewable energy generation and targets to achieve a 52% share of renewables by 2030. The deserts and the coastline are its go-to sources of wind and solar energy. Deserts' proximity to neighbouring countries like Algeria and Mauritania makes it even easier to build cross-border power transmission lines.  

• Morocco recently invested over $54 million to upgrade its power grid by connecting a new solar plant to the national grid through a 400 kV line and targets to export excess to neighbouring countries.

More details

• In 2024, Morocco's financial commitment to its electricity grid increased fivefold in its annual budget, rising from $99 million to $498 million. This is in addition to investments in mega renewable energy projects, such as wind and solar, and the country plans to invest $2.3 billion in the green energy sector by 2027.

• Morocco has been focusing on renewable energy investments, and in 2023, there was a 22.7% rise in renewable energy generation compared to 2022. Morocco belongs to the West African Power Pool (WAPP), which includes 14 West African countries that have joined forces to create a competitive and reliable regional electricity market through grid interconnection.

• There is a growing demand for international electricity trading, with countries seeking cheap and reliable electricity. Currently, there are no restrictions on the source of electricity generation. However, countries with hydropower, like Ethiopia and Uganda, have proven to supply electricity at cheaper rates.

• Interconnecting power grids can be challenging, but the economic advantages are too significant to be ignored. Through interconnection, countries won't need to have reserve power plants, which are often only utilised during peak demand or outages. This way the cost of electricity can be reduced. Those with excess can sell to those without and countries can choose the cheapest alternative in the market.

Our take

• International electricity trading, though still at a low level, is showing promise with recent developments. As renewable energy is integrated into many grids, sourcing electricity from other countries to ensure energy security becomes critical. Different countries experience different climatic conditions, which affect renewable energy generation. Sourcing from diverse locations can help address the intermittency of renewables.

• Morocco's export market is not limited to African countries. It has the potential to generate gigawatt-scale renewable energy and even export to Europe, which is less than 20 km away across the sea. The European market's demand could be even greater due to industrial use.

• Energy companies should target the generation of electricity from the abundant wind and solar resources available on Morocco's coastline and partner to export electricity to high-demand areas.