Lessons from Power Sector Reforms : The Case of Morocco
Morocco charted its own distinctive path of power sector reform. It selectively introduced private sector participation for generation capacity expansion and electricity distribution, while retaining a strong, state-owned and vertically-integrated...
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| Format: | Working Paper |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/471511565200281012/Lessons-from-Power-Sector-Reforms-The-Case-of-Morocco http://hdl.handle.net/10986/32221 |
| Summary: | Morocco charted its own distinctive path
of power sector reform. It selectively introduced private
sector participation for generation capacity expansion and
electricity distribution, while retaining a strong,
state-owned and vertically-integrated national power utility
operating as a single buyer at the core of the sector. Until
recently, the country eschewed an independent regulatory
entity. The power sector has been guided by strong top-down
policy mandates that have served to align the disparate
actions of political parties and sector institutions.
Ambitious targets for electricity access, liberalization,
and renewable energy investments were conceived as an
integrated approach to contribute to economic development by
relieving fiscal pressures, reducing external dependence on
fossil fuels, and positioning the country as a regional
leader in renewable energy. The results have been
impressive. Since 1990, Morocco has more than tripled its
power supply, while growing renewable energy to account for
one-third of the total and relying on the private sector to
supply just over half of the electricity generated. Rural
electrification has accelerated rapidly from 18 percent in
1995 to virtually 100 percent in 2017. While operational
efficiency has been broadly adequate, performance has
fluctuated over time. Moreover, the sector’s achievements
through this selective approach to reform have come somewhat
at the expense of the financial viability of the incumbent
utility, the National Office for Electricity and Water
(ONEE), which has suffered from lack of cost-reflective
tariff-setting and an array of entrenched cross-subsidies.
Other vulnerabilities include the continued but declining
dependence on electricity imports, external price
volatilities of imported fossil fuels, and a territorialized
electricity distribution model that could be disrupted by
grid integration of renewable energy. |
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