Morocco-EU Free Trade Benefits Renewable Energy
5 November 2013
Read by 1509 persons
An impact study on renewable energy shows that opening borders between Europe and Morocco will benefit the Moroccan clean energy sector.
According to the impact study conducted by Ecorys, the Deep and Comprehensive Free Trade Agreements (DCFTA), by promoting the development of the sector, should reduce Morocco's energy dependence, reduce energy price fluctuations and thus promote social stability, reduce pollution and create new jobs.
This impact study is being conducted before the DCFTA currently under discussion.
Exportation: Possible with Massive Investment
Currently, renewable energies (hydro and wind) represent 4% of energy consumption.
Morocco is a net importer of electricity. Its main trading partners are Algeria, Tunisia and Spain. For Morocco to export electricity on a large scale to the EU through private projects such as Desertec, significant investments still need to be made.
In the future, Morocco has an important role to play in electricity exports from the Maghreb to the EU because of its comparative advantages:
- its connection with Spain, which connects the region to the European high-voltage grid;
- the intensity of winds in Morocco, which is counter-cyclical to that of the EU;
- its strong potential in solar energy.
Many Barriers to the Growth of New Energies
But some factors limit the growth of the sector, such as:
-technical constraints on electricity exports,
-subsidies granted to oil products that hinder the competitiveness of renewable energies,
-the importance of funding needed to make large-scale investments,
-the lack of programs that would develop small-scale renewable energy production by buying back energy produced by small units,
-the technology transfer and know-how required by the most efficient technologies.
Difficult Access to the European Market Due to Subsidies
Barriers to entry into the European market for electricity supply, in addition to the technical constraint of the capacity of interconnection lines, which limits cross-border exchanges, are electricity subsidies in Europe, which constitute a distortion of competition.
In any case, it is only in the long term that Morocco will be able to export electricity, the primary objective being to meet its own needs.
Regarding equipment, in addition to tariff barriers applied to certain products (but imports from Morocco are negligible), the main barriers to trade are technical standards and product quality.
Reducing the Country's Energy Dependence
It is very difficult to quantify the effects of the DCFTA on the renewable energy sector. However, we can estimate the main trends.
Economically, the most significant effects of the DCFTA will be through the reduction of non-tariff barriers with greater harmonization of legislation and standards.
They should facilitate access to equipment imported from the EU. The reduction of barriers to services will allow European suppliers to gain competitiveness over Asian competitors through support services. This will facilitate technology transfer between Europe and Morocco.
In addition, the DCFTA should create a more favorable investment climate. This should help develop renewable energy and equipment production in Morocco, and therefore reduce the country's energy dependence. When this reaches a critical threshold, the EU constitutes a significant market for energy exports from Morocco.
Socially, the development of renewable energies, facilitated by the DCFTA, will help stabilize energy prices and prevent social unrest. They can also constitute a new source of jobs.
Environmentally, the development of renewable energies will reduce the harmful effects of fossil fuels on public health, ecosystems and the climate due to greenhouse gas emissions.
In rural areas, the use of solar energy to replace coal and wood can reduce deforestation and soil degradation.
But to do this, the study recommends:
-an effective reduction of non-tariff barriers to services;
-encouragement of demand for small-scale renewable energy production;
-facilitation of technical assistance and capacity building for the organization of the renewable energy market;
-reduction of subsidies to fossil fuels;
-continued efforts to improve the business climate.
Melanie Xuereb.
Media24.com
Published October 24, 2013.
Posted November 5, 2013.
According to the impact study conducted by Ecorys, the Deep and Comprehensive Free Trade Agreements (DCFTA), by promoting the development of the sector, should reduce Morocco's energy dependence, reduce energy price fluctuations and thus promote social stability, reduce pollution and create new jobs.
This impact study is being conducted before the DCFTA currently under discussion.
Exportation: Possible with Massive Investment
Currently, renewable energies (hydro and wind) represent 4% of energy consumption.
Morocco is a net importer of electricity. Its main trading partners are Algeria, Tunisia and Spain. For Morocco to export electricity on a large scale to the EU through private projects such as Desertec, significant investments still need to be made.
In the future, Morocco has an important role to play in electricity exports from the Maghreb to the EU because of its comparative advantages:
- its connection with Spain, which connects the region to the European high-voltage grid;
- the intensity of winds in Morocco, which is counter-cyclical to that of the EU;
- its strong potential in solar energy.
Many Barriers to the Growth of New Energies
But some factors limit the growth of the sector, such as:
-technical constraints on electricity exports,
-subsidies granted to oil products that hinder the competitiveness of renewable energies,
-the importance of funding needed to make large-scale investments,
-the lack of programs that would develop small-scale renewable energy production by buying back energy produced by small units,
-the technology transfer and know-how required by the most efficient technologies.
Difficult Access to the European Market Due to Subsidies
Barriers to entry into the European market for electricity supply, in addition to the technical constraint of the capacity of interconnection lines, which limits cross-border exchanges, are electricity subsidies in Europe, which constitute a distortion of competition.
In any case, it is only in the long term that Morocco will be able to export electricity, the primary objective being to meet its own needs.
Regarding equipment, in addition to tariff barriers applied to certain products (but imports from Morocco are negligible), the main barriers to trade are technical standards and product quality.
Reducing the Country's Energy Dependence
It is very difficult to quantify the effects of the DCFTA on the renewable energy sector. However, we can estimate the main trends.
Economically, the most significant effects of the DCFTA will be through the reduction of non-tariff barriers with greater harmonization of legislation and standards.
They should facilitate access to equipment imported from the EU. The reduction of barriers to services will allow European suppliers to gain competitiveness over Asian competitors through support services. This will facilitate technology transfer between Europe and Morocco.
In addition, the DCFTA should create a more favorable investment climate. This should help develop renewable energy and equipment production in Morocco, and therefore reduce the country's energy dependence. When this reaches a critical threshold, the EU constitutes a significant market for energy exports from Morocco.
Socially, the development of renewable energies, facilitated by the DCFTA, will help stabilize energy prices and prevent social unrest. They can also constitute a new source of jobs.
Environmentally, the development of renewable energies will reduce the harmful effects of fossil fuels on public health, ecosystems and the climate due to greenhouse gas emissions.
In rural areas, the use of solar energy to replace coal and wood can reduce deforestation and soil degradation.
But to do this, the study recommends:
-an effective reduction of non-tariff barriers to services;
-encouragement of demand for small-scale renewable energy production;
-facilitation of technical assistance and capacity building for the organization of the renewable energy market;
-reduction of subsidies to fossil fuels;
-continued efforts to improve the business climate.
Melanie Xuereb.
Media24.com
Published October 24, 2013.
Posted November 5, 2013.
