Building domestic capabilities in renewable energy: A case study of Morocco

The wide availability of renewable energy resources in the MENA region (i.e. solar irradiation and wind speed) is at the core of several large-scale European initiatives to generate clean energy from the southern Mediterranean countries and import part of it to Europe. These initiatives draw on the argument that, with large investments and technology transfer efforts, MENA countries could potentially produce enough energy from renewable sources to satisfy their fast increasing energy demand as well as that of Europe, hence contributing to achieving CO2 emission reduction targets and reducing dependency on fossil-fuels in both the north and south of the Mediterranean. Yet, the development challenges that the MENA region is facing in the aftermath of Arab Spring are enormous, primarily in terms of unemployment and social equality. In addition, most countries have relied for decades on a social contract aimed to maintain social stability through heavy state intervention and distribution of rents, at the expense of social equality and private sector competitiveness. To address these problems, development strategies need to have a strong social policy and job creation component. 

Within the MENA region Morocco is a particularly interesting case to examine the potential for building domestic capabilities for renewables. The solar and wind energy resource is one of the highest worldwide. Morroco imports more than 95% of the fuels for energy generation, so the pressures for finding alternative energy sources are high. The already existing inter-connection line with Spain provides an entry point for cross-Mediterranean energy projects. Morocco´s private sector has achieved higher competitiveness as compared to other countries in North Africa due to its export-oriented private sector development strategy. However, currently renewables represent only a limited share in the energy mix. Hence, it appears that untapped potential exists that could be used to enhance economic development benefits.
To offer a multi-layered perspective on the development of the renewable energy sector in Morocco, this study aimed to address the following research questions: 

(1) Which parts of the wind and solar value chains offer the best prospects for generating local benefits in terms of private sector development and local capabilities?
(2) What institutional and political obstacles need to be overcome to reap the internal benefits?
(3) What policy recommendations could be proposed for national policy-makers and for international cooperation agencies to support this development process?

The dynamic environment around renewable energy development in Morocco offers a potential for different cooperation partners. IRESEN and MASEN are core organizations driving these developments, coordinating policy and research in this sector. German development cooperation, primarily GIZ and KfW, are actively involved locally, and Ministries such as BMU and BMZ are funding several projects in the country. Interest in this topic is high among the Moroccan government, its private sector and the German development cooperation actors. This study will also allow us to build on earlier research conducted in Egypt in 2011-2012 and to draw conclusions at comparative level, relevant for the wider MENA region and to German development cooperation.