Morocco has switched on what will be the world's largest concentrated solar power plant.
The new site near the city of Ouarzazate -- famous as a filming location for Hollywood blockbusters like "Lawrence of Arabia" and "Gladiator" -- could produce enough energy to power over one million homes by 2018 and reduce carbon emissions by an estimated 760,000 tons per year, according to the Climate Investment Funds (CIF) finance group.
Concentrated Solar Power, or CSP, holds vast potential due to its ability to provide reliable, large-scale power even when the sun is not shining. Morocco has just launched the first phase of the largest concentrated solar power (CSP) plant in the world, which includes funding from the Climate Investment Funds and the World Bank. When fully operational, the plant will produce enough energy for more than one million Moroccans.
Concentrated Solar Power is the greatest energy technology you have probably never heard of. While it may not be as widely known as other renewable energy sources, there’s no doubting its potential - the International Energy Agency estimates that up to 11 percent of the world’s electricity generation in 2050 could come from CSP.
And this week in Morocco, the King, His Majesty Mohammed VI, is officially opening the first phase of what will eventually be the largest CSP plant in the world – the same size as Morocco’s capital city Rabat. I congratulate Morocco for taking a leadership role that has placed it on the frontlines of a revolution that is bringing low-carbon development to emerging and developing economies worldwide
In collaboration with the World Bank and the African Development Bank, the CIF has already provided US$435 million into this three-phase Noor CSP complex in Morocco.
Once Noor I, Noor II and Noor III are up and running, the facility is projected to supply 1.1 million Moroccans with more than 500 megawatts of power by 2018, while reducing carbon emissions by 760,000 tons per year. The plant could eventually start exporting energy to the European market.
It will increase Morocco’s energy independence, create 200 jobs during the power plan operation and 1,600 jobs during power plant construction, and increase the installed capacity of solar power stations from 22 MW in 2013 to 372 MW in 2018.
And those who’ll gain the most will be the Moroccan population, Moroccan businesses and industries such as transport, agriculture and many others. Not only will they benefit from a better electricity supply, they’ll also benefit from cleaner electricity.
So what makes CSP different from regular solar power? Well, CSP uses mirrors 12-meters high to drive steam turbines or engines with energy from the sun to create electricity. So it can provide reliable, large-scale power even when the sun is not shining.
However, despite its promise CSP’s current global capacity falls well short of its potential. High technology costs and a limited number of CSP demonstration projects deter investors, especially in higher-risk emerging markets. So more successful projects like in Morocco, can show CSP is a viable investment.
In South Africa, in collaboration with IFC, CIF is providing about US$330 million to the country’s first public and private CSP plants, including the KaXu project, the first utility-scale CSP plant to operate in Sub-Saharan Africa. The construction phase has brought over 1,000 jobs to the Northern Cape, an impoverished province in South Africa with a high rate of youth unemployment. The plant is slated to power 80,000 South African households while mitigating around a quarter of a million tons of CO2 emissions per year, which is equivalent to the emissions of close to 53,000 cars a year.
These are just two examples of how concessional funding from the CIF can leverage other sources including from other multilateral development banks such as the World Bank and the IFC and bring down costs of investments in CSP.
According to the International Renewable Energy Agency (IRENA), CSP is among the technologies with greatest potential for cost reductions. The costs of solar tower CSP plants could come down significantly as early as 2020 if deployment accelerates, given the current low level of deployment but high potential of the technology.
Finding ways to sustainably meet the world’s energy demands is a global imperative and Morocco is showing how renewable energy can play a key role in helping emerging economies produce electricity, reduce greenhouse gas emissions and spur local private investments. And for CSP, the future may be as bright as the gleaming mirrors in the Moroccan desert.
Ouarzazate, February 4, 2016 - Today, Morocco launches the first phase of the largest concentrated solar power (CSP) plant in the world. When fully operational, the plant will produce enough energy for more than one million Moroccan households.
Inaugurated officially today by His Majesty Mohammed VI of Morocco, the solar plant underlines the country’s determination to reduce dependence on fossil fuels, use more renewable energy, and move towards low carbon development.
The three-plant Noor-Ouarzazate CSP complex called NOORo expects to achieve over 500 megawatts (MW) installed capacity, ultimately supplying power to 1.1 million Moroccans by 2018. It is estimated that the plant will reduce the country’s energy dependence by about 2 and half million tons of oil, while also lowering carbon emissions by 760,000 tons per year.
Concentrated solar power 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. This is especially true in the Middle East and North Africa, a region with abundant solar resources and high hopes of eventually helping to meet the E.U.’s demand for energy.
“With this bold step toward a clean energy future, Morocco is pioneering a greener development and developing a cutting edge solar technology,” said Marie Francoise Marie-Nelly, World Bank Country Director for the Maghreb, “the returns on this investment will be significant for the country and its people, by enhancing energy security, creating a cleaner environment, and encouraging new industries and job creation.”
Despite the potential of CSP, relatively high technology costs, when compared to fossil fuel alternatives, deter utilities from investing. Concessional and public financing were key to lift this project off the ground. The Moroccan Agency for Solar Energy, the government agency focused on the country’s solar ambitions, secured over $3 billion needed for the Noor-Ouarzazate complex from the African Development Bank (AfDB), the Climate Investment Funds (CIF), European financing institutions and the World Bank.
“This launch shows that the low-cost, long-term financing provided by the CIF can serve as the spark that attracts the public and private investments needed to build massive CSP production facilities at an attractive cost for countries interested in developing solar energy,” said Mafalda Duarte, Head of the Climate Investment Funds.
Trailblazing projects on the African continent, like the Noor solar plant, are proving the performance of CSP. As well as the environmental benefits, the plant results in new, local jobs, and can lead to a high-performing sustainable energy economic sector for Morocco.
Yacine Fal, AfDB resident representative in Morocco, said: “Noor solar complex is part of the innovative operations of AfDB in the energy sector in terms of financing and technology. It stands to serve as an example for Africa and the world about how to create effective pathways to greener and more inclusive economies through renewable energy”.
The Noor Concentrated Solar Power (CSP) complex is Morocco’s first utility-scale solar energy complex and serves as a critical step of the Moroccan Solar Energy Program. It will be operated as a public-private partnership (PPP.) The private partner is the International Company for Water and Power Projects.
The project seeks to contribute to the commercial viability of CSP and its potential throughout MENA (Middle East and North Africa). Operating with an installed capacity of 160 megawatts (MW), the first phase expects 240,000 tons of CO₂ emissions to be avoided per annum. By 2018, the three-phase project will be the largest of its kind in the world with over 500 MW of installed capacity, and will produce enough clean power to meet the needs of 1.1 million Moroccans.
The plant will reduce carbon emissions by 760,000 tons per year, which could result in an estimated reduction of over 17.5 million tons of carbon emissions over 25 years.
The share of renewable energy in total electricity generation is expected to increase from 4,345 GWh (13%) in 2013 to a target of 5,501 GWh (42%) by 2020.
Energy dependency should be reduced through additional electricity production from the 160 MW Noor I and the 350 MW Noor II and III in 2018.
Reaching Morocco’s true energy efficiency potential will prospectively pave the way for economic growth and ultimately generate employment.
The project site is situated 10 km from Ouarzazate town along National Highway No. 10. The surrounding rural area accommodates a population of approximately 583,000 inhabitants and has a poverty rate of almost 23%. The project beneficiaries will be the Moroccan population, Moroccan businesses, and all productive sectors (industries, transport, agriculture, etc.), which benefit not only from better electricity supply but also from cleaner electricity.
THE CLIMATE INVESTMENT FUNDS’ CONTRIBUTION
The CIF, AfDB and World Bank have jointly supported the 500+MW Noor solar complex, which has been championed by Morocco’s Agency for Solar Energy (MASEN). The CIF channeled $435 million towards the CSP plant, alongside the investment of about $700 million by the AfDB and World Bank, contributing to the $3+ billion total from foreign and multilateral investors. Given the scale of public finance required to subsidize this multi-billion-dollar, three-phase complex, the support of both MDBs and the CIF was critical. Independent analysis concludes that the low-cost debt is already driving down the cost of CSP in Morocco by 25% for Noor I and an additional 10% for Noor II and III (achieved in 2015), thus reducing the government subsidy required to bridge the affordability gap for CSP.
MOROCCO IN ENERGY CONTEXT
Morocco is extremely dependent on energy imports and fossil fuels, which currently provide over 97% of its energy. The country has prioritized the development of renewable energy to achieve its economic and environmental objectives of energy security and environmental sustainability.
Morocco will host the next COP (COP22) in November 2016. The country's ambitious low carbon growth objectives (42% of installed capacity will be covered by renewables by 2020) and progress in adaptation actions to manage its vulnerability (especially in agriculture) contributed to the Parties’ decision to allow Morocco to host the COP.
ABOUT THE CLIMATE INVESTMENT FUNDS (CIF)
The $8.1 billion Climate Investment Funds (CIF) is providing 72 developing countries with urgently needed resources to mitigate and manage the challenges of climate change and reduce their greenhouse gas emissions. Since 2008, CIF has been leading efforts to empower transformations in energy, transport, and forestry sectors and CIF’s funding has leveraged more than $55 billion from other sources.
To tap Turkey’s significant geothermal energy potential the European Bank for Reconstruction and Development (EBRD) and the Clean Technology Fund (CTF) are launching a programme to support exploratory drilling investments, the partners announced at the 35th Energy Efficiency Forum in Istanbul today.
The European Bank for Reconstruction and Development (EBRD) is continuing its programme of modernising the infrastructure of crucial public utilities in Kazakhstan in partnership with the central government and local authorities.
The USD 5.3 billion Clean Technology Fund (CTF) aims to scale-up financing to 15 middle income countries, one regional program in the Middle East and North Africa and a Dedicated Private Sector Program (DPSP), that extends to other countries and region, in order to contribute to the demonstration, deployment and transfer of low carbon technologies with a significant potential for long-term greenhouse gas emissions (GHG) reductions. It provides concessional financing, channeled through six partner multilateral development banks (MDB), to large-scale, country-led projects/ programs in renewable energy, energy efficiency, and transport.
The CTF recently released its latest Results Report, which is based on 55 MDB-approved projects/ programs reporting over a one-year period. Below are some of the highlights from the report. It should be noted that, depending on the stage of implementation, not all indicators from a project may be reporting results- for example, a project that just met financial closure might only be reporting on the co-financing indicator, compared to another project which is under operation and hence, reporting GHG emission reductions. However, targets across all indicators are included when comparing results.
*m-PPD: Million passengers per day UPON IMPLEMENTATION
Greenhouse gas (GHG) reductions (tCO2e): Eighteen out of 55 projects/ programs are under operation and expected to produce over 5.5 million tCO2e in emission reductions annually, while the remaining are at different stages of implementation and will report emissions reductions once they become operational. Cumulatively, total GHG reductions supported by CTF projects/ programs reporting results so far is 20 million tCO2e, which is roughly equivalent to annual greenhouse gas emissions from over 4.5 million passenger vehicles, or annual CO2 emissions from six coal-fired power plants. The volume of GHG reductions reported is at similar levels than what was reported during last period with a slight decrease, mainly due to the fact that two projects/ programs that reported results in 2013 (over 0.25 mtCO2e per year in total) did not report this year due to lack of available data.
Co-financing (USD million): Total co-financing mobilized during this period was over USD 4 billion. For projects/ programs reporting results, around one-third of the expected co-financing has been reported on a cumulative basis, of which, around one-third has come from the private sector, around one-third from the MDBs, and over one-third from government, bilateral and other sources combined. In Africa, over 50 percent of the co-financing has come from bilateral sources, while over 40 percent from the private sector in Asia, over two-thirds from the MDBs in Europe and Central Asia and over one-third from the private sector Latin America & the Caribbean regions. Results for the current year were higher than last year largely on account of two projects in Mexico and Morocco that mobilized over half of the total co-financing for this period, mainly from the bilateral, government and the private sector sources.
Installed capacity (Megawatt, MW): Ten out of 55 projects/ programs are under operation and resulting in 2,739 MW, or around one-fifth of the renewable energy capacity expected to be installed on a cumulative basis. This is more than roughly the total installed capacity of electricity from all sources in Iceland. The largest share of renewables is in Europe and Central Asia, followed by Asia and Latin America and the Caribbean regions. Projects in Africa are at early stages of development and hence, not reporting results yet. Wind continues to be one of the most installed technologies this year as well with over 425 MW in capacity being installed during the period, almost 50 percent more than previous year.
Energy savings (Gigawatt hours, GWh): Ten out of 55 projects/ programs are under operation and resulting in energy savings of over 3,900 GWh per year. Over 80 percent of energy efficiency projects are in Europe and Central Asia, with two projects in Turkey being responsible for 45 percent of the energy savings reported in the current year. The amount of energy savings reported were over 10% higher compared to that reported during the previous period, despite not including one project that reported around 475 GWh in savings last time, but did not report due to lack of available data.
Additional passengers per day (million): The transport projects are at early stages of development and are yet to report results.
In addition to core indicators, at least one indicator for a development co-benefit is expected to be identified and integrated into each project/program financed under the CTF with reporting done when appropriate, preferably annually.
Economic co-benefits: CTF-funded projects reporting results so far have facilitated growth in local industries like solar, wind, among others. Through demonstration effect, these projects address risk perception around new technologies, like CSP, or efficient equipment, such as lighting and appliances, and in the process, facilitate private sector participation thereby increasing competitiveness and lowering costs. Indirectly, projects result in both short and long-term job creation. Over 25,000 jobs are expected to be created during different stages of project development, from short-term jobs during construction phase to more long-term jobs during the implementation phase. With improved affordability due to lower costs and increased income levels from new jobs, these projects help improve local economic conditions.
Environmental co-benefits: Due to increased use of renewable energy sources and more efficient equipment that reduce further dependence on fossil fuel, CTF-funded projects result in avoided local pollution, leading to public health benefits associated with improved living conditions.
Social development co-benefits: CTF funding has also been used by project developers toward building local capacity since, in a number of cases, local manufacturing, workers, or local financial intermediaries have not been exposed to certain risks or a technologies previously. Renewable energy projects, such as the geothermal program in Indonesia, are expected to expand access through over 950,000 new connections, while one of the critical benefits of sustainable transport projects is reduction in traffic accidents leading to savings in public health expenditure.