VZCZCXYZ0000
RR RUEHWEB

DE RUEHRB #2205/01 3351654
ZNR UUUUU ZZH
R 011654Z DEC 06
FM AMEMBASSY RABAT
TO RUEHC/SECSTATE WASHDC 5324
INFO RUEHAS/AMEMBASSY ALGIERS 4219
RUEHMD/AMEMBASSY MADRID 5614
RUEHFR/AMEMBASSY PARIS 4450
RUEHTU/AMEMBASSY TUNIS 9129
RUEHCL/AMCONSUL CASABLANCA 2427
RUCPDOC/USDOC WASHDC
RHEBAAA/USDOE WASHDC

UNCLAS RABAT 002205 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR NEA/MAG AND EB/ESC 
USDOC FOR ITA/MAC DAVID ROTH AND AARON BRICKMAN 
USDOE FOR GINA ERICKSON AND YOUNES MASIKY 
STATE PASS USAID FOR JENNIFER RAGLAND 
 
E.O. 12958: N/A 
TAGS: ENRG ECON SENV MO
SUBJECT: NATURAL GAS AND RENEWABLE ENERGY AT CENTER OF 
MOROCCAN ENERGY POLICY 
 
REF: A. RABAT 732 
     ¶B. RABAT 151 
 
¶1. (SBU) Summary: Government and private industry came 
together last month for a one-day conference on Moroccan 
energy policy, stressing the need for Morocco to reinforce 
its energy sector and render it more competitive. 
Diversification of supply was the key message articulated by 
Prime Minister Jettou and other government participants. 
They outlined plans to expand the share of natural gas from 3 
to 20 percent of energy production, while also expanding the 
share of renewable energy to 10 percent.  Other priorities 
include assuring regularity of supply, generalizing access to 
energy, limiting consumption, and ensuring protection of the 
environment.  Among the steps announced by the government was 
raising the limit firms are allowed to produce for themselves 
from 10 MW to 50 MW, with authorization for transport of any 
surplus to other sites on the transmission grid of the 
National Electricity Office (ONE).  End Summary. 
 
¶2. (SBU) The October 30 Conference at the Mohammed VI 
Conference Center on the coast in Skhirat brought wide 
participation by government and private sector participants, 
as well as international experts, including the head of the 
International Energy Agency.  In his opening remarks, Prime 
Minister Jettou stressed the critical conjuncture in which 
the energy sector finds itself, given the negative impact 
rising prices have had on non-producers like Morocco, which 
depends on imports for 95 percent of its energy needs.  The 
government's strategy, he said, is centered on assuring a 
regular energy supply, which he argued can best be achieved 
by diversifying sources of supply.  Important but secondary 
goals include generalizing access to energy through 
continuation of the government's rural electrification 
program, limiting consumption, protecting the environment, 
and assuring the security of the nation's energy grid. 
 
¶3. (SBU) Natural gas plays a central role in the plans 
outlined by the government.  Currently only 3 percent of 
Morocco's energy needs are filled by natural gas.  The 
government hopes to raise that level to 20 percent by 2012. 
To help dynamize the sector, the government envisages a large 
LNG terminal, with a capacity of three billion cubic meters 
of natural gas per year.  The project, initated by the 
Moroccan Akwa group, could be launched in 2007.  Mohammed El 
Hafidi, Director of Electricity and Renewable Energy at the 
Ministry of Energy, reminded us in a November 13 meeting, 
however, that feasibility studies are not yet complete, and 
that the project will proceed only if they are favorable. 
Current estimates are that the planned terminal would require 
an investment of 1.2 billion USD, and could be in operation 
by 2010 or 2011.  Akwa has indicated that should plans 
proceed, it will seek foreign partners to help it develop the 
project.  Not yet decided, however, is where the terminal 
will be located.  Candidates include Tangiers, Mohammedia and 
Jorf Lasfar.  At the conference, Akwa participants at the 
conference also stressed that the success of the project 
requires the "fiscal neutrality of the state."  Morocco is 
also planning to open a 200 megawatt natural gas powered 
plant in 2009 that will use gas that Morocco receives from 
Algeria as a royalty for a pipeline that traverses Moroccan 
territory on its way to Spain). 
 
¶4. (SBU) El Hafidi also noted that the Ministry is working to 
complete the law and accompanying decrees and regulations 
that will fully liberalize the electricity sector in coming 
years.  Other departments are now commenting on the text, he 
said, and it should soon be presented to the government for 
its approval and transmittal to parliament.  The goal, he 
said, is to "align Moroccan policy with that in Europe," so 
Moroccan manufacturers face a similar cost structure. 
Already, he noted Moroccan electricity markets are integrated 
with those elsewhere in the Maghreb and with Europe, given 
interconnections that allow transfer of up to 700 MW to both 
Spain and Algeria. 
 
¶5. (SBU) In another liberalizing move, the amount of energy 
companies can produce has been raised from 10 to 50 MW, and 
they are able to move it along the transmission grid to other 
 
sites or sell it to ONE.  When liberalization is complete, 
they will be free to dispose of it as they wish.  (Note: This 
is a key shift, as with the earlier restriction, it was not 
profitable for companies to operate an independent generator. 
 End Note.) 
 
¶5. (SBU) Renewable energy plays a major role in the 
government's thinking, and the Ministry of Energy is 
preparing a separate law on the subject.  Morocco's goal is 
to use renewable sources for 20 percent of its electricity-- 
or 10 percent of its total energy needs.  In a November 15 
meeting, Zohra Ettaik, Chief of Renewable Energies at the 
Ministry of Energies, told Emboff and visiting DOE PDAS for 
Energy Efficiency and Renewable Energy John Mizroch that the 
GOM also sees a bright future for renewable energy, given its 
wind energy resources on the Atlantic and Mediterrean coasts 
and in the Atlas mountain range.  Currently, ONE has a 54 
megawatt wind farm in Tetouan.  In 2008, it plans to open two 
additional wind projects, a 60 megawatt plant in Essaouira 
and a 140 megawatt plant near Tangier, and in 2009 it hopes 
to complete a 30 megawatt plant in Oujda.  In addition, two 
other plants (100 to 200 megawatts each) are also being 
planned for Taza in the Middle Atlas and Tan Tan in the 
southern coastal plain.  By 2012, Morocco hopes to have 250 
wind projects and produce 1,000 megawatts of electricity from 
windpower. 
 
¶6. (SBU) Due to the high cost of producuing electricity from 
photovoltaic cells, Morocco only uses this technique for 
approximately 30,000 rural homes where it is cost prohibitive 
to connect them to the nation's electrical grid.  However, 
Morocco also currently has 140,000 square meters of solar 
panels to produce hot water and plans to increase this by 
40,000 square meters per year until it eventually reaches 
400,000 square meters.  Finally the Ministry of Interior has 
a small program to capture methane gas.  Ettaik added that 
her office had recently signed an accord with eight other GOM 
ministries (Industry, Housing, Finance, Health, Interior, 
Education, Tourism, and Social Development) to increase 
energy efficiency in government buildings.  The Ministry of 
Agriculture signed a separate agreement related to the 
pumping of water. 
 
¶7. (SBU) Comment: Morocco's energy demand is growing by a 
steady 6-7 percent each year, and meeting that demand with 
affordable energy is a key government priority.  Beyond its 
natural gas and renewable energy plans, Morocco is also 
moving forward with other options, including new generation 
coal-fired plants (a tender for two 660 MW plants was 
recently issued) and nuclear energy (ref B).  Its success in 
ensuring the availability of affordable energy will play a 
key role in facilitating sustainable economic growth.  End 
Comment. 
 
 
****************************************** 
Visit Embassy Rabat's Classified Website; 
http://www.state.sgov.gov/p/nea/rabat 
****************************************** 
 
Riley