Joint UNDP/Worid Bank Energy Sector Management Assistance Program Activity Completion Report JNO. 048/86 Country: MOROCCO Activity: ENERGY ASSESSMENT STATUS REPORT JANUARY 1986 Report of the Joint UNDP/UrId Bank Energy Sector Managetment Assistance Program This document has a restricted distribution. Pts contents may nc)t be disclosed without authorization from the Government, the UNDP or the World fank. '!~~~~~~~~~~~~~~' ENEROY SECTOR MANAGEMHNT 5SSlsTANCE PROGRAM The Joint UNDP/World Bank Energy Sector Management Assistance Program (ESt1AP), stàrtedin April'1983, assists chntries in`,implementing the main investment flnd' policy recrommendations, of the En'ergy Sector Assessment ' Reports produced under another *loint JUNDP/World Bank Program. ESMAP provides staff and c,nsultant assistance in fornulating and justifying priority pre-investment and investment projects and in providing management, institutional and policy support. The reports produced under this Program provide goveruments, donors and potential lnvestors with the informati.on needed to speed up project preparation and implenentation. ESMAP activities can be classified broadly into three groups: '- 1Energy Assessment Status Reports: these evaluate achieve- ments in the year following -issùance of the ôoriginal assessment report and point out where urgent action is still needed; - Project Formulation and Justification: work defigned to accelerate the prep-ration and implementation of investment projects; and - Institutional and Policy Support: this work a3so frequently leads to the identification of technical, ass-istance packages. The Program aims to supplement, advance and strengthen the impact of bilateral and multilateral resources already available for technical assistance in the energy sector. Funding of the Program The Program is a major international effort and, while the:core finance has been provided by the UNDP and the Uorld 1tank, important financial contributions to the Prograo have also been made by a number .of bilateral agencies. Countries which have now made or pledged initial contributions to the programs through the UNDP Energy Account, or through other cost-sharing arrangements with UNDP, are the Netherlands, Sweden, Australia, Switzerland, Finland, United Kingdom, Denmark, Norway, and New Zealand. Further Information For further informatisn` on the Program or to obtain copies of .coupleted ESIWAP reports, which are listed 'at the end of this document, please contact: Division for Global and OR Epergy Strategy and Interregional Projects Preinvestment Div. I United Nations Development Energy Department Proaram World Bank One lbnited Nations Plaza 1818 H Street, N.lJ. New York, N.Y. 10017 Washington, D.C. 20433 MOROCCO ENERGY ASSESSMENT STATUS REPORT JANUARY 1986 ABBREVIATIONS CDER Centre de Développement des Energies Renouvelables (Renewable En¢rgy Development Center) CDM Charbonnages du Maroc (formerly Charbonnages Nord Africains) (Collieries of Morocco, formerly North African Collieries) COM Covernment of Morocco IAEA International Atomic Energy Agency IBRD International Bank for Reconstruction and Develop- ment (World Bank) LPG Liquified petroleum gases (butane and propane) MEM Ministère de l'Energie et des Mines (Ministry of Energy and Mines) MEM/DE MEM/Direction de l'Energie (Energy Directorate) MI Ministère de l'Intérieur (Interior :4inistry) ONAREP Office Naticnal de Recherche et Exploitation Petrolières (National Office for Petroleum Exploratior and Development) ONE Office National de l'Electricité (National Electricity Authority) Plan Ministère Plan, de la Formation des Cadres et de la Formation Professionnelle (Ministry of Planning and Executive and Professional Training) SAMIR S.A. Marocaine de l'industrie du Raffinage (Moroccan Refining Industry Corporation) SCP Société Chérifienne des Pétroles (Royal Moroccan Petroleum Company) SNPP Société Nationale de Produits Pétroliers (National Oil Products Company) SOCOCHARBO Société de Commercialisation du Charbon (Coal Marketing Company), a subsidiary of Charbonnages toe Tons of oil equivalent Tpa Ton per annum WNICEF United Nations Children's Fund US-AID United States Agency for International Development This report is based partly on the findings of an ESMAP mission in February 1985, and partly on the World Bank's experience in Morocco with energy projects. The mission was comprised of Mr. Naiem A. Sherbiny (Sr. Economist) and Ms. Manon Muller (Researcher). TABLE OP COUTENTS Page SUMMARY AND RECOMMENDATIONS. .......................... . i I. CHANGES IN ENERGY SOURCES ANDUSES........................ 1 A. Changes in Energy Sources.............,............... , Woodfuel. .... ... ..... .......... ..................... ....... 2 Hydropower and Electrici ty.......................... Z Natural Ga ..........................4 Petroleum and Petroleum Products.................... 5 Other Supply Sources ........... ....... 6 - Oil Sha6es.......... . 6 - Non-wood Renewables ....................... ........ 7 B. Changes in Energy Uses,.............................. 7 Il. POLICIES & INSTITUTIONS .......................... il, 1 A. Demand Policiesi..l................ ...... .... ...... . l B. Supply Plce ............................ 17 C. Energy Sector Organzation............................ 19 III. ENERGY INVESTMENTS ....................... 22 A. Realized EnergyInvestments ......................... 22 B. Energy Investment Strategy............................ 23 C. Planned Energy Investments........................... 25 IV. A RECOMMENDED PROGRAM OF PREINVESTMÎNT ACTIVITIES AND STRATEGY STVDIES ................. 33 A. Energy Strategy Stde .............................34 Energy Efficiency Improvements*........................ 34 Coal Action Pian .............. 34 Government Strategy for Household Energy.............. 35 Reservoir Management Optimization . .... ..... .. ........, 35 B. Preinvestment Activities in Power..................... 36 Power Transmission Reinforcement Program..... ......... 36 Loss Reduction in Power Transmission and Distribution .................................................... . 36 C. Preinvestment Activities in Re,.ewables................ 37 Solar Water Heaters......... - ..................... ... 37 Wind Farm ................................ 37 Agricultural Residue Utilization .................. 38 ANNEX 1. Energy Sector Technical Assistance Activities Financed by Major Donors...... ................ .......... 39 SUWMARY AID REONHENDATIOIS 1. Since the Energy Asses9ment mission of February 1982, Morocco has made several efforts in the energy sertor: developing domestic energy sources, moderating energy demand, and improving its energy planning and management. These efforts vere made against a background of continuing macroeconomic difficulties: the rising costs of energy imports, the slowdown of economic growth, the decline in re'ienues from phosphate exports, and the drought of 1980-84. Nonetheless, given the magnitu:de of the energy problem and ite importance to the economy as a whole, much work remains to be done. 2. This report is based on a field mission which took place in February 1985. The objective of the mission was to update t-. original energy assessment, sufmarize the changes in energy sources and uses since that time, outline Government policies to manage energy demand and promote energy supply, describe the main institutional/organizational characteristics of energy agencies, examine energy investments and identify priority activities that would lead to specific energy sector investments, well defined policy measures and/or better intersectoral coordination. Some of these activities can be financed through the joint UNDP/World Bank ESMAP program; others could be subsumed under World Bank energy loans presently being prepared; and the remainder could be presented to members of the Consultative Croup for their consideration. Following are highlights of the report and its main recommendations. Energy Sources 3. Traditional energy, principally fuelwood, still accounts for more than 80% of domestic primary production and close to 40% of total energy supply. Yet, the forestry sector is not allocated sufficient investments to maintain its resources, so that the rate of deforestation has be n about 20,000 hectares per year during the last 15 years. (para. 1.6-1.8). Recommended: Establishment by the Government of the proper framework to strengthen forestry development policy. The formation of an inter-Ministerial committee comprising Agriculture, Energy, Interior, Planning and Economy should be the first step in establishing such a framework. 4. While the supply of commercial energy increased during 1981-84, domestic production declined markedly; both the drawdown of reserves and increased imports were the compensating factors. The decline in com- mercial energy production came exclusively from a dramatic drop in hydro- electricity caused by a continued drought, and was not made up by the moderate increase in coal production. The use of both domestic and imported coal expanded at 10.7% per year (para. 1.9-1.15). - i,i - 5. Imported oil continues to dominate the picture, providing about 7/8 of commercial supplies, In contrast, the domestic production of oil and natural gas combined represents les. than 2% of commercial supplies largely because some of the earlier h^,pea about the Meakala gas field did not materialize. Oil continues to be imported in crude form and refined domestically, and capacity utilization in the refineries has improved recently as a result of introducing a tube oil production unit using fuel-oil as feed stock (para. 1.15-1.20). Energy Uses 6. Between 1974 and 1984, growth in commercial unergy consumption decelerated significantly, dropping from 6.7% per year during 1974-80 to 1.8% per year du-ing 1981-84. Three factors may explain this change: a marked slowdown of GDP growth, from 6.0% to 2.7% per year for the respec- tive periods; policy-induced increases in energy prices; and the recent adoption of a wide range of energy conservation measures. Together, these factors resulted in actual reductions in the consumption of. gaso- line and jet fuel, and in keeping constant the consumption of kerosene and gas oil. Most of these changes have contributed to a reduction in the GDP elasticity of energy demand from 1.12 during 1974-80 to 0.67 during 1981-84. Those changes and the slowdown in GDP growth both suggest that primary energy demand forecaste should be reduced (para. 1.23-1.24). Recommendeds Scaling down primary energy demand forecasts during preparations of the nev Plan. 7. Except for some minor changes at the margin, the overall structure of energy use remained about the samet according to mission estimates, households consumed about one-half of total use, industry and transport/services consumed less than one-fourth each, and agriculture's share remained below 3%. More than 80% of bousehold energy continues to be met from fuelwood, while the other sectors consume only commercial energy. Hovever, within the industrial sector the structure of energy use changed somewhat, particularly in the cement subsector which began to convert to coal and thereby reduced its relative use of petroleum products (para. 1.26-1.29). Energy Demand Policies 8 The Covernment should be commended for continually adjusting the prices of most energy products se that they stayed above or just even with opportunity costs. With the exception of LPC, the domestic prices of energy products in dirhams increased betveen 28% and 69%, and elec- tricity prices increased at about 21%. Meanwhile, the 35% depreciation of the dirham caused the U.S. dollar equivalent of domestic enerer prices to correspond roughly vith the pattern of import price changes. LPG and electricity prices, already below their opportunity costs in 1982, appear to have slipped further from their respective opportunity costs in 1984, implying their continued subsidization, albeit implicitly, and the - iii - significant increase in the amount of subsidy per unit of output (para. 2.24-2.8). Recommended: All energy agencies should continue to adjust energy prices in line *ith economic principles; in parti- cular, ONE and the Regies should close the gap between electricity prices and the opportunity costs of producing and distributing electricity; similarly, SNPP should adjust LPG prices closer to their oppor- tunity costs. In both cases, however, the process of adjusting prices should be balanced vith the need to minimize implicit energy subsidies while satisfying household energy demand. 9. In interfuel substitution, industry and power generation have made concerted efforts to switch over to coal both in existing facilities and in new plants, because of the price differential between fuel oil and coal which gave coal a decisive advantage. Thus, ONE switched the existing Roches Noires power plant (60 MW) and equipped the newly-built Mohammedia III and IV (2 x 150 MW) with flexible boilers which can burn coal, fuel oil, or natural gas. The cement industry similarly converted to coal existing plants of Cadem in Meknes and Lafarge in Casablanca, and introduced new coal-burning equipment in the plants of Agadir and CIOR. Interfuel substitution in the residential sector is more problematic, as the need to svitch away from woodfuels is prompted on the one hand by forest degradation but checked on the other by the rising costs of commercial fuels and their growing burden on the balance of payments (para. 2.9-2.15). Recommended: Given the recent trend of declining oil prices, MEM should reassess costs and benefits of potentially converting to coal other cement and power generating plants vithin the Coal Action Plan and, if results are favorable, push forward with the producing companies for further conversions. 10. In the domain of energy conservation, there is substantial potential in two of the largest energy-using sectors: households (accounting for 52% of total use) and industry (21% of total use). In industry, the application of selective power cuts to production faci- lities during peak evening hours was about the only measure of energy conservation introduced recently. While this measure appears to conserve some energy, it is a forced conservation which can be potentially dis- ruptive for industrial plants. Improving energy efficiency in those plants is a superior alternative, given the good potential indicated by recent studies. In the household sector, several energy conservation measures vere adopted in 1984, including public education campaigns and shortening the workweek, among others. Not all of these measures have had sufficient time to work throughout the system yet and their impact remains to be seen (para. 2.16-2.18). - iv - Recommendeds Covernment agencies which started energy conservation efforts should continue those efforts on a regular basis. Energy conservation in industry should start immediately in public industrial enterprises, in close coordination with Ministries of Energy, Industry and Economy to assure that appropriate investments are allocated to translate plans into action. Energy SuppLy Policies 11. Although Morocco has an abundance of some energy resources (principally oil shale, wind, solar, hydro) the utilization of which la technically feasible, not all the feasible options are economically viable and often the necessary investment resources are not readily available. Improving the energy efficiency of operating facilities therefore seems to bring the energy sector closer to its least-cost path. Whether it is to optimize the use of existing hydro facilities, reduce losses of power transmission and distribution, or upgrade the facilities and improve the management of the Jerada coal mines, the expenditure of effort and resources seems to be well justified (para. 2.19-2.21). Recommended: The Government should continue assigning high priority to improving the efficiency of operating facilities. Together with appropriate Ministries and public enter- prises in energy and industry, the MEM should estab- lish a national plan for improving energy efficiency. The Ministry of Economy should assist these efforts by allocating sufficient investments to translate plans into action. 12. Private initiatives are being encouraged in several energy activities. In oil and gas, the Covernment is promoting joint ventures by providing fiscal, technical, and other incentives which have resulted in increased exploration expenditures by and agreements with major oil companies. More possibilities for private capital participation still exist because the on-shore area hitherto explored Cepresents one fifth of the total potential, and in off-shore activities only 25 exploration wells have been drilled along the country's shores of 3,500 km (para. 2.22-2.23). Recommended: To encourage further oil and gas exploration, the search for international private partners should be intensified and the new hydrocarbon investment code passed. 13. In the development of renewable resources, the private sector potential is evident both in the commercial development of forests, and in the application of non-wood renevables, especially in rural and mountainous areas (para. 2.24-2.25). Recommended: Further policy and institutional reforma are needed to consolidate the recently initiated privatisation trendt, in order to allow private enterprise to con- tribute more fully to the development of traditional and renewable energy sources. Legislative reforme are especially needed to encourage private participation in fuelwood development in the larger context of commercial development of forests. Institutions and Organization 14. Many public enterprises, in energy and elsewhere, have rather intractable probleme with financial arrears which are seriously interfering with their performance and efficiency. Financial restruc- turing thus has become an urgent priority for energy enterprises su_h as ONE and petroleum product distribution companies. The Covernment has recently entered into dialogue with the World Bank to explore the pos- sibility of reform. The guiding principle is self-financing to recover investment costs, which would minimize the need for budgetary transfers to public energy enterprises (para. 2.26-2.27). Recommended: Within the context of the financial restructuring presently being considered by the Government, a high priority should be assigned to developing an agreed program with public energy enterprises to settle their financial arrears in a defined time period. 15. Organizationally, the intereste of more than one institution in the same subsector frequently overlap and sometimes conflict, affecting their performance and the efficiency of resource allocation. For example, the activities of the Rural Affaire Division (Ministry of interior) and Ministry of Agriculture involve renevable energy develop- ment without coordination vith CDER. Meanwhile, there is insufficient focus of institutional responsibility for woodfuels (para. 2.28-2.29). Recommended: HEM should take a more active role by coordinating at regular intervals activities with the Ministries of Agriculture and Interior and with CDER. The M!M should also assign staff to integrate information and decisions on woodfuels into its operations. 16. Another institutional weakness lies in the Planning Department of HEM which is presently used only for training of junior-level staff, making little or no use of the sophisticated computerized energy planning model at its disposal for policy formulation (para. 2.30). RecommendedS MEM should look seriously into upgrading its Planning Department by encouraging higher level staff of the Ministry to become more involved, restucturing the Department tO make fuller use of its facilities to develop alternative energy scenarios, update its data - vi - bank and orient its operations to assist effectively in formulating the country's major energy decisions. Energy Investment and Strategy 17. Iwo factors hindered Morocco from achieving its energy invest- ments as stated in the 1981-85 plan: the resource constraint became more binding with the decline in export revenue; and the decline in the international price of oil rendered questionable the development of oit shale and dampened the drive to develop renewable energies. The energy investment shortfall Was about 40% for the sector as a whole, about the same ratio in the electricity subsector, and about 20% in the oil and gas subsector. With the exception of a minute portion allocated to experi- mentation, the commercial exploitation of oil shales was postponed (para. 3.2-3.4). 18. Despite the existence of Government pol-cy for energy demand and energy supply, there is no overall strategy for allocating investment resources among energy alternatives and ranking energy projects according to comprehensively agreed criteria. In attempting to establish such criteria, the objective of minimizing total energy costs appears to be a reasonable starting point. In contrasting investments in energy generation with those in efficiency-related energy savings, the latter generally require less expenditure per unit of energy and involve much shorter gestation lags. By concentrating nearly all investments in new energy generation, Morocco's present energy development program is not on a least-cost path (para. 3.5). Recommended: The Government should assign high priority to energy efficiency and conservation so that lc is reflected in the country' s investment allocations, as detailed below. Recommendations for Energy Investments 19. In discussing the proposed investments in various energy subsectors the following recommendations are made: (a) In fuelwood: its resources should be developed as part of commercial forestry development, with the Government providing proper incentives to private sector investors to complement public investments and overcome the dual financial- institutional constraint (para. 3.14). (b) In hydroelectricity: improving the management of existing multi-purpose dams is proposed in parallel with launching new projects; a national plan for the development of small hydro sites (up to 3 MW) with criteria for their ranking is recom- mended; the economic evaluation of hydro projects must incor- porate the appropriate portion of cost of site preparation and - vii - dam construction to produce realistic benefit-cost ratios (para. 3.15-3.18). (c) In thermal pover Sener&tiont Mohammedia port appears to be the optimal location for coal-cired pover stations, and the pro- posed relocation of the planned facilities to Jorf Lasfar is questionabla; in view of lower GNP growth and lover GNP elas- ticity of demand for energy, electricity demand forecasting scenarios appear exaggerated and need to be adjusted downward; loasses in electricity transmission and distribution warrant a detailed audit; and a long-term plan for the national pover generat.4n and transmission network is reccmmended (para. 3.19- 3.21). (4) In coal: the plans of CdM to increase revenues from two pro- posed operations in the Jerada mines are not economic and should be discarded. These are a thermal power plant f ed by washing rejects and a fines briquetting installation. On the other hand, a racent feasibility study on washing facility for fine coal showed promising results, so that the company is justified in proceeding with the investment. CdM's plans to expand Jerada coal production to 2 million tons per year stould equally be disregarded because of the high risk associated with poor quality coal, limited proven and possible reserves, and the undue strain on managerial, staffing, and financial re- sources; and in view of the sudden expansion in consumption and importation of coal, a coal action plan is recommended to minimize potential infrastructure bottlenecks and assure proper coal delivery to coal-burning plants (para. 3.22-3.25). (e) In natural gas: the high cost of domestic distribution and low demand prospects render questionable the economic viability of the Essaouira urban gas distribution and industrial utilization project, and therefore the project should not be adopted; the natural gas utilization plans to supply the OCP phosphate plants at Youssoufia appear to be the most attractive among present alternatives. Construction of the associated project has been started after OCP and ONAREP reached a sales agree- ment. The resulting natural gas has been priced using a for- mula based on discounted fuel oil prices to promote conver-'ion to natural gas. This project will help to achieve two objectives: help ONAREP consolidate its position as a revenue- earning entity, and set standards for natural gas pricing which vould attract prospecting international companies (para. 3.26- 3.27). (f) In oil shale: the fall in oil prices below $35 per barrel has dampened the prospects for shale, especially using the retort- ing techniques; nevertheless, development studies for retorting technology remain planned using private capital. The direct - viii - combustion technique may have some potential viability, but should be limited to experimentation (para. 3.28). (g) In renewables: experimentation and pilot projects are yielding potentially useful applications for small agro-industrial busi- nesses and householdt in small rural/mountainous communities, as well as for hotels and public buildings in urban areas, but their commercial viability remains to be established (para 3.23-3.32). Preinvestment and Strategy Studies 20. Finally, to respond to the gaps identified in reviewing energy sector developments, policies, and proposed investments, the following program of preinvestment and strategy studies is proposed. The program covers three categories: strategy, power and renewables. (a) The energy strategy studies aim at improving energy planning, improving the performance of energy subsectors, avoiding in- frastructure bottlenecks, and optimizing energy production facilities. These studies include: energy conservation and efficiency audits, coal action plan, government strategy for household energy, and dam management optimization (para. 4.5- 4.13). (b) The preinvestment activities in power aim at generating a pipeline of priority investment projects for the subsector in the following areas: power transmission reinforcement program, loss reduction in power transmission and distribution, and a national plan for the development of small hydro sites (para. 4.14-4.18). (c) The preinvestment activities for renewables aim at developing commercially viable proposals for selected proven technologies, the potential application of which is not constrained in Murocco by institutional or other barriers (para. 4.19-4.24). 21. These studies will vary in cost and duration. While some will cost as little as $70,000, others will cost as much as $600,000. The total cost of .he program will be about $1.9 million. Furthermore, the duration of these studies will vary from as short as six months to as long as twenty months. I CQMGES IN ERGY SOURCES Aul USES A. Changes in Energy Sources 1.1 The 1982 Energy Assessment mission used 1981 data as the basis of its analysis. The major changes that have taken place in the energy supply picture since 1981 concern the relative contributions of domestic and imported coal and hydro-based power generation (Table 1.1). Coal production in 1984 provided 71% of commercial energy primary production, up from 51% in 1981. The contribution of hydro-based pover, on the other hand, has declined substantially because of successive droughts. In 1984, it provided 16% of commercial energy primary production, down from 37% in 1981. 1.2 Traditional energy, principally in the form of fuelwood, not only continues to account for the bulk of domestic primary production, but also for an increasing share -- 85% in 1984, up from 82% in 1981. As a corollary, commercial energy resources accounted for a declining share. In relation to aggregate energy supply, woodfuels accounted for a substantial portion (37% in 1984, 38% in 1981). The implication of this finding for government action is significant: if energy policies are to be effective they should seriously take into account short-term measures to preserve and long-term measures to augment woodfuel resources. 1.3 The combined role of natural gas and oil in primary production continues to be quite minor, even in relation to indigenous commercial resources: 14% in 1984, 12% in 1981. These sources provided orly a minute 2% of total primary production both in 1981 and 1984. The 1982 Assesament mission recommended a substantially increased role for natural gas. However, recent estimates show proven gas reserves to be much lower than originally projected. Barring new major discoveries by any of the petroleum companies presently exploring in Morocco, the role of natural gas and oil in primary production is likely to remain quite limited. 1.4 The share of domestic production of energy in total supplies decreased somewhat over the period, from providing 46% in 1981 to less than 45% in 1984. The domestic production of commercial energy also covered a smaller percentage of commercial supplies -- 11% in 1984, down from 13% in 1981. Measured in toe, domestic commercial production decreased over the period. The balance was imported, mostly in the form of crude oil and petroleum products. 1.5 In addition to indigenous energy resources which have been developed in varying degrees, Morocco has abundant untapped supplies of oil shales and non-conventional r^sources such as solar and wind energy. Technologies to harness these resources have undergone more experimentation since 1981, particularly in the non-conventional area. The Centre de Développement des Energies Renouvelables (CDER) has been created to develop and promote non-conventional resources and so far has -2- lauwched demonstration projects to test: photovoitaic pumping, biogas digestors, solar measurement equipment, solar refrigeration in rural health centers, and solar electrification and television. Notvith- standing theute efforts, they remain isolated demonstration prototypes. Woodfuel 1.6 All the available statistics indicate that national woodfuel consumption remained quite high in Morocco -- most recently estimated at 3.38 million toe for 1984, up from the revised figure of 3.18 million toe for 1981. 1/ Furthermore, several factors vill continue to ensure that woodfuel plays a substantial role in the energy picture at least through the year 2000, including forecaste that more than half of the Moroccan population vill still be living in rural areas until at least 1995; heavy rural per capita consumption of woodfueli; woodfuel's integral roie in the life-style and housing design of the rural population; and the much lover incomes of rural households, vhich are generally insufficient for the purchase of commercial fuels or their requisite durables to substitute for woodfuel. Table 1.1: SOURCES OF ENERBY SUPPLY (thousand toe) Primary Production Imports Total Supply Item 1981 1964 1981 1984 1981 1984 Treadiltional 3,180 3,378 - - 3,180 3,378 Commerclal 689 580 4,725 4,945 5,238 5,525 of which: Natural Gas 64 64 - - 64 64 011 & Products 19 15 4,698 4,774 4,491 4,789 Hydro 254 90 - - 254 90 nga1 352 411 27 129 429 540 Total 3,869 3,958 4,725 4,903 8,418 8,861 Sources: 1981 data: Table 1.1 of the Energy Assessuent Report, except for traditional energy. 1984 data: Ministry of Energy esti- mates, Primary production of traditional energy Is based on Mission estimates for both 1981 and 1984. Note: total supply figures do not always equal the sum of primary production and Imports because of stock changes. 1/ The Energy Assessment first estimated national woodfuel consumption at 2.36 million toe in 1981. The adjustment vas made as a result of a recent national survey carried out by the Department of Forestry in eight provinces. 1.7 Given the important role that woodfuel vill continue to play in meeting household energy needs, the fact that deforestation is occurring at a rate of some 20,000 hectares per year is a cawae for serious con- cern. Deforestation is not dramatic relative to the 5.3 million hectares of total forest cover, but it is already a ser.ous problem in particular areas where deforestation is concentrated and where fuelwood supply is deteriorating steadily. 1.8 The Energy Assesqment Report recommended that the Centre de Développement des Energies Renouvelables (CDER) devote many of its resources to exploring, developing, and promoting woodfuel conservation and substitution. So far, CDER has concentrated its efforts on non-wood fuels and has had little contact with the Ministry of Agriculture in this area. Whether the maintenance and development of woodfuel resources is the responsibility of one agency or another, or whether this activity itself is analyzed in the sectoral context of agriculture or energy, there is no question that concerted action by the Government or the private sector is needed to stop and then reverse the deforestation trend. Hydropower and Electricity 1.9 The continued drought conditions in Morocco which have sub- stantially curtailed hydropower production (from 29% of electricity supply in 1980 to 6% in 1984) have prompted the Ministry of Equipment to consider the need for better management of hydro sites (para. 4.12-4.13). 1.10 Power generating capacity has increased by 300 MW since 1980 with the commissioning of the Mohammedia I and Il thermal plants. This growth has raised the share of thermal generation in total demand for boiler fuels from 48% in 1980 to 53% in 1984. The 1984 figure, however, is inf1sted by the drought-induced shortage of hydroelectric generation which has stretched thermal generation capacity to its limit. Combustion engines at Sidi Kacem, Agadir, Tangier and Tetouan have been kept in almost continuous operation since 1980, although most of this capacity (135 MW) was originally designed to be placed on cold reserve. 1.11 The operating costs of the Office National de l'Electricité (ONE) have risen as a result of increased domestic prices of fuel oil and gas oil. However, rehabilitation of the Jerada mine-mouth coal-fired plant and the switching to coal of Unit II of the Roches-noires plant (60 MW) somewhat helped to buffer the cost escalation. No relevant figures, however, vere made available to the mission. Coal 1.12 Given the changes in relative energy prices since the 1970s and scareity of commercially viable energy resources in Morocco, coal has become a relatively more promising national source of commercial energy. Coal reserves at Jerada are rather modest - 10 million tons of measured reserves and 50-60 million tons of probable and possible -4- reserves. Jerada's coal consists of 28% higher grade, coarse anthracite, and 72% fines with a high ash content (40%), the production of which is expected to increase under the nev mechanized exploitation methods. 1.13 The '!olume of coal use has been expanding quite rapidly f rom a low base since 1970. A sustained oil-coal price differential has prompted the expansion of coal use in industry and electricity generation both at the margin (new equipment) and on average (conversion of existing equipment). Coal use expanded from about 800,000 tons in 1980, to 1.1 million tons in 1984. The domestic production of coal also expanded during 1980-84. In anticipation of this expansion, the Assesament Report recommended increasing coal prices, monitoring the results of a pilot mechanization project, and studying market potentials. Since 1982, domestic coal prices have increased by 65%, thus bridging the gap with imported coal prices and limiting the deterioration in the financial position of Charbonnage du Maroc (CdM). Following positive technical assessments, a World Bank-financed project has recently been negotiated with the government to mechanize a new pit at the Jerada mine which will permit total coal production to increase to 1 million tons per year by 1988. The market for coal is well established, in view of the recent conversions to coal in the cement industry and pover generation. 1.14 Although coal production increased between 1980 and 1984, it representtd a declining portion of total coal use: from an average of about 90% during 1975-80 to only 71% in 1984. The balance vas made up by coal imports, which have grown rapidly, from about 30,000 tons/year throughout the 1970s, to about 211g,000 tons by 1984. 1.15 The immediate future is likely to see further substantial expansion in coal use, calling for a similarly substantial expansion in domestic production and imports. ONE's electricity generating capacity viii expand significantly around mid-1986 from the addition of two coal- fired u-nits of 150 MW each at Mohammedia (III and IV), calling for an expansion in coal use of about 800,000 tons/year, even though no plan exista yet to bring coal in through the port of Mohammedia. The CIOR cement plant in Oujda has already been converted to coal and is expected to place an additional demand for coal of about 120,000 tons/year. Even if other industries do not convert to coal, and barring major decline in oil prices, the volume of coal use by late 1986 is expected to reach about 2.5 million tons. Part of this expansion will be met from con- tinued growth in the production of Jerada coal, expected to reach a maximum of 1 million tons a year by 1988. Most of the expansion in coal use in the immediate future, however, must come from imports, which are expected to exceed 1.5 million tons by the end of 1986. For this reason, the mission proposes a coal action plan (para. 4.7-4.8). Natural Cas 1.16 The discovery of the Meskala deposit in 1981 led the Energy Assessment mission to recommend stepped up work on natural gas explo- ration, appraisal and development. Since then, nine vells have been - 5 - drilled on the Meskala deposit, vith overall disappointing results. Based on these nine exploratory vellu, recent estimates have been revised downward from 300 bcf to 35 bcf for proven gas reserves, and from 20 million barrels to 1 million barrels of condensate reserves. Recent drilling in the adjacent field of Zelten has resulted in only a marginal discovery. Yet, when the proven reserves of Meskala and Zelten are added up, they represent about three times tne existing level of natural gis production which has remained stable since 1981 at about 85 million mJ/ year. Petroleum and Petroleum Products 1.17 Petroleum continues to dominate commercial energy supplies, representing more than 80% in recent years. Domestic crude oil pro- duction is still insignificant -- less than 20,000 tons a year -- and dwindling. The balance of hydrocarbon supplies has to be imported, 95% of which is in the form of domestically refined crude oil. These imports currently absorb more than 50% of export revenue. Between 1981 and 1984, the volume of hydrocarbon imports increased by 5%. However, the dollar value of these imports diminished by 20%, because of declining inter- national oil prices. The domestic value of these imports, by contrast, increased by about 43% as a result of the 35% depreciation in the dirham. 1.18 Given the present lack of economically viable energy resources and despite energy diversification and conservation efforts, petroleum vill be the principal fuel in Morocco's energy balance for years to come. As a result, the country has intensified petroleum exploration efforts with assistance from international oil companies. These efforts continue as the hitherto explored areas represent a small portion of the country's potential -- only one fifth of the on-shore sedimentary basins of 350,000 sq. km, and 25 off-shore exploration vells along 3,500 km of sea shores. 1.19 Morocco has two refineries: Société Anonyme Marocaine de l'Industrie du Raffinage (SAMIR) and Société Chérifienne des Pétroles (SCP), with nominal capacities of 6.75 million tons per year (tpy) and 1.2 million tpy, respectively. The question of low capacity utilization, especially in the SAMIR refinery, arose during the 1982 Energy Assess- ment. However, a lube oil production unit which uses fuel oil as input came on stream at the complex in May 1984, and is expected to absorb eventually about one-fifth of the present fuel oil outputs, and thus improve capacity utilization. This lube oil unit will, furthermore, counterbalance the potentially adverse effec s on refining capacity utilization emanating from three sources: the slow-down of economic growth resulting in a slow expansion in domestic demand for petroleum products, expected at 2% per year; the restoration of hydro production as drought conditions subside, which would reduce ONE's fuel demand for com- bustion engines, presently about 25% of the refineries' output; and the expansion in cual-fired boilers in pover generation and cement, expected to reduce the incremental demand for fuel oil by about 1 million tons by 1988. In placing the oldest hydroskimming units on cold reserves, the -6 question of capacity utilization in the SAMIR complex is no longer relevant. 1.20 The refineries' yield pattern continues to match fairly closely the pattern of product demand, ts shown in Table 1.2. This iS because the demand profile is heavily skewed towards fuel oil (50%) and gas oil (27%), which are also the main outputs of the refineries' hydroskimming facilities. However, about 250,000 tons of low value naptha and some propane are exported each year, and some 150,000 tons of butane and additional fuel oil are imported. This situation is unlikely to change during the rest of the 19809. Other Supply Sources 1.21 Oil Shales. The 1982 Energy Assessment recommended deferring major commitments to the development of oil shale until engineering studies demonstrating a qatisfactory outcome vere completed. One such research and engineering project, financed by a World Bank loan, con- tinues to examine the feasibility of oil shale in an oil retorting test station at Timahdite and to conduct oil shale utilization studies. Furthermore, Shell International is completing the first phase of a series of pre-feasibility studies on the Tarfaya deposit. If results are positive, Shell might bui.ld a demonstration unit, possibly leading to the commercialization of r6torting technology. In the interim, the develop- ment of Morocco's oil shale reserves -- estimated at 6 billion tons of recoverable oil -- has been further stunted by declining international oil prices and more water shortages. This situation has caused the Government to cancel its ambitious plans to build an oil-shale power plant with an installed capacity of 1,000 MW and a large retorting plant vith a capacity of 10,000-20,000 bpd. Table 1.2: REFINERY YIELD PROFILES AND CONSUtMPTION PATTERNS (percentages) 1980 1984 Refinery Consumption RefInery Consumption Yield Pattern Yleld Pattern LPG 4.9 7.6 4.8 8.4 Gasoline 9.1 9.8 8.0 8.2 Naphta 4.4 - 6.5 - Kerosene 1.7 1.5 1.4 1.4 Jet fuel 6.3 6.4 4.6 4.9 Gas oll 28.3 29.4 26,6 26.7 Fuel ofl 44,2 45.3 48.1 50.3 Other 1.1 _ NA 100.0 100.0 100.0 1000. Source: Ministry of Energy and Mines. -7- 1.22 The reasonably positive and promising results that have been obtained by some countries (Finland, USA, West Germany) in the area of fluidized bed technology for combustion of low grade solid fuels (600 kcal/kg to 3,000 kcal/kg) have prompted a reconsideration of cil shale for direct combustion. The government has requested the World Bank to allocate the funds earmarked for studies remaining in the existing oil shales project (US$200,000) to finance the feasibility study of the application of this technology in the Timahdite area (15-20 MW pover plant). The objective is to generalize this technology by creating several small pover plants on various shale deposites, if and when oil prices firm up in the future. 1.23 Non-wood Renewables. Environmental conditions in Morocco are conducive to the development of several renevable resources, particularly solar and wind power, municipal waste recovery, and agricultural res^- dues. For example, solar radiation in the country exceeds 0.15 toe/m ; vind-speeds exceed 12 mph in 90% of the surface area, and the country bas large municipal vastes and agricultural residues which could be used to generate energy. The Centre de Développement des Energies Renouvelables (CDER) has recently made efforts to improve knowledge and exploitation of these non-wood renevable energy resources. 1.24 Another actor in the renevables area is the Rural Affairs Division of the Ministry of Interior, which has incorporated a UNICEF- financed photovoltaic technology into its water pumping equipment pro- gram. RAD claims that PV equipment is economically justified for wells less than 30 meters deep serving a amall population of 1,000-19500 persons. In such cases, PV pumps can advantageously replace oversized diesel equipment. In promoting renevable energy, however, the Rural Affairs Division has followed an in4oependent course of action from CDER's. The novelty of renewable energies and the need to establish viable options dictate that the efforts of the agencies involved 'n -losely coordinated. To this end, it is recommended that MEM take a ;dore active role in this coordination. B. Changes in Energy Uses 1.25 During 1981-84, commercial energy consumption increased at an estimated annual rate of 1.8%, which vas a substantial deceleration from the 1974-80 rate of 6.7%. The slowdown vas the result of policy deci- sions to increase energy prices and adopt energy conservation measures, and a general slowdown of economic growth. From an average annual growth of 6.0% during 1974-80, GDP growth fell to 2.7% during 1981-84. Com- bining these rates with growth rates of commercial energy consumption produces a gross estimate of the CDP elasticity of energy demand of 1.12 during 1974-80, which dropped to 0.67 during 1981-84. While the first figure was significantly above the 0.6-0.8 range of gross elasticity estimates for many developing countries, the second vas well within that range. Significantly, the picture was different for electricity -8- consumption, the growth of which was 9.6% in 1974-80 and 6.6% in 1981-84, resulting in an increase in the GDP elasticity of electricity demand from 1.6 in 1974-80 to 2.4 in 1981-84. 1.26 Partly in response to the recommendation made by the Energy Assessment Report, the Covernment raised the domestic prices of several energy products between 1982 and 1984. As nn overall average, (residential, commercial, industrial) electricity prices rose by 21%. Domestic coal prices for commercial/industrial use rose by 66%. Casoline pric._s rose by 28%; kerosene prices by 33%; gas oil prices by 30%; and fuel oil prices by 69%. At the policy-making level, therefore, the Government has demonstrated a willingness and ability to limit energy consumption through increased prices. 1.27 In addition, the Government also initiated a series of measures to conserve energy use (a national campaign, shortening the workweek and TV broadcasting, etc.). As those measures were recently introduced, they may not have had sufficient time to work through the system to reduce energy consumption markedly. A further reduction in the GDP elasticity of energy demand in the future, therefore, may be interpreted as a demon- strated success of energy conservation measures. Such an outcome, how- ever, remains to be seen. 1.28 Between 1981 and 1984, the largest energy consuming sectors maintained their relative positions in total energy use. Thus, the share of the household sector remained stable at 52%; industry's share dropped from 23% to 21%; the share of transport and services increased from 22% to 24%; and agriculture's share remained below 3% (Table 1.3). 1.29 Most of the household demand for energy continues to be met from traditional energy sources, which declined only slightly, from 84% to 82% of household energy consumption. All the other sectors consume only commercial energy, mainly in the form of direct consumption of petroleum products (69%) and electricity (27%). Computing the share of major fuels in the total energy use of each subsector revealed some interesting patterns. With the exception of agriculture, the relative share of petroleum in all other sectors declined markedly between 1981 and 1984, with t:ansport being highest in both years. The decline in the relative share of petroleum during that period was most significant in cement because of that sector's concerted effort to convert to coal. 1.30 The relative shares of the other fuels in commercial energy remained generally stable during 1981-84. Only coal's share increased, from 1.3% to 2.8% -- an indication both of its small initial role and the relatively rapid expansion of that role. While the use of coal and natural gas vas highly concentrated in a few sectors, the use of elec- tricity and petroleum products was distributed througheut the various consuming sectors, albeit unevenly. Coal use was concentrated in the cement and a few other industries, and natural gas use was concentrated in the phosphate industry. -9 Table 1.3: STRdJCTURE OF NIT ENER6Y CONSUMPTION (thousende toe) Commerclal £nergy Traditional Electricity Petroleum Energy Coal Naturel Cas (ONE Only) Products Total Consuming Sector 1981 1984 1981 1984 1981 1984 1981 1984 1981 1984 1981 1984 Industry - Phosphates -- -- -- -- 30 46 76 85 208 178 314 309 - Cement -- -- -- 78 -- -- 85 91 329 250 414 419 - Other -- -- 49 41 10 16 387 450 473 378 919 885 Transport and Services -- -- -- -- -- -- 157 204 1,460 1,707 1,617 1,911 Agriculture -- -- -- -- -- -- 62 65 143 160 205 225 Households 3,180 3,378 4 9 -- -- 252 331 366 409 3,802 4,127 Total 3,180 3,378 53 128 40 62 1,019 1,226 2,978 3,082 7,271 7,876 Sources and Notes: Data for 1981 cores from the Energy Assessment Report, Table 1.1, except for traditional energy and electricity; the latter obtained from ONE and does not include other sources of electricity generation. For 1984 from direct com- munications with Mlnistry of Energy, except for traditional energy. The latter, In both years, are Mission estimates, based on paras, 1.6, 1.7 of the text. 1.31 Overall consumption of petroleum products 2/ increased modestly (2.4%) between 1980 and 1984, although there was considerable variation in growth rates among individual products (Table 1.4). For example, transportation fuels (gasoline and jet fuel) bore the brunt of the squeeze in commercial energy consumption, while household fuel con- sumption (mainly subsidized LPG) increased more rapidly. The relatively large increase in fuel oil consumption mainly reflects an increase in the use of thermal generation, partly because of the expansion of installed capacity, partly to compensate for the drought-related drop in hydro capacity, and partly because industrial demand remained almost sta- tionary. The changes in petroleum product demand resulted from: (a) in- dustrial recession, especially in the phosphate industry; (b) conversion to coal; (c) large price increases in private transportation fuels; (d) price subsidies to LPG and electricity; and (e) demand management measures at the consumer level. 2/ Including fuel oil and gas oil used in electricity generation. - 10 - Table 1,4: TOTAL COUSiMPTION OF PETIRLEUN PRODUCTS <'000 metrlc tons) Annual Average Growth Rate Product 1980 1984 1980-84 (percentages) LF'G 284 348 5.2 Gasoline 371 337 (2.4) Kerosene 57 38 0.4 Jet Fuel 244 205 (4.3) Gas Oit 1,056 1,142 2.0 Fuel 011 1,1743 2 034 3.9 Total 3,757 4,123 2.4 Source: Ministry of Energy and Mines. - il - II. POLICIES & IuSTITUTIONS 2.1 Like many developing countries, Morocco has encountered diffi- cult economic problems since 1980 (para. 3). These difficulties have resulted in domustic budget cuts and reordering of national priorities. At the energy sector level, the government has adopted the long-term policy objective of reducing energy importe while attempting to meet energy needs in a cost-effee-tive way, consistent ;ith overall economic efficiency. 2.2 The government's principal energy sector objectives can be grouped into three categories: demand, supply, and sector organiza- tion. In the demand category, three priority government objectives have emerged: (a) economic pricing of energy products to encourage efficient energy use by intermediate and final consumers; (b) encouragement of interfuel substitution, where economically and technically justified; and (c) promotion of energy conservation in industry, households, and trans- port to reduce or control the rate of expansion of energy demand. 2.3 In the supply category, three priority government objectives have emerged: (a) development of domestic energy resources, when economically viable, and to the extent that investment resources are available; (b) increased efficiency of energy supply through improved management and procedures, increased maintenance, reduction of vaste or system losses, and retrofitting, upgrading or rehabilitation of existing equipment and facilities; (c) encouragement of private and community participation in investments in oil and gas exploration and development, reforestation and forest management, and renevable energy. 2.4 In the sector organization category, two priority government objectives emerged: (a) increased self-financing of national energy enterprises, to minimize or eliminate dependence on budgetary transfers; and (b) improved planning and coordination among energy agencies, par- ticularly in key areas such as investment priorities, interfuel substi- tution, electricity distribution, marketing of petroleum producta, and energy conservation. A. Demand Policies 2.5 The Energy Assessment found that domestic uil product prices, with the exception of LPC, vere above comparative import parity prices, but that domestic coal prices vere somewhat below. Electricity tariffs, which should cover the long run marginal cost of supply, vere only 48-77% of this level and did not accurately reflect differences in the cost of supply for various users and geographical areas. In general, the Assess- ment suggested that principles of economic energy pricing needed to be applied in order to give appropriate signals and conservation/substi- tution incentives to different classes of users. Over the last few years - 12 - the GOM has made a major effort to adjust the market prices of energy products according to changes in their economic costs. Petroleum product prices were raised above their import parity prices. Although elec- tricity tariffs were increased, they remained below economic costs and their structure still needs to be simrtified. Domestic coal prices have increased substantially, thus facilitating the sound financing of planned coal investments. The LPG pricing issue, however, has not yet been resolved; LPG prices have slipped further below their opportunity cost. 2.6 The actual price changes in domestic and imported energy between 1982 and 1984 are presented in Table 2.1. Domestic prices in dirhams, except for LPG, increased substantially. The same domestic prices expressed in dollars, however, declined in varying degrees except for fuel oil and domestic coal, which increased. For the most part these directional changes follow the changes observed in import prices, the reason being a 35% depreciation of the dirham. Table 2.1: PERCENTAGE CHANGES IN DOMESTIC AND IMPORTED ENERGY PRICES, 1982-84 Change in lmported Product Changes in Domestic Prices Prices (DH) (USS) (US$) Gasoline 27.5 -16.3 -13.0 Kerosene 33.5 -12.4 -1.7 Ges 015 29.9 -14.8 -7.7 Fuel 011 69.0 10.9 18.2 IPG 0.9 -33.8 -10.6 Imported Coal n.a n.a -4.3 Domestic Coal 65.7 9.0 -4.0 Source and Definitions see Table 2.2. 2.7 A comparison of domestic energy prices expressed in dollars with the import parity cost reveals several points (Table 2.2): (a) the domestic/import price ratio in 1982 exceeded one for all products except LPG; (b) the ratio declined for all products in 1984; and (c) the ratio in 1984 was slightly less than one for kerosene, but significantly below one for LPG. A domestic/import price ratio of less than one implies state subsidy for consumers, the size of which increases as the ratio falls further below one. The last point is especially relevant for con- sumers of LPC who were subsidized at least since 1982. The size of this implicit subsidy increased from $58 per toe or 13% of the opportunity cost in 1982 to $141 per toe or 36% in 1984. This action aimed at stabilizing retail prices (in dirhams) to encourage LPG consumption, in order to reduce the consumption of wood, the major cooking fuel. By contrast, kerosene was being subsidized only to a limited extent in 1984: $12 per toe, or only 3% of its opportunity cost. Whether the optimal strategy to meet household cooking fuel needs is to subsidize LPG, - 13 - kerosene or woodfuels, is an empirical question which will be answered by the proposed 8tudy on household energy strategy (para. 4.9-4.11). lable 2.2: PETROLEUM AND COAL IrOLESALE PRICES AND IMPORT PARITY EQUIVALENTS (per toe) November 1982 November 1984 DomestÎc7/ Omestic/ Import Import Import Import Product Domestic Prices Parity Ratio Domestic Prices Parity Rît'o (DM/toe) (S/toe) (S/toe) (OH/toe) (s/toe) (S/toe) Gasoline 6,149 981 416 2.36 7,842 821 362 2.27 Kerosene 2,833 452 415 1.09 3,782 396 408 0.97 Gas 011 3,059 488 351 1.39 3,973 416 _24 1.28 Fuel 011 1,498 239 187 1.28 2,531 265 221 1.20 LPG 2,413 385 443 0.87 2,435 255 396 0.64 Imported Coal 1,460 233 164 1.42 n.a n.a 157 n.a Domestic Coal 560 89 100 0.89 928 97 96 1.01 Definitions: 1. Domestic prices: In OH/toe are wholesale prices per unit converted Into toe, using conversion factors stated below; in S/toe, using the foilowing exchange rites: DH 6.2676/S for November 1982, and OH 9.5512/S for November 1984. 2. Import parity: c,i,f, November price quotations in dollars for Mohamsedia, multiplied by toe conversion factor, plus domestic handllng costs as follows: gisoline $3/liter; kerosene :10/liter; gis oll :5/liter; fuel oll S10/ton; LPG 5115/ton; cool S20/ton. 3. Conversion factors, one toe equals: 1326 l ters of gasoline; 1243 liters of kierosene; 1176 liters oi gis of1; 1.06 tons of fuel oll; 0.87 tons of UPG; 1.69 tons of imported steam coa; 2.00 tons of domestic cool. 4. Product speclfications, gasoline: 95 ron; kerosene: regular; gas oil: 48-52 diesel Index, 0.5 sulphur; fuel oil: h3avy, high sulphur; LPG: pressurizde; domestic coal: Jerada anthracite fines, 5,200 kcal/kg. Sources: 1. All 1982 figures are from the Energy Assessment Report Table 3.1. For 184, domestic prices in DH are from direct communications with Ministry of Energy and Mines, 2. Exchange rates used to express domestic prices In dollars are from International Financial Statistics. 3, Import prices (c,l,f.> are from the Worid Bank, Economic Analysis and Projections Department, Commadity Studies and Projections Division. 2.8 A comparison of electricity prices with long-run average incremental costs, as the relevant opportunity coast, revealed large sub- sidies in 1982 to all categories of electricity consumers. Low voltage consumers, such as households, were charged only half the opportunity co3t of electricity; high voltage consumers, such as manufacturing industries, were charged about three-fourths of the opportunity cost. While the opportunity cost of electricity for 1984 could not be cal- culated from the available data, there is some indication that the total volume of subsidy to electricity consumers may have grown over the two- - 14 - year period (1982-84). For example, output prices increased on average at about 21% during the period, while the input cost of fuel oil, which represents more than half the operating cost for thermal pover genera- tion, increased by 69%. Furthermore, fuel oil was the only fuel to show an increased opportunity cost internationally. Therefore, in the unlikely event that the subsidy per unit may have remained at its 1982 level, the total volume of subsidy is likely to have increased with the growth in electricity consumption. In any case, further efforts are needed to bring electricity tariffs into line with the long-run incre- mental cost of supply and permit ONE to finance the 20% portion of its investment program, as agreed with the World Eank. At present, it appears that ONE is unable to meet this target. 2.9 In the domain of interfuel substitution, a periodic review of fuel supply plans for industrial/power generation was recommended by the Assessment to make optimal use of the substitution and conservation potential. Since then, measures have been taken to effect changes in energy use for power generation, industry and households. Plans to convert industry to gas have been shelved because the Meskala field has not yielded the large expected gas output. However, as a second best solution, z major switch from fuel oil to coal has been initiated both in industry and power generation. Further changes may take place if size- able natural gas reserves result from the present exploration efforts, or if international oil prices continue to decline. 2.10 In the forefront of the coal substitution effort have been ONE and the cement plants, influenced by two major considerationst (a) The price differential between coal and fuel oil was becoming more pronounced. In 1982, while the import parity of fuel oil vas 14% higher than the import parity of coal, that difference increased to 41% in 1984 (Table 2.2). However, the continued decline of oil prices during 1985 may have already reduced that differential and thus dampened efforts for further coal con- version; (b) Conversion investments vere relatively minor for several industrial and thermal installations, in the range of DH 25-50 millirn, because their boilers had previously burned coal. 2.11 ONE started burning coal in the multifuel 60 MW Unit II of the Roches Noires thermal plant in 1982 Lnd it nov consumes between 150,000 and 200,000 tons of coal a year. Units III and IV (150 MW each) of the Mohammedia plant, vill begin operating by mid-1986; these tvo units will require 800,000 tons of coal per year. The design of Mohammedia' s extension allows conversion from coal to gas or oil according to market conditions. The cement industry initiated its conversion to coal in 1983, starting with the Cadem (Meknes) and the Lafarge (Casablanca) plants. Both these plants were already fitted vith coal burning fur- naces. Conversions involving new equipment were introduced in two other plants: Agadir in September 1984, and CIOR in February 1985. The - 15 - remaining eight cement plants may convert to coal during the next few years, depending on the availability of investment resourcesa the benefit/cost ratio associated with conversion investments in each plant and, in view of the recent decline in oil prices, the differential between fuel oil prices and coal prices. The mission therefore recom- mends that the coal conversion course in the cement industry be carefully orchestrated with the Coal Action Plan designed to organise coal con- version, importation, storagee and transportation in a closely coor- dinated fashion. 2.12 Interfuel substitution in the residential sector has been correctly regarded as a priority by authorities. The heavy use of fuel- wood by households, especially in rural areas, is mainly responsible for the rapid degradation of forest resources in some locations. Options which need to be actively explored include the encouragement of private village agro-forestry schemes and economically justified substitution by kerosene, liquid petroleum gas, and agricultural or municipal wastes (para. 2.15). 2.13 LPG has been promoted by the GOM as a primary substitute for biomass to meet householtd cooking energy needt, and LPG consumption has been increasing at an annual rate of 5.1% over the last few years, while growth of consumption of other petroleum products has generally lagged behind. 2.14 To stabilize LPG prices, the Government is constructing a large storage capacity in salt caves to hold buffer stocks and therefore reduce the seasonal variations in the price of pressurized LPG. To reduce the LPG subsidies, the GON is considering importing the significantly less expensive refrigerated LPG because it can be transported in large, 30,000 ton freighters, compared vith the 2,000-ton loads of pressurized LPG. A successful switchover to importing refrigerated LPG would reduce the import parity by about 13%. Nevertheless, due to the heavily subsidized domestic price of LPG, a gap of about 26% with the import parity would still continue. Despite this generous subsidy, estimated in economic terms at about $55 million, the present price of DR 35/13 KG bottle is still beyond the means of many households, especially in rural areas. In the final analysis, it should be noted that promoting the consumption of a heavily subsidized fuel such as LPG can only exacerbate the future load on the already burdened state budget. 2.15 Another viable option therefore needs to be found, and kerosene appears to offer one alternative. The import parity of LPG and kerosene per toe is about the same (Table 2.2). However, a number of factors seem to give kerosene an important edge: (a) kerosene stoves are simpler, less expensive, and easier to maintain and service; (b) the distribution system and household storage of kerosene are less elaborate; and (c) the domestic price of kerosene is almost identical to its economic costs, so that promoting kerosene use will not augment the burden on the state budget. Per toe, however, the domestic wholesale price of kerosene was consistently above the corresponding price of LPC. While the price - 16 - differential in 1982 was 17%, it increased in 1984 to 55%. In view of these considerations, the mission recommends that a household energy strategy study be carried out to determine the market potential for alternative substitutes including, but not limited to, LPG and kerosene, review least cost supply and storage options, and design efficient distribution channels (para. 4.9-4.11). 2.16 As recommended in the 1982 Assessment, the Government has also initiated a series of measures to conserve energy use. A campaign was launched in early 1984 to educate the public about the need to reduce energy vaste and economize on electricity and gasoline. In addition, more specific measures were adopted, such as shortening the work week to five days, shortening TV broadcasting time, advancing the clock perma- nently by one hour to shift the peak load on electricity consumption and applying selective power cuts to agricultural and industrial facilities during peak evening hours. While the last measure may appear to save enerrv, it can be potentially disruptive for the affected establish- ments. The extent to which these measures have affected energy use, particularly the use of electricity, is not accurately known, but it is estimated that the five-day work week will eventually reduce peak demand by 30-40 MW and the one-hour advance by about 30 MW in summer and 60 MW in winter. The test of effectiveness of such measures, as already stated, will be the extent of further reductions in the GDP elasticity of energy demand. 2.17 Despite these efforts, there appears to be further scope for energy conservation in industry and services. In industry, a recent Transenerg study of twelve factories and two mines suggested the existence of a potential for energy conservation in these production units ranging between 10% and 60%. The MEM estimates that these rates range only f rom 10% to 20%. The study, however, did not estimate the resultant savings in terms of foreign exchange. More importantly, the study did not estimate the required investments or their implied rates of return. MEM estimates that, in most cases, the resulting energy savings could pay for the required investments within about three years, implying attractive rates of return. A new law included in the industrial investment code of January 1983 offers investors DH 500 per toe saved as a result of investing in energy saving equipment, with a maximum of 20% of total investment value. LÎttle or no effort, however, was taken to conserve energy in the transport sector. 2.18 In the services sector, commercial buildings and hotels hold some promise for energy savings in vater heating, lighting and air con- ditioning, and architectural design. Hotels alone are estimated to consume about DU 50 million worth of energy products, 20% of which could be saved through investments in energy cooservation devices which have typical payback periods of no more than three years. Energy conservation in commercial. buildings and hotels has been slow in coming, partly due to a lag in information about the potential savings and partly to an absence of direct financial incentives. - 17 - B. supply Policies 2.19 The difficult economic situation and rising energy bill have led the government to intensify efforts to develop domestic energy resources and to encourage prospective investors. Thus, ambitious plans have been prepared to develop a vide range of domestic energy resources, including constructing additional hydro sites, expanding coal production, intensifying exploration of oil and gas, and harnessing the potential of wind, solar, and nuclear energy. 2.20 Although the utilization of all these resources is technically feasible and the technologies to exploit them are familiar, some formid- able constraints have prevented them from being developed. First, not all the available options were economically viable. Second, the neces- sary investment resources vere not readily available. For example, oil shale deposits are by far the 'argest national energy resource, yet they are not economically viable at a crude oil price of less than $35 per barrel. To benefit from economies of scale, nuclear power development requires enormous investments beyond Morocco's financial resources. With regard to renewables, their potential is mostly site-specific and equip- ment-specific. The general perception is that, by contrast with the reliability of commercial energy sources, renewables are "circumstantial" sources of energy. Particular constraints also limit the development of specific sources: frequent maintenance requirements in vindmills, market and institutional barriers facing solar vater heaters, and large site preparation and construction costs in hydro-electricity. 2.21 Faced vith these barriers to new investments, the government has focused largely on increasing the eçficiency of existing resources and facilities. In hydro, for example, there is a recognized need to optîmize the use of existing hydro sites through improved management and/or procedures. Hence the Ministry of Equipment has requested assis- tance in constructing an optimization model to better manage existing facilities and thus deliver more power generation. Technical assistance is proposed for this task (para. 4.12-4.13). Since 1980, ONE has introduced several measures in its pover generating plants to reduce pover losses and is conscious of the need to attend to losses in the transmission and distribution network. However, no systematic review has been made of the potential for reducing losses in electricity transmission and distribution. Preliminary data for the period 1980-84 indicate that transmission losses have remained at about the same level (7.0%) while distribution losses have varied among provinces and within provinces. For example, in 1983 distribution losses vere estimated at 5% in Kenitra and 8% in Rabat, and in the Rabat province during 1976-81, distribution losses in urban areas were about 6% and in rural areas about 8%. Technical assistance therefore is recommended to carry out a review of potential boss reduction in transmission and distribution and the associated investments required to achieve such reductions (para. 4.16). The World Bank has recently approved a loan to GOM to upgrade the facilities, improve the management, and expand production ac the Jerada - 18 - Coal Mines. The project envisages an expansion of output from its stationary level of 750,000 tons per year to about 1 million tons per year by 1988. 2.22 The 1982 Energy Assessment reaffirmed the importance of earlier government efforts to promote new joint ventures for oil and gas explo- ration. In parallel, developments in the Moroccan economy since then have demonstrated that, despite the concerted efforts of the government to expand domestic production of energy, not all the potential invest- ments can be implemented by the public sector. An increasing role thus has emerged for private enterprise, both local and foreign. It has been recognized that the private sector can provide capital, know-how, and management skills which are not readily available to government. Inter- ventiori by the private sector is thus increasingly welcome to supplement and/or complement government resources in a number of energy sub- sectors. For example, onshore and offshore exploration expenditures increased from US$43 million in 1981 to US$95 million in 1984. Half of the outlays were provided by ONAREP (with partial World Bank financing) and the other half by foreign investors. Following this increase, the GOM is planning actions to encourage further exploration of new areas, including the Atlantic coastal basins. Surveys of the hydrocarbon potential of selected areas in the country, based on analyses of existing geological and geophysical studies, vill also be carried out under the current World Bank petroleum project. 2.23 A series of new exploration agreements have been signed with large companies, including Amoco, Arco, Mobil, Esso, Princeton Geo- physics, Pennzoil, BHP and CIPC. These agreements vere made more attractive to foreign companies by two messures: (a) a prospective new hydrocarbon investment code that will offer appreciable tax incentives to petroleum investments has been developed by an interministerial commission. The code is being reviewed by the Covernment prior to presentation to the Parliament for ratification; and (b) a promotional program financed by the World Bank, which includes collection, interpretation and presentation of explo- ration data on several areas (South-Atlantic Offshore, Essaouira Offshore, Souss Onshore, the Hauts Plateaux, Tadla, the Pre-Rif, the Beni Znassen and South-Atlas). 2.24 The potential for private sector participation in the develop- ment of renewable energies is reasonably promising, but is equipment- and site-specific. Windmills are already serving the needs of small farmers in distant locations, though further development seems to be stunted by maintenance problems. In some locations with particularly favorable wind regimes (e.g., the Northeast or Southwest) there appears to be further potential for harnessing this energy utilizing wind turbines, which require less maintenance than windmills. Similiarly, the potential of solar energy in a variety of uses has Long been recognized, but the - 19 - commercial breakthrough needs to come from the private sector. Appli- cation of solar energy to vater heating appears to be relatively more promising in the commercial sector, particularly in hotels and public buildings. Hovever, the local private industry producing solar water heaters is still in its infancy, and its future is uncertain because of the difficulties with solar collectors. The locally built collectors are generally of poor design and quality, while the imported ones are often neither the best design nor affordable by local standards. Since 1980, the Moroccan market for solar vater heatefs has stagnated, and the total collector area has remained below 2000 m /year. Furthermore, while the dollar cost per square meter of imported collectors may have remained generally unchanged since 1982, the depreciatiot of the dirham has raiset the cost of imported collectors fro% DH 2500/m in 1982, at the time of the Energy Assessment, to DH 4000/m in 1985. As a result, some local firms have gone out of business. 2.25 The scope for private sector participation in reforestation and forest management also may be substantial. Forestry development has hitherto depended almost exclusively on state-managed industrial plan- tations, with the natural result that little progress has been made in commercial forest management. Furthermore, present government alloca- tions to the forestry sector allow only partial reforestation, with the result that about 20,000 hectares of forest have been lost each year over che last 15 years. The government recognizes the gravity of the situa- tion but is too constrained financially to increase allocations for the forestry sector, as vas recommeded in the Energy Assessment Report. One option to increase public investment resources for forestry development voul. be to increase the prices of all wood products. Neanwhile, the active participation of the private sector in reforestation and forest management may offer another, and not necessarily a mututally exclusive, option particularly if reforma are adopted to establish a frame of reference for private sector initiative. C. Energy Sector Organization 2.26 Although the GON has made commendable efforts to adjust domes- tic energy prices to promote energy conservation, it has been necessary to continue budgetary transfers to public energy enterprises such as ONE, ONAREP, and Ctl. A primary government objective now is to minimize or eliminate such budgetary transfers. To accomplish this the public energy enterprises need to become increasingly self-financing. Self-financing covers production and recurrent costs, as vell as recovery of investment costs. The financial problema of some of those enterprises are due in a large part to government arrears. For example, the refineries' financial situation has been poor for many years because of large arrears owed by the Caisse de Compensation (DH 1.15 billion in 1984 alone). Furthermore, petroleum product distribution companies have equally serious arrears problems with some major government institutions such as ONE, Royal Moroccan Airlines, and the Armed Forces. As a result, the distribution companies have depleted their stocks to levels too low to maintain the - 20 - very security of supply. Financial restructuring has become an urgent government priority not only in the energy sector, but elsewhere in *he economy as well. The operational implication of making public energy enterprises self-financing is to give them the flexibility to price their products to cuver their economic cost, including the recovery of invest- ment costs. 2.27 In the electric power subsector, an important corollary of economic LRMC pricing would be the enhanced ability of ONE to self- finance future investment projects. This would minimize the need for budgetary transferse which are at present not clearly delineated as recurrent or investment expenditures and, as such, do not encourage proper management and/or budget procedures. Making public energy enter- prises such as ONE financially self-sustaining might also improve the performance of those enterprises, enhance economic efficiency, and minimize the financial burden on the government budget. 2.28 Another emerging government concern is the need to improve energy planning and coordination among energy agencies. In several sub- sectors, the interests of more than one institution often overlap, leading to inconsistent and often conflicting policies; inefficient use of resources; protracted responses to pressing problems; or lack of focused accountability. Examples of overlapping responsibility abound in nearly all subsectors. In electricty distribution, responsibility is divided between ONE and the Regies, operating under the jurisdiction of the Ministry of Interior. In renewables, CDER, the Ministry of Agriculture, and Ministry of Interior are involved. In fuelwood, the Ministry of Agriculture and Ministry of Energy are involved. In hydro, the Ministry of Agriculture and Ministry of Equipment ara responsible. -there is every reason in the energy sector te attempt ta do more with less. Where possible, greater efforts are needed to reduce duplication and overlapping responsibilities in the various energy sector agencies. 2.29 As recommended in the Energy Assessment Report, the government is attempting to clarify the respective roles of ONE and the Regies through a new electricity code which sets out the responsibilities of the principal institutions in an integrated system. Attempts are also being made to standardize equipment and spare parts to simplify coordination of the maintenance process and minimize the associated costs. The Govern- ment is further interested in identifying redundancies and gaps in the electrical power distribution network. To this end, a study to reduce technical and non-technical power losses in transmission and distribution is proposed (para. 4.16). 2.30 To strengthen its centralized energy investment planning capa- bilities, the Ministry of Energy and Mines (MEM) has set up a planning unit vith USAID financing and technical assistance. This unit has devel- oped a micro-computer-based planning support system for energy project appraisal and policy development which should prove useful in the prepa- ration of the development plan for the energy sector. Relevant infor- mation on 121 energy projects in 25 activities was quantified and placed into the system to produce rapid, systematic, and economy-wide appraisal - 21 - of alternatives. The data base for the analysis pertains to 1980-81. As Morocco enters into the preparation phase for the new investment program, there is an urgent need to update the project's data base, re-examine some of the underlying assumptions, and reformulate policy scenarios in line with changes in the internal and external conditions which affect Morocco's energy sector. MEM, however, is not taking full advantage of the planning unit. Judging from its present staffing, the unit is not given the proper weight it might potentially assume. Assigning higher level staff to this unit can upgrade its function from the marginal training it now performs to an effective body capable of synthesizing and rationalizing investment decisions based on systematic criteria. - 22 - III. £UERGY IUVBSTNHNTS 3.1 The productive capacity of the energy sector at any given point is the outcome of cumulative energy investments. These investments go beyond expanding the direct output of energy products cr conserving energy use to include activities which affect the handling, storage and transport of domestic and imported energy products. Typically, invest- ments in these types of support activities are classified as "infra- structure" investments and in Morocco are handled through the Ministry of Equipment, the Ministry of Transport, or the Ministry of Agriculture. However, because these investments directly affect the performance of the energy sector they should be counted, at least within a planning context, as energy investments. As the 1981-85 plan is about the conclude and the 1986-90 plan about to start, this chapter takes a dual look at the energy sector's realized investments and at planned investments. A. Realized Energy Investments 3.2 The Government is in the midst of collecting and preparing data to compare achieved energy investments with targets set out in the begin- ning of the 1981-85 Plan. Plan targets show a total of DH 9.3 billion distributed among four subsectors as follows: 48% for electricity, 36% for oil and gas, 13% for oil shale, and 3% for coal. Available figures on achieved investments at the end of 1984 and ongoing investments during 1985, cannot be easily compared with initial targets because of the vide- ly variant price bases which those figures reflect. While the targets vere stated in constant prices of the year the Plan was formulated, figures on achieved or ongoing investments refer to accumulated annual investments in current market prices. A proper comparison must, there- fore, wait for the appropriate deflation of achieved investment figures. 3.3 Hovever, it is possible to reach tentative conclusions with the imperfect data presently available. By the end of 1985, total energy investments of about DH 7.2 billion in market prices during 1981-85 will have been achieved. The first conclusion, therefore, is that the short- fall in achieving energy plan targets must have been substantially more than the 20% which would be obtained from a mechanical comparison of DH 7.2 billion with the Plan target of DH 9.3 billion. With factor costs increasing at an average of at least 10% a year during 1981-85, and the time profile of energy investments generally unknown at present, it would be rather surprising if the shortfall, in constant terms, turns out to be less than 40% of Plan targets. This relatively large shortfall seems to coincide with the successive worsening economic conditions and the increased tightening of the resource constraint since the time the Plan targets were being formulated. Within this total, however, the picture varies considerably for the individual subsectors. - 23 - 3.4 As already indicated, the electricity subsector vas targeted to absorb the largest share of total planned investments -- about one- half. Mission background calculations tentatively suggest that the investment shortfall in the electricity subsector is likely to be of the same ordter of magnitude as the investment shortfall in the energy sector as a whole. For this reason, electricity is likely to end up absorbing about one-half of total energy investments achieved during the 1981-85 Plan period. The oil and gas subsector vas expected to absorb about one- third. Even though an investment shortfall of about 20% is likely to occur in this subsector, its relative share is likely to be higher than originally targeted -- close to one-half. The increase comes from a switch in investment priorities away from oil shale, in accordance vith the recommendations of the Energy Assessment Report. Only minor invest- ments have hitherto been carried out in oil shale and coal, the combined value of which would be no more than 4% of total achieved energy invest- ments. While the shortfall in investment expenditures is a welcome matter in the case of oil shale, it is a serious matter for coal devel- opment, because it implies a longer delay in attaining short-term coal production targets, which in turn implies greater coal imports than orginally planned. As woodfuels typically fall under the forestry domain, their investments would, by definition, be part of agricultural investments. To the extent that woodfuels comprise a significant portion of domestic energy sources, forestry investments should be analyzed, at least partly, in the context of energy investments. No such data is integrated into the information flows of MEM. 3.5 Within each subsector, substantial variations between actual and planned investments for individual components are most likely to emerge. Within the electricity subsector the largest shortfalls will emerge in hydro generation. Distribution and rural electrification are likely to come closest to meeting their targets. Within the oil and gas subsector on the other hand, refining and exploration may come closest to achieving their targets, but in the case of refining, cost overruns are likely to figure prominently. In contrast, distribution and LPG faci- lities wil;' most likely fail to meet their targets, and the shortfall is going to be particularly large in the latter. One possible explanation is the large implicit transfers to subsidize LPG consumption, and the reluctance of the government, in view of the widening gap between LPG prices and its economic cost, to pursue investments which would permanently drain the state budget. B. Energy Investment Strategy 3.6 Morocco is in the process of preparing its forthcoming invest- ment program so this is an opportune moment to examine the emerging outlines of planned investments in the energy sector. For such an examination to be satisfactorily carried out, a systematic framework needs to be established to evaluate energy investments against one another and to rank them according to agreed criteria. Notwithstanding the major energy policy lines articulated t'y the Government and high- - 24 - lighted in Chapter (II), there is still a need to develop a comprehensive framework which goes beyond the mere listing of possible policy options to contrasting social costs and benefits associated with such options. The absence of sector-wide criteria to guide the ranking and choice of energy investment projects becomes especially glaring and the need for such criteria especially pressing when policymakers face many claims on investment resources at a time of tight resource constraints. Only a limited number of projects can be chosen. The basis for making the choice needs to be as systematic as possible. 3.7 Clearly, the recent installation of a computerized energy planning model in MEM is a step in the right direction. However, for the model to become the effective planning tool it is designed to be, high- level decision mzkers in MEM and elsewhere need to be sensitized to the potential use and application of such model. Only then would it be possible to generate a meaningful demand for the services of the energy planning unit, and only then can the model be integrated in the decision- making processes of the energy sector. 3.8 As recognized in the design of the existing energy planning model, however, no easy solutions exist. The establishment of investment criteria is a typically controversial process to arbitrate conflicting claims on resources and to negotiate least unsatisfactory solutions. Economic, social welfare, and political principles enter the formulation of investment criteria, whether among broad sectors of the national economy, or vithin given sectors. For such criteria to be effective in allocating national resources, they must come from within the indigenous political process. Such criteria are being sought at present. 3.9 For the energy sector, guidelines for policy formulation and investment choices are likely to be shaped according to the following principles: (a) Except for price adjustments, the pursuit of energy demand policiea can only be done as an integral part of the energy investment program. Investments are the vehicles to effect either interfuel substitution (adding special features to existing equipment, designing adjustable equipment, or con- structing the requisite infrastructure) or energy conservation (retrofitting, upgrading, fine tuning, etc.); (b) Increasing supply efficiency may involve investments embodied in modified equipment design or investments in restructuring and/or reorganizing existing production arrangements; (c) In developing domestic energy resources, the required criteria should articulate the costs and benefits of available resources: forestry, hydro, coal, hydro-carbons, shale, and renewables. 3.10 Given the conditions of the Moroccan economy, it seems sensible to establish the objective function of energy strategy in terms of - 25 - minimizing the energy cost for the economy as a whole. This requires contrasting the economic costs of importing commercial energy producti with the economic costs of producing the energy domestically from tradi- tional, commercial, or renevable sources and/or saving energy in existing production facilities. While calculation of the economic costs of feasible options may be carried out using rigorous shadow-pricing methodology, a practically-based approach using simple judgement about broadly costed options appears more realistic. Thus, in minimizing the aggregate energy cost, investments in energy generation and energy savings should be tied together in a continuum based on rough estimates of the investment cost per unit of energy generated/saved. So far as investment resources are concerned, it therefore should make no dif- ference whether a million dirham is allocated to generate additional energy or save on the use of existing energy. However, it makes a difference for the energy balance. To help generalize the existing frame of reference to rank energy investments on a national scale, the mission recommends that the Energy Planning Unit of MEM organize and update its data files on the following items: (a) the investment and recurrent costs associated with interfuel substitution possibilities and the resultant stream of foreign exchange savings associated vith the same level of energy output; (b) the investment and recurrent costs per toe saved through introduction of energy conservation methods in the major subsectors, and the resultant stream of foreign exchange savings; (c) the investment and recurrent costs per toe produced through measures of improved efficiency in supplying energy products; and (d) the investmtnt and recurrent costs per toe produced from alternative domestic sources. 3.11 Such information would make it possible to establish the least- cost energy development/saving program, which integrates the above aspects of energy demand and supply in a continuum. It will then be possible to guide energy investments in a rational way, compatible with the growing demand for energy and the increasing shortages of resources. C. Planned Energy Investments 3.12 Nearly all planned energy investments in Morocco at present aim at increasing energy output. By implication, this ignores the expe- riences of a number of countries which have suggested that investments in energy efficiency are considerably less per t.o.e. and the associated gestation lags substantially shorter. These investments are potentially viable, whether introduced in energy producing or energy facilities; they - 26 - span several options such as interfuel substitution, conservation, overhaul ng, restructuring, and reorgfnization. For this reason, it appears that Morocco's present energy development program la not on a lesat-cost path. To redresa this deficiency, energy efficiency invest- ments should be integrated in the present plan formulation. The mission, therefore, strongly recommends the introduction of a certain percentage of total energy investment allocations for investments in energy efficiency. That percentage may be determined through an iterative process, as is being done in other countries. 3.13 Details of this allocation to energy efficiency investments should emerge from the update recommended in para. 3.10 above, items (a),(b) and (c). In the following, however, some investment alternatives to expand energy resources are identified, and recommendations made. The investments cover forestry, hydro and electricity, coal, oil and gas, oil shale, and non-wood renevables. No investments in nuclear energy are being planned. Nevertheless, judging by the convention signed with SOFRATOME, the Covernment is continuing with feasibility studies and site identification for nuclear power development. 3.14 Fuelwood. If fuelwood-related investments are te succeed, they must effectively address the financial and institutional constraints. options for curtailing deforestation include strengthened forest resource management, the diversion of taxes on imported wood products to forest investment and the development of substitute household fuels. Although considerable potential exists for improved forest management and increased investment, the experience of other countries suggests that the central government vill be hard-pressed to achieve the necessary doubling of reafforestation efforts. A shortage of finance, competition from agricultural interests for suitaWle land, resistence from the local population to efforts which limit accesa to recently reafforested lands for grazing, and the tradition of collecting wood for free all limit the effectivenesas of central government activity. A novel formula therefore is needed to bring in more financial resources and break through the formidable institutional barriers. Typically, the formula will not be limited to woodfuels but vill cover the commercial development of wood resources, including woodfuels. Models for commercial development of wood resources, for example in the U.S., Canada, Finland, or Sweden, may prove quite instructive and adaptable for Morocco. 3.15 Hydroelectricity. The 1981-85 Development Plan envisaged the construction of six hydroelectric sites (total capacity 629 MW) for an investment of DR 888 million, or lOZ of planned energy investments. Seven additional projects (218 MN total) vere being prepared for the folloving plan (1986-90). Rowever, the only project started during 1981- 85 vas construction of the Amougguez plant on the Chouarit Dam, vith a potential energy capacity of 67 MW. Other hydroelectric work since 1981 has been directed exclusively towvrds completing projects which had been initiated under the preceding (1978-80) plan, namely completion of the Oued El Makhazine (lx36 MW) and Al Massira (2x64 MW) projectse. - 27 - 3.16 The Assesoment mission recommended a reviev of the economic justification for some of the multipurpose hydro projectu, and the estab- lishment of an optimal development schedule for these sites. Completion of the remaining five sites included in the 1981-85 Development Plan 3/ has been postponed because the multipurpose nature of these sites carried with it: (a) uncertain economic viability. Most hydroelectric plants vere established after the construction of dams. Hence, their economic rates of return were assessed on an incremental basis, which did not take into account the costs of building the dam. In contrast, the building of new hydroelectric stations has to be considered simultaneously with the construction of a multi-purpose dam, which makes it more difficult to achieve an acceptable rate of return; (b) large capital outlays for dam construction and long gestation periods; and 6c) institutional bottlenecks in coordinating the work of pover, agricultural and vater authorities involved in the projects, and therefore difficulties in efficiently programming, budget- ing and implementing projects. 3.17 In viev of these constraints, the CON has decided to focus on improving the management of existing multipurpose dams in parallel vith launching new projects. The Ministry of Equipment, which recently has been entrusted with the responsibility for integrating the management of hydro-sites, is seeking assistance to optimize vater use for irrigation, potable vater supply, and energy production (para. 4.12-4.13). 3.18 The development of small hydro resourcas is another facet of the intensified national effort to harness all possible sources of energy. The CON has identified 175 small hydro sites, and some appear promising, especially those associated with small multipurpose develop- ment projects, and thus do not entail substantial sums for site pre- paration. Studies for five small hydro sites have been completed. In addition, ONE has carried out preliminary studies of about 30 sites of vhich three have been selected for development, one of which has already been financed vith USAID assistance as a pilot project. The site, nov producing 200 kW, had cost a total of $0.5 million, of which $200,000 was for modular equipment, and the rest for site preparation, training and technical assistance. Larger sites are estimated to cost significantly less per kV, on account both of economies of scale and learning from the pilot project. The mission recommends the formulation of a national plan for small hydro development (less than 3MW) vhich vould integrate previous disconnected studies, fill existing gaps, determine socio- 3/ (M'Dez: 52 MWS Matmata: 241 MW; Dchar El Oued: 92 MV; EL Menzel: 148 MW; and M'Jara: 240 MW). - 28 - economic and technical criteria for hydro development, and establish priority ranking among proposed sites (para. 4.17-4.18). 3.19 Thermal Power Generation. By mid-1986, thermal power capacity will expand as the coal-based Units III and IV of the Mohammedia power plant are installed (150 MW each). Longer term capacity expansion plans have been revised on the basis of a lower demand growth scenario (7% per year instead of 9.5Z). However, the revised growth scenario continues to be high according to estimates recently carried out by the World Bank, given the recent large reductiori in GDP growth targets. However, ONE has 8cheduled construction of two 300 MW units designed to be able to burn coal, fuel oil, or natural gas. Although the site at Mohammedia has been prepared for their installation, ONE, for environmental reasons linked to the unloading of codl shipments, is considering locating them at Jorf Lasfar. From the outsete Moha.media was identified as the optimum site for expanding coal-fired thermal generating capacity because of its port location. Soon, barring no major changes in the relative prices of fuel oil and coal, the operation of Mohamedia III and IV would call for the importation of about 800,000 tons of coal per year. Importing these quantities through ports other than Mohammedia will result in a sub- stantial cost increase for ONE and a major infrastructure bottleneck for the economy. The Mission therefore recommends that the Mohammedia option be examined carefully1 taking environmental factors into consideration. If the decision is to allow Mohammedia to import coal, then the Jorf Lasfar option becomes highly questionable. If, on the other hand, the port of Mohammedia is not allowed to import coal, then the optimal location of the planned power plants (2x300 MW) would continue to be an open question. 3.20 Given the capacity shortage of the existing 225 kV transmission network, it will be necessary to introduce a new 400 kV transmission net- work which can transport the electricity generated in the future 300 MW units that are scheduled to come on stream in the early 1990s. The mission therefore recommends that a long-term plan be established for the national power generation and transmission network which will (a) sched- ule the introduction of needed 400 kV lines, and (b) optimize the use of the different voltage levels. 3.21 Should the electricity growth scenario be further revised down- ward, there would be no need to consider the one-to-three 90/100-MW combustion engines initially thought necessary to cover the temporary shortfall in power generation capacity resulting from the lead time between full recovery of the hydro system and the start up of new facilities. In the mid-1990Os, ONE expects to meet additional demand through construction of the hydro plants mentioned a ve (para. 3.15). 3.22 Coal. The Covernment, with World Bank financing, has embarked on a program to modernize and expand the Jerada coal mines. Although the geological conditions of the Moroccan coal deposit render its exploita- tion difficult and costly, the coal expansion program was prompted by several factors: (a) the Meskala gas prospects have seriously dwindled; (b) oil production is both small and drying up; and (c) the drop in - 29 - international oil prices rendered large-scale exploitation of domestic oil shale uneconomic. The coal development program envisages the expan- sion of Jerada coal production from the current level of 0.75 million tons to 1 million tons by 1988. Two older pits (Siege IV Est and Bassin Nord) are expected to close before 1990. Production expansion, there- fore, will originate from mechanizing and moderiting the newer Siege V pit, which currently produces only 400,000 tons/year. This prospective jump in production over a short period will be a major challenge to existing managerial and technical resources if the required investment resources of US$27 million are made available. 3.23 Charbonnages du Maroc (CdM) is considering several options to increase revenues from the Jerada production. These include a small thermal power plant (15 MW) for the rejects from the washing plant and a fines briquetting installation. An examination of these two options by the Bank has concluded that they would be uneconomic investments. It is therefore recommended that CdM not consider these investments further. By contrast, CdM completed a feasibility study on a washing facility for fine coal that would permit the commercial development of otherwise unusable rejects for power and cement industries, resulting in higher returns from the Jerada Coal for CdM. 3.24 Cs! is also considering a long term plan to expand national coal production to 2 million tons/year by developing the Siege VI part of the Jerada deposit. The mission recommends againct such a plan. As already mentioned, the quality of Jerada Ccal is poor and its economics marginal. In addition, CdM will have enough difficulty vith Siege V in expanding production to 1 million tons/year and maintaining it at that level. Expansion beyond 1 million tons/year will put undue strain and unrealistic demands on the managerial, staffing, and financial resources of CdM to the point of being a highly risky proposition. It is therefore recommended that plans to expand coal production beyond l million tons/year be disregarded. 3.25 The gap between coal production and consumption would be made up by imports which, as already noted, vill grow to 1.5 million tons during 1985-86 (para. 1.15). The existing port facilities, storage capacittes, and transport system may have been able to accommodate an increase in coal imports from 30,000 tons/year through 1980 to 300,000 tons/year in 1984 -- in a period of four years. To further increase the volume of coal imports to 1.5 million in two years is another matter, which would create an infrastructure bottleneck. The situation could potentially be exacerbated if a decision is made to block coal impor- tation directly into the Mohammedia port. The 800,000 tons/year of coal imports required for the newly established Mohammedia III and IV power plants would necessarily be diverted elsewhere, e.g. Casablanca, with unknown implications for handling the movement of other goods, import and export alike. The potential gravity of the situation warrants a compre- hensive examination of the coal importation and handling issue. The situation would still call for close scrutiny even if no additional demand for coal materializes as a result of further conversions during the rest of the 1980s. Whether these conversions take place remains to - 30 - be carefully considered, especially in view of the recent changes in relative energy prices. Since future coal use would also depend on the progress of coal conversion in plants and industries, an examination of coal conversion prospects should be an integral part of the recommended coal action plan. 3.26 Natural Cas. The Office National de Recherches et Exploitation Petrolières (ONAREPT has decided to cease exploration of the Meskala field and begin exploitation with the drilling of an additional produc- tion well, located next to the original discovery well. In 1982, it was thought that the Meskala gas eventually vould supply 60% of Morocco's boiler fuel consumption. However, such a large-scale substitution no longer appears possible, so ONAREP has had to scale down its gas utiliza- tion plans. After reviewing a number of options, the most attractive appeared to be to supply gas to the OCP phosphate plant at Youssoufia, using an existing pipeline from neighboring fields of Jeer and Kechoula. This project is being implemented because: (a) it requires a limited investment (US$10 million) since most boilers already are functioning with domestic natural gas and since the pipeline already exists; (b) the Meskala gas will supplement the gas supplies from the Société Chérifienne des Pétroles (SCP) to meet the demand of OCP as it converts existing dryers to gas and builds new gas operated units; (c) as production from the SCP fields diminishes, the use of Meskala gas will increase; and (d) the 250,000 m /day natural gas requirement seems within the range of expected output. The reservoir assessment for the project has been financed from an existing Bank loan for natural gas development. 3.27 Another gas utilization project, which is being reviewed by ONAREP, appears questionable. This project would supply 2 million tons of Meskala gas a year to the nearby coastal city of Essaouira for urban gas distribution and industrial utilization. However, a feasibility study financed by UNDP and carried out by SOFREGAS (France) found that the cost of domestic distribution would be relatively high, and estimated demand relatively low. The mission therefore recommends that the Egsaouira project be discarded. 3.28 Oil Shale. Under present world oil market conditions and the status of technology, exploitation of the country's considerable oil shale reserves cannot be economically justified. The potential is still being evaluated on several fronts, but the decline in international oil prices has seriously jeopardized the economic potential of oil shale utilization plans. One small project, financed by a World Bank engineer- ing loan, is assessing both the technical feasibility and the economic viability of oil shale retorting at the Timahdite deposit. An agreement was recently signed with KWV of the German Siemens Group to develop a new oil shale retorting process at Timahdite. In addition, Shell Inter- national is conducting technical studies on the Tarfaya deposit south of Agadir to determine the likely mining and retorting costs, and ONE is considering a small pilot plant (15-20 MW) using direct combustion of shale in electricity generation on the Timahdite oil shale deposit. The Government has asked that the feasibility study of this project would be financed from the funds remaining in a World Bank project for research - 31 - and engineering of oil shales (para. 1.21). The mission urges the con- cerned governmental agencies to carefully consider these shale utilisa- tion plans, which were conceived under different oil market conditions and under assumptions about future trends of oil prices that did not materialize. Economic rationality, especially in view of the present financial squeeze, calls not only for discarding large oil shale proj- ects, but also for carefully considering small projects as vell, espe- cially where government resources are involved. The ongoing research and engineering work should be reviewed and its activities kept in line with both the budgetary constraints and the medium/long term outlook for oil shale development. 3.29 Renewables. Although the theoretical potential of non-wood renewables in Morocco is rather sizeable, it is still far from being counted upon for serious development purposes in the immediate future. As typical of new technologies everywhere, there is a lead time between technical feasibility and commercial viability. It is for this reason that COM has entrusted CDER with the task of developing renevable energies. Some of these technologies such as solar water heaters, wind farms, biomass energy from crop and animal residues, and possibly, municipal solid waste are at the threshold of commercial viability. The prospects of derived fuels from municipal solid waste ippear encouraging in the conversion of existing garbage treatment plants from the low-price compost production to the higher price refuse derived fue's. For this reason, USAID vill fund a pilot project in Marrakech to test the commer- cial viability of this technology in the Moroccan context. It vill take at least three-to-four years to build, operate, and establish a reliable track record for this demonstration unit. 3.30 The Energy Assessment identified solar vater heating (SWH) as an area for future development because of high solar radiation, reason- able market potential, short payback period, and available capabilities to produce SWH equipment domestically. However, import taxes, dirham devaluation, and institutional constraints have nearly completely blocked the development of the market for solar vater heaters. With domestic SWH manufacturing facing such difficulties, the mission recommends a study of the commercial potential of SWH, especially in hotels and major public/ industrial buildings, and the necessary assistance for existing produc- tion facilities to improve the quality, reduce the price, and assure the maintenance of their products. 3.31 Morocco's wind regime has been studied extensively and is known to be favorable for energy use. A USAID-financed wind atlas is being compiled for 17 different sites chosen by the National Weather Service. CDER, on the other hand, has completed a review of the national wind resource. A wind speed of 8 meters per second at 10 m height is achiev- able in several locations. Moreover, this vind resource is reasonably well distributed on a year-round basis. Harnessing this resource through wind farm technology has been proven internationally. The technology uses especially designed wind turbines which, unlike traditional wind mills, do not require much maintenance. Such wind farms could be inter- faced vith the existing power grid or operated in a "fuel-saver" mode - 32 - with a decentralized diesel generating system. Preliminary estimates of the cost of electricity produced in wind farms in Morocco vary sub- stantially, depending on the type of turbines used, and the source of equipment. Research Triangle Institute of North Carolina, based on 15 European and U.S. turbines, has estimated the resultant cost of elec- tricity in Morocco to range between 4.4 and 7.7C/kWh. CWD, a Dutch research institute, estimates the cost of electricity resulting from use of Dutch turbines to be 4.5e¢kWh for a vind speed of 8 m/s a"d 3.1C/kWh for a wind speed of 9 m/s. Inquiries with other sources have resulted in similar estimates, which appear to be competitive with thermal generation using diesel and fuel cil. A proposed pre-investment activity would review the potential contribution of wind farm electricity to the national energy supply and propose a site-specific action plan for its development (see para. 4.21-4.22). 3.32 As indicated in the Energy Assessment Report, Morocco's agriculture provides a good potential for converting crop residues and cattle manure into biomass energy. Several constraints to harnessing this potential commercially were observed, however -- among them the collection of such residues, physical proximity of supply sources and final users, and the existence of other uses for those residues. While most privately held farms productively utilize those residues on the spot, state farms and possibly other large farms may often not take advantage of this potential. Although state farms comprise a small part of the country's total land holdings of 7.2 million hectares (only 3.4%), they provide a potential conservatively estimated at about 60,000 toe from crop residues. In addition, if some of the largest family land holdings are included in the estimates, they could double and possibly triple the resultant crop residues. A pre-investment study therefore is proposed to evaluate the potential contribution of crop and cattle residues in large land holdings for the commercial development of biomass energy as a substitute fuel in household, industrial, and commercial uses. - 33 - IV. A REOOIHUDHD PROGRAM OF PEBIrNV8TNEUT ACTIVITIES AND STIATEGY STUDIES 4.1 From discussions with nine institutions and agencies in Morocco, the ESMAP mission received a large number of requests for pre- investment activities and atrategy studies. These requests have been considered in the course of preparing this report, reviewing changes in energy sources and uses, examining policies and institutions, and analyzing energy investments. Gaps were identified in areas where no requests were made, but the mission recommended appropriate studies be carried out under the proposed program. Ten potential activities covering a range of energy subsectors have been identified as deserving priority attention. 4.2 Three criteria guided the formulation of the proposed program: (a) the activity included would result in one of three follow-up activities: investment projects; policy reform in the energy sector as a whole or any of its subsectors; improved management performance in the energy sector or any of its subsectors; (b) the pre-investment studies would produce carefully prepared project documents which the CON could present to development agencies and external sources of finance for possible con- sideration and funding; and (c) activities leading to policy reforms and/or management improve- ment are consistent with those emerging from GOM-Bank sector dialogue. 4.3 The program below consists of nine activities, seven of which are pre-investment work, at a total cost of about US$1.9 million. Financing of theses activities will be partly through the joint WNDP/Bank ESMAP Program, partly absorbed in Bank loans presently being prepared, and the rest presented to members of the Consultative Group for possible consideration. 4.4 The recommended program activities fall into three groups: strategy, power, and renevables. Estimates of program allocation to these three groups reflect the relative importance of each: strategy 65%, power 24%, and renewables 11%. The need to carry out these activities emerged in discussions with government agencies in regard to their specific plans, which are to be incorporated in the Development Plan. The activities thus address high national priorities. - 34 - A. Energy Strategy Studies Energy Efficiency Improvements 4.5 A recent study of a sample of twelve factories and two mines concluded that substantial energy cost savings appear feasible in Moroccan industry through energy conservation and fuel-switching. The study identified potential energy conservation measures in the sampled plants and estimated the resultant energy savings to range from 10% to 60%. The required investment to implement such efficiency measures were estimated to have attractive rates of return. Efficiency measures through fuel-switching will be studied in the context of the Coal Action Plan. Other potential energy efficiency improvements vill focus on the manufacturing sector including agro-industries. 4.6 The proposed study aims to: (a) review existing studies of energy conservation in manufacturing, including agro-industries; (b) identify representative plants in ten manufacturing and agro- industries for detailed energy efficiency audits; and (d) prepare a plan for investments in energy efficiency in the audited plants. Executing Agency: MEM Cost of Study: $300,000 Duration of Study: 16 Months Coal Action Plan 4.7 An increasing number of plants in power generation and cement have been utilizing coal. Despite the growth of domestic production, coal use expanded at a faster rate, pushing coal imports from less than 30,000 tons in 1980 to 300,000 tons in 1984. So far, the existing infra- structure was able to cope with this expansion in coal importation and handling. However, further expansion of coal imports to 1.5 million by 1986 appears imminent due to the start up of the Mohammedia Power Plants III and IV and the recent conversion to coal of cement plants. Even if no more power and industrial plants convert to coal, it is unclear how the country's infrastructure will handle this sudden and major expansion in coal imports; an infrastructure bottleneck may soon develop. 4.8 For this reason, a Coal Action Plan needs to be immediately considered. Elements of the Plan should include: (a) estimating an economically achievable market for coal: coal market projections based on conversion of end-users; options for coal importation, specific coal procurement options; (b) assessing infrastructure requirements to serve coal end-users: assessment of existing port capacities; coal storage facilities; ground transportation plan; regional coal distribution cen- ters; plant operations and storage; and ) (dollars) (dollars) Essence 27,5 -16,3 -13,0 Pétrole, lampant 33,5 -12,4 -1,7 Gasoil 29,9 -14,8 -7,7 Mazout 69,0 10,9 18,2 Carburéacteur 0,9 -33,8 -10,6 Charbon Importé noc. n.c. -4,3 Charbon local 65,7 9,0 -4,0 Source et définitions: Voir Tableau 2.2. - 15 - 2.7 La comparaison entre les prix intérieurs de l'énergie exprimés en dollars et les coûts de parité des importations fait ressortir plusieurs points (Tableau 2.2) : (a) le rapport entre les prix intérieurs et les prix d'importation pour 1982 était supérieur à l'unité, pour tous les produits exception faite du GPL, (b) le rapport a baissé pour tous les produits en 1984, et (c) en 1984, le rapport était légèrement inférieur à l'unité, pour le pétrole lampant mais nettement inférieur à l',unité pour le GPL. Un rapport prix intérieurs/prix d'importation, inférieur à l'unité, reflète de lourdes subventions d'Etat à la consommation, subventions dont le montant est inversément proportionnel au rapport des prix. Le dernier point concerne partic':IArement les consommateurs de GPL qui bénéfîciaient d'une subvention depuis au moins 1982. Le montant de cette subvention est passé de 58 dollars par tep, soit 13% du coût d'opportunité en 1982 à 141 dollars par tep, soit 36% en 1984. Cette action visait à stabiliser les prix de détail (en dirhams) pour encourager la consommation de GPL, ce qui permettra de réduire la consoommation de bois, principal combustible utilisé pour la cuisson des aliments. En revanche, le pétrole lampant n'était que partiellement subventionné en 1984 : 12 dollars par tep, soit seulement 3% de son coût d'opportunité. La détermination de la meilleure stratégie pour satisfaire les besoins des ménages en combustible pour la cuisson des aliments grâce à une subvention du GPL, du pétrole lampant ou bien des combustibles ligneux sera réalisée de facon empirique par l'étude proposée sur la stratégie à adopter en matière d'énergie à usage résidertiel tions d'investissements visant à développer les ressources énergétiques sont identifiées et des recommandations sont formulées. Ces investissements portent sur la sylviculture, l'hydro- électricité, le charbon, les hydrocarbures, les schistes bitumineux et les énergies renouvelables non ligneuses. Des investissements pour l'énergie nucléaire ne sont pas encore prévus. Cependant la convention signée avec SOFRATOME démontre l'interêt du Gouvernement à poursuivre des études de faisabilité et identifications de sites pour le développement de l'énergie nucléaire. 3.14 Bois de feu. Pour que les investissements en matière de bois de feu portent leurs fruits, ils doivent tenir compte des contraintes financières et institutionnelles. Il. y a plusieurs moyens de freiner la déforestation, notamment : le renforcement de la gestion des ressources forestières, l'allocation des taxes perçues sur les importations de produits ligneux pour des investissements dans la sylviculture, et la promotion de combustibles de remplacement pour les usages domestiques. Bien que les possibilités d'amélioration de la gestion forestière et d'augmentation des investissements soient considérables, l'expérience des autres pays donne à penser que le Gouvernement central aura du mal à atteindre l'objectif indispensable de doublement des effortr de reboi- sement. Le manque de moyens financiers, la concurrence pour l'uti- lisation Jes terres disponibles, la résistance de la population locale aux efforts visant à limiter l'accès aux terrains récemment reboisés, limitant par là-même les pâturages, et la collecte du bois tradition- nellement gratuite, sont autant de facteurs qui contribuent à limiter l'efficacité des mesures du Gouvernement central. Il est donc nécessaire de mettre au point une formule inédite permettant de réunir des res- sources financières plus importantes et de surmonter les obstacles institi'-ionnels gigantesques qui se dressent. Typiquement, la formule ne sera pas limitée aux combustibles ligneux mais couvrira le développement commercial des ressources en bois y compris les combustibles ligneux. Les modèles de développement commercial des ressources forestières fournis par des pays comme les Etats-Unis, le Canada, la Finlande ou la Suède, peuvent s'avérer fort instructifs et appropriés pour le Maroc. 3.15 Hydroélectricité. Le Plan de développement de 1981-85 envisageait la construction de six sites hydroélectriques (cppacité totale 629 MW) pour un investissement de 888 millions de dirhams, soit 10 du total des investissements prévus. Sept projets additionnels (218 MW au total) étaient en préparation pour le plan suivant (1986-90). Cependante le seul projet lancé en 1981-85 a été celui de la construction de la centrale d'Amouggez sur le barrage de Chouarit, d'une capacité de production de 67 MW. Les autres travaux hydroélectriques depuis 1981 ont exclusivement porté sur l'achèvement de projets lancés dans le cadre du plan préctédent (1978-80), à savoir l'achèvement des projets Oued Ed Makhazine (lx36 MW) et AI Massira (2x454 MW). - 32 - 3.16 La Mission d'évaluation énergétique avait recommandé de procéder à un examen de la justification économique de certains des projets polyvalents d'hydroélectricité, et dtélaborer un programme de développement optimal pour ces sites. La réalisation des cinq autres sites prévus dans le Plan 1981-85 3/ a été retardée, car la tuature polyvalente de ces sites a entraîné les obstacles suivants : (a) l'incertitude quant à leur viabilité économique. La plupart des centrales hydroélectriques ont été créées après la construction des barrages. Et partant, leur taux de rentabilité économique a été évalué sur une base marginal, qui ne tenait pas compte des coûts de construction du barrage. En revanche, la création de nouvelles stations hydroélectriques doit être envisagée parallèlement à la construction d'un barrage polyvalent, ce qui rend plus difficile l'obtention d'un taux de rentabilité acceptable; (b) des dépenses importantes d'investissement pour la construction de barrages; et (c) des goulots d'étranglement institutionnels au niveau de la coordination entre les autorités responsables de l'énergie, de l'agriculture et de l'eau participant au projet, ce qui rend difficile la programmation, l'élaboration du budget et la mise en oeuvre des projets. 3.17 Compte tenu de ces contraintes, le Gouvernement marocain a décidé de mettre l'accent sur l'amélioration de la gestion des barrages polyvalents existants tout en lançant simultanément de nouveaux projets. Le Ministère de l'équipement, qui a récemment été chargé d'intégrer la gestion des sites hydroélectriques, est à la recherche d'une assistance en vue d'optimiser l'utilisation de l'eau pour l'ir- rigation, l'approvisionnement en eau potable et la production d'énergie (par. 4.12-4.13). 3.13 La mise en valeur des petits sites hydroélectriques est un autre aspect de l'intensification des efforts nationaux vieant à aménager toutes les sources d'énergie possibles. Les pouvoirs publics ont iden- tifié 175 petits sites hydroélectriques, et plusieurs semblent pro- metteurs, spécialement ceux associés à des petits projets de dévelop- pement à but multiple et par conséquent dont la préparation n'entraine pas des déppnses excessives. Des études pour cinq petits sites hydro- électriques ont été réalisées. De plus, l'ONE a réalisé des études préliminaires sur une trentaine de sites dont trois ont été sélectionnés pour être mis en valeur et l'un d'entre eux a déjà été financé par l'USAID en tant que projet pilote. Le site, qui produit maintenant 3/ M'Dezs 52 MW; Matmatat 241 MW; Dchar El Oued: 92 MW; El Menzel: 148 MW; et M'Jaras 240 l!{. - 33 - 100 kW, avait coûté au total 0,5 million de dollars dont 200.000 dollars au titre d'un matériel modulaire, et le reste pour la préparation du site, la formation et l'assistance technique. Les sites les plus impor- tants coûtent selon les estimations nettement moins par kW, en raison des économies d'échelle réalisées et des leçons tirées des projets pilotes. 3.19 Production d'énergie thermique. D'ici avril-juin 1986, la capacité de production d'énergie thermique sera développée grâce à l'installation des Unités III et IV fonctionnant au charbon (150 MW chac- une) de la centrale de Mohammedia. Les plans d'expansion de la capacité à long terme ont été révisés sur la base d'une croissance plus faible de la demande (7% par an au lieu de 9,5%). Le chiffre révisé serait, d'après les estimations récentes réalisées par la Banque mondiale, encore élevé, étant donné la baisse importante des objectifs de croissance fixés récemment adoptée. L'ONE a cependant prévu la construction de deux unités de 300 MW, conçues pour fonctionner au charbon, au mazout ou au gaz naturel. Bien que le site de Mohammedia ait été préparé pour leur installation, l'ONE, pour ies raisons d'environnement liées au déchar- gement des navires charbonniers, envisage de les situer à Jorf Lasfar. Dès le départ, Mohammedia avait été identifié comme le meilleur site pour l'expansion de la capacité de production d'énergie thermique à base de charbon, en raison de son emplacement portuaire. En très peu de temps, à moins que des changements des prix relatifs du fuel et du charbon n'in- terviennent, l'opération Mohammedia III et IV exigerait l'importation de près de 800.000 tonnes de charbon par an. Or, l'importation de telles quantités de charbon par des ports autres que Mohammedia entraînerait des hausses substantielles de coût pour l'ONE et des goulots d'étranglement dans les infrastructures avez de graves conséquences pour l'économie. La mission recommande donc que l'option MoF, media soit examinée très soigneusement, en tenant compte des facteur_ ecologiques. Si l'on décide de permettre à Mohammedia d'importer du charbon, l'option Jorf Lasfar devient alors contestable. Si par contre, le port de Mohammedia n'est pas autorisé à importer du charbon, la question du meilleur emplacement pour les centrales électriques programmées (2x300 MW) reste alors posée. 3.20 Etant donné l'insuffisance de la capacité de transport du réseau actuel à 225 kV, il sera nécessaire d'introduire un nouveau réseau de transport à 400 kV capable d'évacuer la production des futures tranches de 300 MW dont la mise en service est programmée pour le début des années 90. La mission recommande donc d'élaborer un plan directeur à long terme pour la production nationale d'énergie et le réseau de transport qui : (a) prévoiera l'introduction de lignes de 400 kV, et (b) optimisera l'utilisation des différents niveaux de voltage. 3.21 Si le plan d'expansion de la production d'électricité est de nouveau révisé à la baisse, il ne sera plus nécessaire d'envisager l'installation d'une à trois turbines de 90/100 MW qu'on avait au départ jugé nécessaire pour couvrir le déficit énergétique temporaire lié au délai inévitable entre le récupération complète du système hydreulique et la mise en place de nouvelles installations. Au milieu des anrées 90 - 34 - l'ONE prévoit de statisfaire la demande supplémentaire en construisant les centrales hydroélectriques susmentionnées (par. 3.15). 3.22 Charbon. Le Gouvernement a entrepris, avec le financement de la Banque mondiale, la modernisation et la mise en valeur de la mine de charbon de Jérada, bien que les conditions géologiques du gisement houiller marocain rendent son exnloitation difficile et coûteuse. Le programme d'expansion de la ?roduction houillère a été motivé par plusieurs facteurs : (a) les céserves de gaz de Meskala ont baissé de façon substantielle; (b) la production de pétrole est faible et en perte de vitesse; (c) du fait de la chute des prix du pétrole sur le marché international, l'exploitation à grande échelle des schistes bitumineux du Maroc n'est plus rentable. Le programme de mise en valeur du charbon envisage l'expansion de la production qui passera du nivaau actuel de 0,75 million de tonnes à 1 million de tonnes d'ici à 1988. Deux puits plus anciens (Siège IV Est et Bassin Nord) devraient être fermés avant 1990. L'accroissement de la production proviendra donc du la méca- nisation et dt la moderrisatirn. du puits plus moderne du Siège V, qui ne produit actuellement que 400.300 tonnes par an. Si les 27 millions de dollars nécessaires pour 'ii.vestissement sont mis à la disposition du programme, la réalisation ae cette augmentation considérable de la production prévue sur une courte période posera un défi aux ressources humaines et techniques existantes au sein de CdM. 3.23 Les Charbonnages du Maroc (CdM) envisagent plusieurs options pour accroître les recettes provenant de la production de la mine de Jérada, notamment la construction d'une petite centrale thermique (15 MW) utilisant les déchets de l'usine de lavage et d'une installation de briquettage de fines de charbon. La Banque, après avoir examiné ces deux options, a conclu que ces investissements ne seraient pas rentables. Il est donc recommandé que les CdM les abandonne. Par contre, CdM a réalisé une étude de faisabilité d'une unité de lavage des fines de charbon qui permettrait la mise en valeur commerciale de déchets, sinon inuti- lisables, pour la production d'électricité et pour l'approvisionnement des cimenteries, permettant d'obtenir ainsi une plus grande valeur ajoutée pour le charbon de Jerada. 3.24 CdM envisage également un plan à long terme qui porterait la pruduction nationale de charbon à 2 millions de tonnes par an grâce à la mise en valeur du Siège VI dans le gisement de Jérada. La mission déconseille la réalisation de ce plan. Comme il a déjà été mentionné, le charbon de Jerada est de qualité médiocre et peu rentable. En outre, CdM aura suffisamment de difficultés pour porter la production du Siège V à 1 million de tonnes par an et la maintenir à ce niveau. L'scc-oissement de la production à plus de 1 million de tonnes par an exercera une pres- sion inutile et excessive sur les ressources humaines (gestion et dota- tion en personnel) et financières du CdM au point où cela deviendra une proposition très risquée. Il est donc recommandé que les plans visant à porter la production houillère à plus de 1 million de tonnes par an soient rejetés. - 35 - 3.25 L'écart entre la production et la consomation de charbon sera comblé par Les importations qui, comme, déjà noté, passeront à 1,5 mil- lions de tonnes en 1985-86 (par. 1.15). Les installations portuaires existantes, les facilités d'entreposage et le système de transport ont, semble-t il, été en mesute de faire face à un accroissement du volume des importations, qui jusqu'en 1980 était de 30.000 tonnes par an et qui quatre ans plus tard, en 1984, atteignait 300.000 tonnes par an. Ce- pendant, accroître à nouveau ce volume, le portant à 1,5 million de tonnes risque de créer des goulots d'étranglement au niveau de l'infra- structure. La situation pourrait être exacerbée si les autorités décident d'empêcher les importations de charbon directement par le port de Mohammedia. Les 800.000 tonnes de charbon importé nécessaires au fonctionnement des unités nouvellement créées de Mohammedia III et IV seront obligatoirement détournées ailleurs, à Casablanca par exemple, et on ignore encore les répercussions que cela aura sur le mouvement des autres marchandises, tant à l'importation qu'à l'exportation. La gravité potentielle de la situation exige de procéder à un examen approfondi du problème de l'importation et de la manutention. Même si la demande de charbon n'augmente pas à la suite des nouvelles conversions prévues pour la fin des années 80, une étude minutieuse de la situation est néces- saire. Il importe d'étudier soigneusement la question de ces con- versions, en tenant particulièrement compte des modifications récentes intervenues au niveau des prix relatifs de l'énergie. L'utilisation du charbon de bois dans l'avenir étant également liée au rythme de con- version des centrales et des entreprises du secteur industriel, un examen des perspectives de conversion au charbon devrait faire partie intégrante du plan d'action houiller recommandé. 3.26 Gaz naturel. L'Office national de recherches et exploitation pétrolières (ONAREU) a décidé de cesser l'exploration du gisement de Meskala et d'entamer les travaux d'exploitation avec le forage d'un puits productif supplémentaire situé à proximité du premier puits de découverte. En 1982, on pensait que le gaz de Meskala pourrait couvrir 60% de la demande marocaine de combustibles de chaudières. Une sub- stitution à 'ine telle échelle cependant ne paraît plus possible; l'ONAREP doit donc ramener ses plans d'utilisation de gaz à une échelle moins ambitieuse. Après avoir examiné plusieurs options, il est apparu que la solution la plus intéressante consiste à alimenter en gaz les usines de phosphate de 1'OCP à Youssoufia, au moyen du gazoduc qui les relie aux gisements avoisinants de Jeer et Kechoula. Cêt projet est en cours de mise en oeuvre car : (a) il requiert un investissement limi'é (10 mil- lions de dollars) puisque la plupart des chaudières fonctionnent déjà au gaz naturel d'origine intérieure et que le gazoduc est déjà en place; (b) le gaz de Meskala vicndra dans une première étape compléter les fournitures de gas de la Société Chér.fienne des Pétroles (SCP) pour répondre à la demande de 1'OCP qui convertit la totalité de ses fours de séchage au gaz et qui construit des installations de calcination au gaz; (c) dans une étape ultérieure le gaz de Meskala remplacera la production des gisemints de la SCP en épuisement; et (d, la consommation de l'OCP de 250.000 m de gaz par jour semble correspondre à la production envisagée pour Le gisement. L'étude d'évaluation de réservoir pour ce projet a été - 36 - financée à l'aide des fonds provenant d'un prêt existant, accordé par la Banque mondiale pour la mise en valeur du gaz naturel. 3.27 Un autre projet d'utilisation de gaz, qui fait actuellement l'objet d'un examen de l'ONAREP, semble contestable. En effet, ce projet fournirait 2 millions de tonnes par an de gaz de Meskala à la ville côtière avoisinante d'Essaouira. Ce gaz serait distribué comme gaz de ville et utilisé également par les indutries. Cependant, une étude de faisabilité financée par le PNUD et réalisée par SOFUEGAS (France) a indiqué que le coût de distribution de gaz aux ménages serait relative- ment élevé et la demande relativement faible d'après les estimations. La mission recommande donc que le projet d'Essaouira soit abandonné. 3.28 Schistes bitumineux. Dans les conditions actuelles du marché mondial et l'état d'avancement technologique actuel, l'exploitation des énormes réserves de schistes du pays n'est économiquement pas justifiable. Le potentiel est encore en cours d'évaluation à plusieurs égards, mais la chute des prix internationaux du pétrole a sérieusement compromis Le potentiel économique des plans d'utilisation des schistes bitumineux. Un petit projet, financé par un prêt d'étude technique octroyé par la Banque mondiale, évalue la faisabilité technique et la viabilité économique de la pyrolyse des schistes bitumineux du gisement de Timadhite. Un nouvel accord a été signé avec KWU du groupe allemand Siemens en vue de la mise au point d'un nouveau procédé de pyrolyse des schistes de Timahdite. Par ailleurs, Shell International a réalisé des études techniques sur le gisement de Tarfaya au sud d'Agadir afin de déterminer les coûts probables d'exploitation et de pyrolyse, et l'ONE envisage la construction d'une petite usine pilote (15-20 MW) qui uti- liserait la technique de combustion directe des schistes pour produire de l'électricité à partir du gisement de schistes bitumineux de Timahdite. L'étude de faisabilité de ce dernier projet serait financée par le réliquat d'un projet de la Banque mondiale de recherche et d'ingénierie sur les schistes bitumineuy (par. 1.22). La mission recommande vivement aux organismes publics concernés d'étudier soigneusement ces plans d'utilisation des schistes, plans conçus à un moment où les conditions du marché étaient différentes, et fondés sur des hypothèses dépassées quant à l'évolution future des prix du pétrole. Pour être économiquement rationnels, en particulier à la lumière de la crise financière actuelle, il est recommandé non seulement d'abandonner les grands projets relatifs aux schistes bitumineux mais de revoir également soigneusement les petits projets, surtout lorsque des moyens financiers publics sont en jeu. Il importe de passer en revue les recherches et études techniques en cours et de tenir compte des contraintes budgétaires et des perspectives à long et moyen terme, de développement des schistes bitumineux. 3.29 Energies renouvelables. Bien que théoriquement le potentiel des énergies non renouvelab.es non ligneuses du Maroc soit plutôt con- sidérable, sa mise en valeur à geinde echelle n'est pas envisageable dans l'avenir immédiat. Comme c'est partnut le cas pour les nouvelles tech- nologies, il y a un décalage entre la faisabilité technique et la fai- sabilité commerciale, raison pour laquelle lic pouvoirs publics ont - 37 - confié au CDER la tâche de mettre en valeur les énergies renouvelables. Certaines de ces technologies sont au seuil de la viabilité commerciale, notamment en ce qui concerne les chauffe-eau solaires, les fermes éoliennes, l'énergie de biomasse à base de déchets agricoles et animaux et, eventuellement, les ordures organiques ménagères. Ces perspectives visant à produire des combustibles à partir de ordures ménagères organiques semblent prometteuses pour transformer les usines de recyclage des ordures produisant actuellement du compost de faible valeur, en usines produisant des combustibles de plus grande valeur provenant des déchets. A cet effet, l'USAID financera un projet pilote à Marrakech qui testera la viabilité économique et technique commerciale de cette tech- nologie dans le contexte marocain. Il faudra au moins trois à quatre ans pour que cette usine de démonstration soit construite, entre en opération et fasse ses preuves. 3.30 L'évaluation énergétique a déterminé que le chauffage de l'eau à l'énergie solaire est un domaine de développement privilégié en raison du fort ensoleillement, de la taille importante du marché potentiel, de la courte durée d'amortissement des investissements et des moyens dont dispose le pays pour produire sur place le matériel nécessaire. Toute- fois, les taxes à l'importation, la dévaluation du dirham et les con- traintes institutionnelles ont presque totalement bloqué le développement du marché des chauffe-eau solaires. Etant donné les difficultés aux- quelles se heurtent les entreprises marocaines de fabrication de chauffe- eau solaires, la mission recommande la réalisation d'une étude sur le potentiel commercial des chauffe-eau solaires spécielement dans l'hôtellerie et les principaux bâtiments publics/industriels,. et l'octroi de l'assistance technique nécessaire pour permettre aux unités de production existantes d'améliorer la qualité, réduire le prix et assurer l'entretien de leurs produits. 3.31 Le régime éolien du Maroc a été étudié en détail et se prête tout à fait à des utilisations énergétiques. Une "carte éolienne" est en cours d'établissement pour 17 sites différents retenus par le Service météorologique national. Le CDER a par ailleurs établi un document sur le gisement éolien national. On trouve des vitesses éoliennes de 8 m par seconde à 10 m d'altitude dans plusieurs endroits au Maroc. Par ail- leurs, ces ressources éoliennes sont relativement bien réparties sur l'année. Il a été prouvé à l'échelle internationale, qu'il est possible de tirer partie de ces ressources par le truchement de fermes éoliennes. Cette technologie utile des turbines éoliennes spécialement conçues qui, contrairement aux moulins à vent classiques, sont d'entretien facile. Ces fermes éoliennes pourraient être reliéea au réseau électrique national ou fonctionner sur une base "d'économie de combustible' en liaison avec un système isolé de production d'électrité au diesel. D'après les premières estimations, le coût de l'électricité produite dans les exploitations éoliennes du Maroc -tarie sensiblement, en fonction du type de turbine utilisé et de l'origine de l'équipement. Research Triangle Institute of North Carolina, en se fondant sur 15 aérogénér- ateurs européens et américains, a estimé que le coût de l'électricité produite se situerait entre 4,4 et 7,7 cents/kWh. CWD, un institut de - 38 - recherche hollandais, estime que le coût de l'électricite produite à l'aide d'aérogénérateurs hollandais serait de 4,5 cents/kIh pour les vitesses éoliennes de 8 m par seconde et 3,1 cents/kWh pour les vitesses de 9 m par seconde. Les enquêtes qui ont été menées auprès d'autres sources ont donné des estimations analogues, qui semblent être compétitives par rapport à la production thermique au diesel ou au mazout. Une des activités de préinvestissement proposée examinerait la contribution potentielle de l'électricité d'origine éolienne à l'appro- visionnement énergétique national et proposerait un plan d'action spé- cifique pour la mise en valeur de chaque site (voir par. 4.21-4.22). 3.32 Comme il a été indiqué dans le Rapport d'évaluation énergétique, l'agriculture marocaine fournit un potentiel considérable pour transformer les déchets agricoles et animaux en énergie biomas- sique. Plusieurs obstacles se posent cependant à l'utilisation de ce potentiel sur le plan commercial, à savoir en particulier la collecte de ces déchets, l'implacement des sources d'approvisionnement à proximité des utilisateurs finaux et l'existence d'autres usages pour ces déchets. Alors que certaines exploitations privées utilisent ces déchets sut place à des fins productives, il est probable que les exploitations agricoles publiques et certaines exploitation privées de taille plus importante ne mettent pas à profit ce potentiel. Bien que les exploitations étatiques ne représentent qu'une petite portion des avoirs fonciers du pays (7,2 millions d'hectares) elles fournissent un potentiel énergétique estimé provisoirement a 600.000 tep provenant des déchets agricoles. Si, en outre, certaines des plus grandes exploitations familiales sont inclues dans ces estimations, la quantité des déchets agricoles récupérés pourraient doubler voire tripler. Une étude de préinvestissement est donc proposée pour évaluer la contribution potentielle des déchets agricoles et des déjections animales des grandes propriétés foncières, à la mise en valeur commerciale de l'énergie de biomasse en tant que com- bustible de substitution utilisé dans les ménages, et les secteurs industriel et commercial. - 39 - IV. PROCRAMME UCOIIAUDE D'ACIIVIT8S DE piUVSgmSTISSEmBWf eT D8TUDKS DE STRA8 TIES 4.1 Au cours des entretiens qu'elle a eu avec neuf institutions et organismes marocains, la mission de l'ESMAP a reçu un grand nombre de demandes pour la réalisation d'activités de préinvestissement et d'études de stratégie. Ces demandes ont été étudiées lors de la préparation du présent rapport; les modifications intervenues dans l'approvisionnement et l'utilisation de l'énergie ont été examinées, les politiques et institutions ont été passées en revue et les investissements au titre du secteur de l'énergie analysés. Des lacunes ont été identifiées dans certaines domaines pour lesquels il n'y a pas eu de requêtes; néanmoins, la mission a recommandé que des études appropriées soient entreprises dans te cadre du programme proposé. Neuf activités potentielles couvrant divers sous-secteurs de l'énergie ont été identifiées comme méritant une attention toute particulière. 4.2 Trois critères ont orienté la formulation du programme pro- pose . (a> les travaux déboucheront sur une des trois activités complé- mentaires suivantes : projets d'investissement; réforme des orientations générales du secteur de l'énergie dans son ensemble ou de l'un de ses sous-secteurs; amélioration de la gestion du secteur ou de l'un des sous-secteurs; (b) les études de préinvestissement produiraient des documents de projet soigneusement préparés, que le Gouvernement du Maroc pourrait soumettre aux organismes de développement et aux bailleurs de fonds extérieurs pour financement éventuel; et (c) les activités menant à une réforme de la politique énergétique et/ou à l'amélioration de la gestion du secteur sont compatibles avec les réformes découlant du dialogue entre le Gouvernement marocain et la Banque. 4.3 Le programme ci-dessous comporte neuf activités lont sept sont des études de préfinancement, pour un coût total d'environ 1,9 million de dollars E.U. Le financement de ces activités sera en partie assuré par le programme conjoint PNUD/Banque Mondiale d'assistance à la gestion du secteur de L'énergie (ESMAP), en partie absorbé au sein de prAts de la Banque en cours de préparation et pour ce qui est du reste, pe «enté aux pays membres du Groupe consultatif pour considération de financement. 4.4 Les activités du programme recommandé se répartissent en trois catégories : stratégie, électricité et énergies renouvelables. Les estimations relatives aux ressources qui seront affectées à chacune d'elles reflètent leur importance relative respective : stratégie (65%), électricité (24%) et énergies renouvelables (11%). La nécessité de réaliser ces activités a été mise en évidence Lors des entretiens que la mission a eus avec les organismes publics pour ee qui est de leurs - 40 - programmes spécifiques, lesquels doivent être intégrés au Plan de développement. Ces activités répondent donc à des priorités nationales de haute importance. A. Amélioration de stratégie en matière d'énergie Contrôle de l'efficacité énergétique 4.5 Une étude récente couvrant un échantillon d'usines (12) et de mines (2) a conclu qu'il est apparemment possible de réaliser des économies substantielles dans les factures énergétiques du secteur industriel marocain en introduisant des mesures de conservation et de substitution de combustibles. L'étude a identifié des mesures poten- tielles de conservation d'énergie dans ces usines représentatives et estime que les économies d'énergie qui en résulteraient seraient de l'ordre de 10 à 60%. Les coûts des investissements requis pour la mise en oeuvre de ces mesures d'efficacité semblent avoir des taux de ren- tabilité de ces investissements très attrayants. Les mesures d'effi- cacité appliquées par le truchement de la substitution de combustibles seront examinées dans le cadre du Plan d'action houiller. Les autres possibilités d'économies d'énergie seront étudiées tout particulièrement pour l'industrie manufacturière y compris les unités agro-industrielles. 4.6 L'étude proposée vise à : (a) passer en revue les études existantes sur la conservation d'énergie dans le secteur manufacturier, y compris les agro-industries; (b) identifier des usines représentatives dans 10 activités de fabrication et agro-industries pour des audits énergétiques approfondis et; (c) préparer un programme d'investissements au titre de l'efficacité énergétique dans les usines ayant fait l'objet d'un audit. Organe d'exécution : MEN Coût de l'étude : 300.000 dollars Durée de ''étude : 16 mois Plan d'action houiller 4.7 Un nombre croissant de centrales et de cimenteries utilisent le charbon comme source d'énergie. Certes la production nationale a aug- menté, néanmoins la consommation de charbon a progressé à un rythme plus rapide, faisant passer les importations de 30.000 tonnes en 1980 à 300.000 tonnes en 1984. Jusqu'à présent, l'infrastructure en place a pu faire face à cette hausse des importations et à la manutention du char- bon. Cependant, le Lancement des travaux de construction ; centrales de Mohammedia rIt et IV et la conversion récente des cimenteries au char- bon sont sur le point de porter les importations de charbon à 1,5 million de tonnes avant 1986. Même si aucune centrale ou usine supplémentaire ne se convertit au charbon après cette date, il n'est pas certain que l'infrastructure nationale sera en mesure d'absorber ce bond en avant des - 41 - importations de charbon et on risque de voir des goulots d'étranglement se former sous peu. 4.8 C'est pourquoi il faudrait envisager au plus tôt un Plan d'action houiller, qui comprendrait les volets suivants : (a) estimation d'un marché économiqtuement accessible pour le charbon : projections du marché du charbon sur la base de la conversion des utilisateurs finaux; possibilités d'importation, possibilités de passation de marchés spécifiques pour le charbon; (b) évaluation des besoins d'infrastructure pour desservir les utilisateurs finaux de charbon : évaluation des capacités portuaires existantes, installations de stockage de charbon; plan de transport terrestre; centres régionaux de distribution de charbo1., opérations et entreposage dans les usines et; (c) examen de la capacité institutionnelle; réformes de politiques nécessaires; amélioration de la gestion. Organe d'exécution : MEM Coût de l'étude : 500.000 dollars Durée de l'étude : 24 mois Stratégie gouvernementale en matière d'énergie à usage domestique 4.9 L'étude vise à élaborer des politiques cohérentes pour satisfaire les besoins énergétiques à long terme des ménages à un coût minimum. L'étude examine de façon empirique l'offre d'énergie à usage domestique ainsi que la structure de la consommation d'énergie par cette catégorie de consommateurs. Du côté de l'offre, l'étude analyse trois systèmes d'offre d'énergie à usage domestique : combustibles ligneux, produits pétroliers et électricité. Les objectifs de ce volet de l'étude sont : d'établir les coûts relatifs des combustibles à usage domestique à travers le pays, d'évaluer dans quelle mesure les combustibles de rem- placement pour les combustibles ligneux sont appropriés et identifier les goulots d'étranglement liés à cette substitution afin de formuler des politiques de l'offre adaptées. 4.10 Du côté de la demande, l'étude établit la structure de la consommation d'énergie dans les ménages. Alors que, à court terme, les combustibles à usage domestique sont complémentaires, à long terme ils sont concurrents. On pourra avoir une bonne idée de la possibilité de substituer des combustibles dans les ménages grâce à un examen représentatif de la structure de la consommation d'énirgie, stratifiée selon le groupe de revenus, le degré d'urbanisation, -la Localisation géographique et les conditions climatiques, entre autres variables. La préférence des ménages pour tel ou tel combustible de substitution est- une question empirique et sera mise en évidence par les résultats da l'étude. 4.11 Une stratégie de l'énerg4q à usage domestique émanera de l'intégration des systèmes d'approvisionnement en énergie à usage domestique, aux structures de-la consommation d'énergie par les ménages. - 42 - Organe d'exécution : KEM Coût de l'étude s 250.000 dollars Durée de l'étude : 24 mois Optimisation de la gestion des barrages 4.12 La plupart des sites hydroélectriques marocains ont été construits pour servir des fonctions multiples telles que la production d'énergie, l'irrigation et l'alimentation en eau potable. Des méthodes de programmation dynamique permettraient à la Direction de la recherche et de la planification de l'eau (DRPB) d'optimiser l'utilisation de l'eau et la production d'énergie, tant dans des condi-ions hydrologiques normales qu'en période de sécheresse. 4.13 La DRPE a déjà entamé des études d'optimisation sur sept barrages. Six autres barrages seront .nclus dans l'4tude proposée : Mohamed V sur l'oued Moulouya, Benel Ouidane sur l'El Abid, AI Massira sur l'Oum-er Rbia, Idriss ler sur l'Inaouene, El Kansera sur le Beht, Oued El Makhazine sur le Loukkos. Organe d'exécution : Ministère de l'équipement Coût de l'étude : 180.000 dollars Durée de l'étude : 20 mois B. Activités 4e préinvestissement dans le secteur de l'électrîcité Programme de renforcement du réseau de transport de l'énergie électrique 4.14 A l'heure actuelle, l'important réseau marocain de transport d'énergie électrique compte 2.670 km de lignes 225 kV, 965 km de lignes 150 kV et 6.490 km de lignes 60 kV. Les lignes 60 kV sont principalement utilisées pour la distribution locale d'électricité dans les grands centres de consommation. Les lignes 150 kV deviennent rapidement dé- suètes et sont progressivement remplacées par des lignes à 225 kV. Pour être conformes aux plans de l'ONE visant à augmenter la capacité de production d'électricité, il faut adjoindre, à terme, un réseau de lignes à 400 kV et renforcer, éventuellement, le réseau à 225 kV existant. 4.15 L'étude proposée s (a) examinerait les programmes d'investis- sement en transport de l'ONE et des Régies; (b) prévoirait l'introduction du réseau 400 kV requise pour les nouvelleu centrales; (c) définirait un plan directeur à long terme (1991-2005/10) pour l'installation de nouvelles lignes 400 kV sur la base d'une répartition optimale de la production entre les différents centres de consommation et; (d) déterminerait les modes d'utilisation et caractéristiques du matériel qui permettrait de réduire les pertes du transport. - 4j - Organe d'exécution : ONE Coût de l'étude : 350.000 dollars Durée de l'étude : 16 mois Réduction des pertes de transport et de distribution de l'électricité 4.16 Alors que l'ONE produit près de 90% des besoins en électricité du pays et en distribue une grande partie directement aux consommateurs finaux, 52% de cette électricité est distribué dans les grands centres urbains par une dizaine Régies autonomes. L'étude sur l'efficacité énergétique, qui a été proposée, évaluerait l'efficacité de l'ensemble du système au niveau de la distribution et du transport, depuis la centrale jusqu'au consommateur final et engloberait autant la jurisdiction de l'ONE que celle des Régies. A partir d'une enquête détaillée sur des échantillons représentatifs du réseau électrique prenant en considération plusieurs scénarios d'exploitation thermique et hydroélectrique, l'étude identifierait un programme visant à réduire les pertes techniques et non techniques au niveau du système et à améliorer les opérations de distribution d'électricité. Les travaux comprendraient, sur la base du diagnostic de l'échantillon, des études sur les réseaux de transport et de distribution, une analyse critique des normes et pratiques du système de distribution et un examen du service au consommateur comme le comptage et la facturation. Organe d'exécution : ONE/Régies Coût de l'étude : 15).000 dollars Durée de l'étude : 12 mois C. Activitéa de préinvestissement en matière d'énergies renouvelables Chauffe-eau solaires 4.17 Les excellentes conditions d'ensoleillement du Maroc indiquent qu'il serait possible de réaliser d'importantes économies d'énergie en utilisant des chauffe-eau solaires. Ce marché n'est cependant pas encore très important car : (a) les activités de promotion ont été insuf- fisantes; (b) les droits de douane élevés rendent la mise de fonds quasiment prohibitive; (c) le matériel techniquement adapté aux con- ditions marocaines fait défaut; (d) il n'existe pas de centres de fabri- cation, d'unités d'installation et d'entretien efficaces au Maroc; et (e) les systèmes d'incitations et la réglementation susceptible de favoriser le développement économique et l'utilisation de cette tech- nologie font défaut. 4.18 Il semble cependant que de meilleures conditions de production, des mesures d'incitation à l'utilisation et une vigoureuse campagne de promotion pourraient renverser la détérioration progressive de cette industrie naissante. C'est pourquoi, la mission recommande qu'on entre- prenne une étude qui : (a) permettrait de mener une étude générale du - 44 - marché des chauffe-eau solaires dans les secteurs résidentiel, com- mercial, institutionnel et industriel; (b) déterminerait la viabilité économique de l'utilisation des chauffe-eau solaires au Maroc; (c) dé- finirait un plan de production qui permetra de modifier et/ou d'améliorer les installations actuelles de fabrication et dtentretien des chauffe-eau solaires pour minimiser leur coût et les rendre techniquement fiables et; (d) formulerait des recommandations détaillées sur le financement des projets de démonstration et autres questions de politique générale d'ordre législatif. Organe d'exécution : CDER Coût de l'étude : 70.000 dollars Durée de l'étude : 6 mois Ferme éolienne 4.19 Sur la base des renseignements fournis par la carte éolienne, le régime du vent dans les provinces du Sahara et dans la région de Tanger semblent être suffisamment favorables pour envisager la possibilité de construire une ferme éolienne. Dans le Nord du Maroc, la production d'une installation de cette nature pourrait être intégrée au réseau national. Dans le Sahara, l'électricité d'origine éolienne pourrait remplacer l'électricité produite à base de diesel. Dans les deux cas, on pourrait faire appel aux techniques éprouvées de production d'énergie éolienne. 4.20 L'étude de faisabilité proposée : (a) analyserait les données disponibles sur les ressources éoliennes marocaines; (b) identifierait les sites les plus propices pour la construction de fermes éoliennes; (c) évaluerait leur potentiel de production d'énergie; (d) déterminerait le coût des investissements nécessaires et le coût en monnaie locale et en devises de l'opération par rapport au coût d'autres options; (e) esti- merait les possibilités de participation de l'industrie marocaine à la construction et à l'entretien de l'équipement; (f) sur la base des ré- sultats obtenus, l'étude choisirait un site a développer et; (g) éla- borerait un plan de suivi pour le développement des éoliennes dans le pays. Organe d'exécution : CDER Coût de l'étude : 70.000 dollars Durée de l'étude : 6 mois Utilisation des déchets agro-industriels 4.21 Le Maroc possède un secteur agro-industriel important et diversifié (1.5 million d'exploitations agricoles couvrant 7.2 millions d'hectares) capable de fournir une quantité substantielle d'énergie de biomasse à partir des résidus agricoles. L'utilisation de cette res- source énergétique potentielle dépend de plusieurs facteurs : facilité de ramassage, proximité de la demande et de la source d'approvisionnement et - 45 - utilisation de ces déchets à d'autres fins. Les exploitations agricoles publiques représentant 3,4% de la superficie agricole cultivée, seraient un point de départ idéal pour l'évaluation des excédents de déchets agro-indutriels, car elles sont de dimensions importantes (plus de 100 ha) et moins susceptibles d'utiliser leurs déchets à d'autres fins. Le potentiel énergétique de ces exploitations à elles seules est provisoirement estimé à 60.000 tep. D'autres grandes exploitations, telles que les grandes exploitations familiales, peuvent également être mises en valeur pour la production d'énergie de biomasse à partir des déchets végétaux et déjections animales. Un tel potentiel devrait, d'après les estimations, fournir au «oins 60.000 tep supplémentaires extraits des déchets agricoles. Les déchets agro-industriels pelletisés peuvent être utilisés comme combustibles par les ménages ou l'in- dustrie/commerce; s'agissant des ménages, le combustible tiré des déchets peut remplacer le bois de feu ou le charbon qui se raréfie et dans les industries et le commerce il pourra remplacer l'énergie importée. 4.22 L'étude proposée : (a) identifierait les exploitations agri- coles publiques et les grandes entreprises agricoles privées produ-sant des déchets en excédent pouvant être récupérés à des fins énergétiques; (b) évaluerait la faisabilité économique, technique et institutionnelle de la transformation en énergie des déchets agro-industriels, en tenant compte d'autres usages actuels et de l'importance du maintien de la fer- tilité des sols; (c) localiserait les sources de demande résidentielle et industrielle proches des sites de déchets agro-industriels; (d) sélec- tionnerait les exploitations étatiques et privées appropriées ayant les plus importants excédents de déchets agro-industriels; et (e) donnerait les grandes lignes d'une proposition viable, à savoir un plan d'usines pilotes de pellétisation des déchets à échelle commerciale, une analyse de la demande des ménages pour les combustibles tirés des déchets et la formulation de recommandations spécifiques pour les modifications industrielles requises avant l'utilisation de ces déchets. Cela devrait servir de base à des études de faisabilité détaillées qui aboutiront à la mise en oeuvre de projets d'utilisation des résidus agricoles. Organe d'exécution : CDER Coût de l'étude : 70.000 dollars Durée de l'étude : 6 mois - 46 - Annexe 1 Page 1 de 3 ACTIVITES D'ASSISTANCE TECHNIQUE AU SECTEUR ENERGETIQUE FINANCEES PAR LES PRINCIPAUX BAILLEURS DE FONDS Le groupe de la Banque mondiale rèalise des travaux d'assis- tance technique dans le cadre de plusieurs projets en cours relatifs à l'énergie : (a) Dans le cadre de deux prêts consécutifs dans lea sous-secteurs des hydrocarbures (S-18 MOR et 2271-MOR), les activités d'assistance technique suivantes ont été exécutées : - exploration de gaz dans le Bassin d'Essaouira et evaluation du gisement de Meskala; - renforcement des capacités techniques, gestionnaires et financières de l'ONAREP; - études sismiques et géologiques; - promotion de l'exploration pétrolière, y compri3 un nouveau code d'investissement pétrolier; - une étude d'utilisation du gaz.