The Green Element
On March 11, the Moroccan government announced that it will allocate approximately 1mn hectares for the development of green hydrogen projects. The move is part of the so-called Morocco Offer initiative, which aims to attract investment and position the country as a major player in the green hydrogen industry by leveraging its renewable potential.
The Morocco Offer, first formulated in 2022, includes various operational steps, such as mobilization of land, development of infrastructure, and implementation of incentive measures.
The first phase of the initiative will offer 300,000 hectares for integrated projects spanning from power generation from renewable sources and electrolysis to the conversion of green hydrogen into methanol, ammonia, and synthetic fuel.
Green hydrogen refers to hydrogen that has been produced through electrolysis by using renewable energy, rather than relying on electricity generated by fossil fuels. This hydrogen can then be used as a clean energy source, only generating water vapour and heat as byproducts.
Morocco’s green hydrogen roadmap is focused on hydrogen, ammonia, and methanol to consolidate its energy transition, reduce greenhouse gas emissions, utilize its renewable potential, promote the country’s economy, and strengthen its energy security.
The proximity to the European continent gives Morocco a unique strategic advantage. The country also has a well-developed gas and port infrastructure and can easily become a leading hub to export green hydrogen to Europe.
According to a report by Hydrogen Insight, Morocco wants to produce 4 TWh of hydrogen for domestic use and export another 10 TWh per year by 2030. The EU, on the other hand, has set a target to import 10mn tonnes of renewable hydrogen annually by 2030. The bloc has already signed agreements with Morocco to cooperate on regulatory frameworks and finance production and export infrastructure. The EU has also made a financial pledge of EUR 50mn to support Morocco’s decarbonization drive. The champions for turning Morocco into a hydrogen hub believe that exports from there could be cheaper than production in Europe because of the country’s abundant sun and wind resources. Also, its proximity to Spain can make possible the construction of a pipeline, which is the most cost-effective way to transport hydrogen.
Morocco’s oil and gas reserves are small, but the country has abundant solar and wind resources. It also has the important advantage of political stability, unlike many other countries in the region. Morocco’s target is to produce 52% of its energy from renewable sources by 2030, and the government has been heavily investing in infrastructure to meet this target.
According to Rystad Energy research from March 2023, there are 52 green hydrogen projects announced in Africa. Production is expected to see a substantial increase after 2025 and reach 7.2mn tonnes by the end of 2035. Most of these projects will be producing ammonia as an end-product for export to Europe.
Rystad Energy also claims Morocco will be among the top 10 countries by green hydrogen production cumulative capacity globally in 2023-2030, with annual capacity expected to reach 984,900 tonnes at the end of the period.
There are already three hydrogen projects in the works in Morocco. The largest one is the Amun project developed by one of the world's largest independent green hydrogen companies CWP Global. According to information on CWP Global’s website, the Amun project is an ultra large-scale green hydrogen project based in the Guelmim-Oued Noun region of Morocco, aiming to produce green ammonia and other derivatives. The project, which is still at a feasibility stage, presents a multitude of opportunities due to the high demand for fertilisers by Morocco’s big agriculture sector. The Amun project can support green fertiliser production and provide desalinated water as well as green electricity to help develop agro-industrial production in the project region. The project has the potential to generate up to 17 GW of hybrid wind and solar power and aims to produce up to 1mn tonnes of green hydrogen per year and up to 5.8mn tonnes of green ammonia.
Total Eren’s Guelmim-Oued Nour project will be capable of producing 710,000 tonnes of green hydrogen per year, the Hevo Ammonia Morocco project has a capacity of 31,000 tonnes, the Masen Green Hydrogen project has a capacity of 8,400 tonnes, and the Ben Guerir project can produce 125 tonnes.
French developer HDF and Moroccan investment holding firm Falcon Capital Dakhla also have plans to build a facility with capacity of 10 GW of wind energy, 7 GW of solar energy, and 8 GW of electrolysis in the country and Abu Dhabi’s national energy company TAQA is also reportedly mulling an investment into a 6 GW facility in Morocco.
While the export projects are still at an early stage, Morocco can take advantage of its domestic green hydrogen demand, for example from fertilizer producer OCP Group, which strives to hedge against gas price fluctuations.
By benefitting from the global trend in favor of green hydrogen, Morocco can use the new technology along with its renewable energy assets to meet local and regional energy demands. The country should beware not to skew its focus too much in the direction of exports, since this may translate into increasing demand for coal electricity in the national market.
Original source: EMIS Insights