SET Roadmap

EU and Africa sign joint declaration for sustainable energy trade

In November 2016, four European countries – Germany, France, Spain and Portugal – and Morocco in north Africa signed a joint declaration to establish a roadmap for facilitating sustainable renewable electricity trade between the European internal energy market and northern Africa. The Sustainable Energy Trade (SET) roadmap under the European Commission’s (EU) Climate Action and Energy initiative was signed at the Conference of Parties (COP22) climate summit. The roadmap to promote cross-continent trade in renewable energy is in line with the Paris agreement signed recently by the five countries. The Paris agreement, which came into effect in November 2016, provides member countries of the United Nations Framework Convention on Climate Change with a framework to set nationally determined contributions for greenhouse emission reductions.

A significant amount of renewable-based electricity generation capacity is planned in the five signatory countries. The four European countries are implementing national support programmes to achieve the EU binding target of increasing the share of renewable energy to 27 per cent of energy consumption in the EU as a whole by 2030. Alongside, Morocco is implementing the Moroccan Renewable Energy Plan, led by the Moroccan Agency for Solar Energy, with an ambitious target of 52 per cent by 2030. Recently, the country put into operation the 160 MW Noor 1 solar power station, which is the first phase of the 580 MW Ouarzazate solar power plant, expected to be the world’s largest solar plant once it is commissioned in 2018. If Morocco is able to achieve its ambitious renewable energy targets, the excess energy will be exported north to Europe. However, in order to ensure renewable energy trade between the continents, a high capacity interconnection system must be in place.

The Moroccan and the EU electricity grids are already partially interconnected through two cross-border links with Spain. The interconnection between Morocco and the Iberian peninsula is expected to be further strengthened in the coming years, as there are plans to set up a new interconnection between Morocco and Portugal. Also, Morocco and Spain are undertaking a feasibility study related to enhancing the capacity of the existing interconnections. The implementation of the ambitious Mediterranean Electricity Ring or MedRing project, which aims at establishing a high capacity transmission corridor around the Mediterranean Sea to enable the transfer of renewable power from non-European countries to European countries, is expected to further expand interconnectivity between Europe and Africa.

A strong interconnected Europe-Africa grid network will facilitate the integration of increasing renewable electricity on both sides. It will also help address the challenge of the intermittent nature of renewable energy as interconnecting electricity systems allow surplus renewable power produced in one country to be exported to a nearby country with lower production levels, smoothing out fluctuating supply and demand. Morocco is currently benefiting from support by various donor sources including the EU Neighbourhood Investment Facility and the Clean Technology Fund (of which France, Germany, Spain and Morocco are members). The $9 billion Ouarzazate solar power plant has received funding from several financial institutions such as climate investment funds, German investment bank KfW, the European Investment Bank and the World Bank. Going forward, the implementation of Morocco’s renewable energy plan and its energy integration with Europe will provide substantial mutually beneficial investment opportunities for the five signatories.

The SET roadmap aims to identify barriers to trade in renewable electricity among the five signatory countries and suggest ways to overcome them. At the outset of the SET roadmap, prospects for the integration of electricity markets and trade of renewable energy between Morocco and the European internal energy market will be reviewed on the basis of multiple factors such as economic, financial, legal, regulatory, security, technical, environmental and social. The focus will be on plugging the gaps and on proposing solutions to identified challenges and bottlenecks.

On the basis of the above-mentioned exercise, the roadmap will then be developed into an implementable agreement, taking into account each country’s constraints, conditions, milestones and planning, to achieve effective electricity trade between the European internal energy market and Morocco, thus allowing for increased integration of renewable energy. The SET roadmap is expected to culminate in an implementable agreement among the signatories before COP23, which is slated to take place in November 2017.

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