Montel News
ANDRÉS CALA and BELÉN BELMONTE
Photo: Pedro Sala, Shutterstock.com
(Montel) Spain and Morocco will build a third power link (700 MW) between the two countries, TSOs said, amid a surge in imports from the north African country over the last three months.
Total capacity between the two countries will increase by 50% to 2.1 GW by 2026, Spanish and Moroccan TSOs said late on Thursday.
Moroccan electricity exports to Spain have risen from almost zero before November last year, to average 4.7 GWh/d in the year to date, according to Spanish TSO data.
Electricity supply in the north African country was boosted by the start-up of operations of the Safi (1.4 GW) ultra-supercritical coal-fired plant in mid-December, but a hydro surplus and other renewable installed capacity also contributed to the increase in exports, experts told Montel.
The startup of the Safi power plant, built by joint venture with three shareholders including Engie, created a surplus in Moroccan market amid a wet season said Abdelghani El Gharras, energy analyst at Observatoire Méditerranéen de l’Energie (OME), highlighting also lower marginal cost of production at the north African country’s coal-fired plants.
While Spain is looking to lower the carbon footprint of its power plants, it may end up importing cheap electricity from fossil-fuel fired units in Morocco.
Morocco plans to increase coal-fired capacity by 2.9 GW to 5.4 GW by 2025, gas-fired capacity by 2.4 GW to 3.9 GW, and renewables by 3.4 GW to 6.3 GW.
However, demand is set to rise 6% annually to 85 TWh/year in the same period, which could put a limit on exports, experts said.
“We could witness a bi-directional flow with important quantities from both sides, but not really Morocco as net exporter, at least in the short- to medium-term,” said El Gharras. Others agree. “Imports [from Morocco will be] very limited”, said Javier Revuelta of Pöyry.
New capacity
In the meantime, Spain is expected to add 50-60 GW of new renewable capacity by 2030, while Portugal will add another 15.4 GW, said experts.
Marginal cost of electricity production in Morocco averages between EUR 30-40/MWh, experts said.
“My own calculations based on a coal price of around USD 100/t are that Moroccan [power] prices are somewhere around EUR 40/MWh,” said Tayeb Agmegroud, founder of GPower consultants and senior fellow at the policy centre for the new south (OCP Policy Center).
That compares to Spain’s average wholesale price in January of EUR 61.98/MWh, and EUR 57.30/MWh in 2018. The Spanish Cal 20 baseload contract last traded at EUR 54.41/MWh.
With Spanish wholesale prices about EUR 10/MWh higher than their Moroccan equivalents, it makes economic sense for Spain to import power from Morocco, said Pöyry’s Revuelta.
Morocco is also negotiating a new 1 GW power interconnector with Portugal.
