Comparing What Triggered Renewable Energy Development in Jordan and Morocco

CLOSUP Student Working Paper Series Number 31 April 2018

Comparing What Triggered Renewable Energy Development in Jordan and Morocco Tyler Coady, University of Michigan

This paper is available online at http://closup.umich.edu Papers in the CLOSUP Student Working Paper Series are written by students at the University of Michigan.

This paper was submitted as part of the Winter 2018 course PubPol 495 Energy and Environmental Policy Research, that is part of the CLOSUP in the Classroom Initiative.

Any opinions, findings, conclusions, or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the view of the Center for Local, State, and Urban Policy or any sponsoring agency

Center for Local, State, and Urban Policy Gerald R. Ford School of Public Policy University of Michigan

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Tyler Coady PubPol 495 April 25, 2018 Comparing What Triggered Renewable Energy Development in Jordan and Morocco Abstract Despite lacking oil and gas resources and its accompanying wealth, Jordan and Morocco are leading renewable energy producers in the Middle East and North Africa. This research paper is a comparative case study that analyzes policy intent, policy implementation, investment solicitation, and financing structures to understand how Jordan and Morocco instigated large growth in renewables production before other nations in the region with significant fossil fuel resources did so, like Saudi Arabia, the United Arab Emirates, Egypt, Qatar, and Algeria. Both Jordan and Morocco focus on growing the share of solar-generated electricity and command government ministries to solicit interest from private developers who then construct and manage renewables projects. However, differences exist in regards to incentives for rooftop-solar panel installations and if government ministries or private developers design renewables projects. This research provides policymakers with insights into how the expansion of renewables production can occur in relatively poor nations that don’t possess prior expertise in energy production.

Introduction As evidenced by the worldwide participation in the 2015 Paris Climate Agreement, there is growing international concern that human-induced climate change and global warming will be the preeminent societal challenge to tackle in the 21st century. Global warming (U.S. EPA, 2016) occurs when greenhouse gases are emitted into the atmosphere; these gases, when existing in increased concentrations in the atmosphere, trap heat emitted by the Earth and cause the atmosphere to warm. Global warming and climate change could yield (NASA, 2018) more

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intensified droughts and floods, rising sea levels, acidified oceans, and disrupt the entirety of how society functions.

Middle East and North African nations are some of the world’s most vulnerable places (The World Bank, 2013) to climate change and global warming. Most of these countries are marked by arid conditions with intensely hot summer temperatures. Rivers are the backbone of many of these societies, like in Egypt, Iraq, Israel, Syria, Lebanon, and Jordan. On the Arabian Peninsula, Saudi Arabia, the United Arab Emirates, Qatar, and Oman possess some of the world’s most dry desert terrain. As climate change becomes more pronounced, the fear is that this already arid region will experience more profound and prolonged bouts of drought. Global warming could result in even more extreme summer temperature highs and alter average winter temperatures.

Furthermore, the economy of the Middle East and North Africa (MENA) region is heavily dependent on the exportation of petroleum and natural gas. Nations like Saudi Arabia, the United Arab Emirates, Iraq, Iran, and Qatar are some of the world’s largest producers of petroleum and natural gas. However, when used to produce energy, fossil fuels emit carbon dioxide, methane, and other greenhouse gases that contribute negatively towards global warming and climate change. Thus, politicians, diplomats, business leaders, and environmentalists in many quarters of the world are trying to push for greater usage of renewable energy sources like solar, wind, hydro, and biomass. Efforts are being made throughout the world to source power plants with renewable energy, prompt greater usage of electric cars and public transit, and encourage more sustainable use of existing fossil fuel resources. Global oil and gas demand is likely to peak (BP, 2018) in the next twenty years, which poses a dire threat to many MENA economies. These nations, often referred to as “petro-states,” are diversifying their economies

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away from their heavy reliance on oil and gas. Yet, their energy transitions threaten to upend the power dynamics, regional rivalries and alliances, and Western military, economic, and diplomatic involvement that has marked the MENA since the 1970s, when petro-states were nationalizing oil companies, effectively setting world oil prices, and growing incredibly rich.

Yet, as many MENA petro-states move towards developing renewable energy resources and diversifying their economies away from oil and gas, not every MENA country is in the same position. Nations like Jordan and Morocco, which respectively lie in the heart of the Levant and anchor the western edge of the Arab world, do not possess any significant oil and gas resources.

Tourism, phosphate mining, information technology, agriculture, and construction form the backbone of the Jordanian economy (CIA, 2018). The Moroccan economy (CIA, 2018) is based on tourism, agriculture, textiles, construction, and shipping. Beyond their similar economic makeups, these countries both have long-standing parliamentary constitutional monarchies. The Hashemite Kingdom, led by King Abdullah II, has reigned in Jordan since 1921, while the Kingdom of Morocco, led by King Mohammed VI, has ruled an independent Morocco since 1956. Both Morocco and Jordan have been almost exclusively dependent on imports to meet their energy needs for electricity and transportation (Energypedia, 2018).

In an effort to diversify their energy mix, court foreign investment, and meet their nations’ prescribed goals on sustainability, both the Jordanian and Moroccan political establishment embarked on creating public policies that would grow renewable energy production. As recently as ten years ago, neither Jordan nor Morocco possessed public policies that delineated a renewable energy policy or promoted greater investment in renewable energy.

Also, subsidized electricity and gasoline encouraged wasteful consumption and made fossil fuels cheaper than competing sources of energy production. However, in the last decade, these two

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relatively peaceful and prosperous MENA countries have experienced substantial growth in the number and scale of renewable energy projects being built. In fact, these two nations far exceed other MENA countries, even the wealthy, oil and gas exporting ones like Saudi Arabia, the United Arab Emirates, and Qatar, in terms of the scale of renewables projects already built and the length of the time the government has been actively promoting domestic renewables development. Yet, how do the public policies developed to prompt the growth of renewable energy sources in Morocco and Jordan compare to each other in terms of policy intent, policy implementation, investment solicitation, and financing structures?

Literature Review Renewable Energy Policy in the Middle East Before delving into a comparison of Jordanian and Moroccan policies, this paper first examines other renewable energy policy in the MENA. To gain a wider understanding of the political processes that gave birth to renewables projects in Morocco and Jordan, this paper makes of use of peer-reviewed research papers like Carafa (2015). Carafa aims to answer how the development of renewables financing policies is affected by national and international politicking and diplomacy and what the efficacy of these policies means for the financing of renewable energy projects in the Middle East and North Africa. Looking at official policy proclamations, financial statements, and diplomatic discussions, Carafa determines that the Mediterranean Solar Plan and DESERTEC were a result of difficult and lengthy political negotiations that negatively affected the financing of renewable energy projects in the MENA. While these transnational initiatives didn’t accomplish their initial goals, the negotiations themselves influenced Moroccan policy makers and compelled them to develop the nation’s own renewables policies.

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Taking a more broad look at the energy production and consumption landscape in the MENA, Griffiths (2017) traces global economic and political factors and national and international policy measures in order to understand how past energy policy left MENA with the energy industry and dynamics that it possesses today. Of particular importance to my research project is that it examines specific policy and legislative directives that have either ushered in or stalled transformations in the Middle Eastern and North African energy systems. It gives particular focus to how Jordan and Morocco curtailed gasoline and electricity subsidies in order to encourage energy efficiency and conservation and issued tenders for renewable energy projects in order to court foreign investment.

Renewable Energy Policy in Jordan Looking exclusively at renewable energy policy in Jordan, Zawaydeh (2017) seeks to understand how legislation adopted in the late 2000s and early 2010s prompted the growth of the renewables industry in this small Middle Eastern nation. The article makes use of the measures adopted in law, building standards, and energy-sourcing changes to provide a broad overview of the changing energy landscape in Jordan. Zawaydeh concludes that the legislation and policy adopted by the Jordanian government made a substantial contribution to growing the renewables industry. He ends with the assertion that state-backed renewables development model can be adopted by peer countries in the developing world in order for them to pave the way for public and private projects that can help them meet their goals of either energy diversification, energy security, or greater renewables power generation..

Looking at the focus of Jordan’s renewable energy efforts, the electricity sector, Alomary, Kaltschmitt, and Becker (2018) is analyzing how governmental policies, organizations, and energy producers cooperate with one another in growing renewables power generation. It

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makes use of government records and extensive statistics on electricity production, transmission, and consumption to describe Jordan’s electricity sector. It provides details on what is driving the push towards greater renewables power generation, such as rising electricity costs, fears of energy shortages, and desires for a revamped, high-voltage electric grid. Stating that government policies have coincided with an increased use of renewables in the electricity sector, this paper gives little insight into how the policies prompted these changes.

Renewable Energy Policy in Morocco Examining the renewable energy policy developed by Morocco, Carafa, Frisari, and Vidican (2016) describes how robust and comprehensive policy helped the nation overcome the financing and political barriers to constructing renewables projects. Looking at policy developments during the late 2000s and early 2010s, it examines the subsequent effects of these policies on private and public development of renewables. It also uses a statistical mechanism developed by the researchers to quantify the impact of policy and financial de-risking on the financing of Morocco’s largest solar power project, the Ouarzazate Noor 1 solar power farm. The researchers conclude that active and forward-thinking policy making eased concerns on the part of foreign solar developers and lenders about the risks of investing in Morocco. This allowed the country to create a political and economic climate that facilitated the building of the Noor 1 project.

Looking more at how regional renewable energy initiatives like DESERTEC prompted domestic renewables policy changes in Morocco, Gruenig and O’Donnell (2016) focuses on how Moroccan leadership viewed renewables as a means towards greater societal resilience and stability. As far back as the 1980s, Morocco has been developing policies that aim to maximize energy conservation and efficiency while working with regional partners like Algeria in Spain,

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with whom it shares grid connectivity, to solve its energy issues. With specific attention to renewables policy in the late 2000s, this paper provides insight into how the Moroccan government controls renewables development in a top-down and centralized manner with the aim of building greater power generation capacity around a handful of massive solar power projects, like Ouarzazate Noor 1.

Comparing and Contrasting Renewable Energy Policy in Jordan and Morocco Examining the financing mechanisms for renewable energy projects in greater detail, Somma and Rubino (2016) delineates how public-private partnerships are a growing global phenomenon in terms of investment in renewables infrastructure; it emphasizes this growing trend by displaying statistics found in bar charts and histograms. Of particular importance to my research project is that this paper compares and contrasts the ways in which public-private partnerships surrounding renewables investments are crafted and executed in Morocco and Jordan. It illuminates how the national energy strategies pioneered by each country made explicit their desires to develop financing structures and governance schemes that would attract substantial foreign investment in renewables projects so as to bolster domestic energy security and diversification.

Limits of Existing Research on Jordanian and Moroccan Renewable Energy Policies This research paper expands on the previously mentioned academic literature, as it aims to not just assess the current energy sectors in Morocco and Jordan, but to compare how the public policies and financing schemes developed in the late 2000s and early 2010s to grow the renewable energy sector in each nation differ or are similar from one another. Previous academic work has just focused on the financing of renewables projects (Carafa, 2015), understanding the current stresses and trends in the electricity sector (Al-omary, 2018), and how these nations’

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renewable energy were developed within the context of just their domestic or regional situation (Gruenig, 2016). While Somma and Rubino (2016) looks at how public-private partnerships were championed in both Jordan and Morocco to finance renewables development, it does not do a comprehensive, comparative case study that also examines policy intent and policy implementation. My research project examines how two countries, which share numerous political and economic similarities in a region that is marked by substantial political and economic diversity, designed and implemented renewables policies and financing structures that have instigated wide-ranging energy transformations that have left regional political and economic powers like Saudi Arabia, the United Arab Emirates, and Egypt playing catch up.

Methods This case study relies on research papers, policy memos, analyses of governing processes and financial mechanisms, and newspaper and magazine stories to understand the policy intent, policy implementation, and financing processes for renewable energy development in Jordan and Morocco. It aims to assemble a vast array of information and viewpoints that will yield information of a quantitative, qualitative, and journalistic variety. Therefore, the anticipated data sources are anything that these proposed methods may yield.

The analytical framework for this research project focuses on three main factors: policy intent, policy implementation, and financing. These are the three best avenues for investigating the development of renewable energy in Jordan and Morocco. This is because the success of a public policy is contingent on the policy intent and how it is implemented. For example, if renewables policies are developed in a centralized way or more cooperative fashion, this could alter the efficacy at which these policies are implemented and the ability to construct renewables projects. Furthermore, understanding the scale of the policy goals and the size of resources

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marshalled behind them is an indicator of how much emphasis the government is placing on implementing these policies. It also yields insight into if the intent of these policies is not met, what governmental bodies may be held responsible for not implementing these policies. Finally, constructing and operating renewables power generation facilities is an expensive endeavor for nations like Jordan and Morocco, which are saddled with low economic growth rates, high levels of debt, and devoid of natural resource wealth (CIA, 2018) in a region brimming with it.

Therefore, understanding how such extensive renewables development occurred in two relatively low-income nations is contingent on understanding how these renewables projects were financed. Finally, eyeing in on these three factors will enable the research project to clarify what the similarities and differences are between the policy intent, policy implementation, and financing schemes are of both countries.

The reason for doing a case study that involves such similar countries is that in terms of renewable energy development, Jordan and Morocco are exemplary in the Middle East for the scale of renewable energy development that has occurred and the time period in which the policies were crafted. While petro-states like Saudi Arabia and the United Arab Emirates and heavily-populated nations like Egypt are now constructing and operating large-scale renewables projects, the legislative and economic framework developed for these countries’ renewables development came about after the late 2000s, early 2010s period during which Morocco and Jordan developed such policies and financing measures. Beyond that, compared to other Middle Eastern states devoid of large fossil fuel deposits, like Lebanon (Hirtenstein, 2016) and Tunisia (Oxford Business Group, 2016), the scale of renewables development in Morocco and Jordan is significantly larger. It is necessary to study both Jordan and Morocco doing so yields insight into if there is one or multiple paths to developing robust renewables sectors.

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Results The public policies in Jordan and Morocco that instigated the development of renewable energy resources in each country in the late 2000s and early 2010s share similarities in terms of policy intent, policy implementation, and interaction with foreign and domestic investors. This research paper first looks at Jordanian renewables policies and then Moroccan renewables policies, before comparing and contrasting the policies of the two countries.

Policy Intent, Policy Implementation, and Financing Structures in Jordan As delineated in the broad outlines of the 2007-2020 Jordan National Energy Strategy Plan (Sahawneh, 2015), the Jordanian government was focused on tackling five main factors: increasing the share of local energy sources in the energy mix, which includes natural gas, oil shale, solar, and wind, reducing dependency on foreign oil imports, diversifying national energy resources, enhancing environmental protection through energy conservation and greater public awareness, and establishing the provision of a reliable energy supply (see Figure 1 on page 16).

With regards to policy intent and policy implementation in Jordan, renewable energy policy is crafted at the highest levels of governance (Sahawneh, 2015). It entails cooperation between King Abdullah, his cabinet, the prime minister, government ministries, and the Jordanian Parliament, which passed the 2012 Renewable Energy and Energy Efficiency Law (REEEL), a law primarily concerned with encouraging increased solar power production. This piece of legislation (Law No. 13 of 2012) commands the Ministry of Energy and Natural Resources to increase the share of renewables in the total energy mix, set policies regarding the development of renewables projects, and enhance environmental protection in the Kingdom. It sets an initial cap of 500 MW of renewables for generating electricity, but if the Ministry believes the grid possesses necessary transmission and distribution systems to accommodate

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increased renewables development, then the Ministry can increase the cap. It also legislates that the Ministry earmark locations for renewables development and issue tenders for renewables projects.

However, it empowers (Zawaydeh, 2013) private renewables developers, and not just the state utilities and government ministries, to submit expressions of interests in identifying suitable locations for and developing renewables projects that could connect to the electric grid. It also creates a checklist that private developers need to complete if they are to develop these projects in Jordan. This checklist entails experience in developing renewables projects, ability to undertake necessary technical processes, and listing the price in kilowatt-per-hour that the state electrical transmission utility, the National Electric Power Company (NEPCO), pays the private developer for electricity delivered to the grid. This means that private developers enter into a power purchase agreement (PPA) with NEPCO, which the Electricity Regulatory Commission (ERC) will sign off on. Once the Ministry, Commission, and private developer sign a memorandum of understanding regarding the potential renewables development, there is a 24month period of exclusivity in which the developer must construct the project, sign the PPA, and finalize financial details.

In regards to small-scale renewables development, REEEL (Tsagas, 2015) codifies the right of Jordanian households to send and sell renewables generated electricity to the electric grid and NEPCO. The law mandates that the ERC sets the price NEPCO must pay those who generate electricity with rooftop solar panels. This price is forbidden to be lower than the purchase tariff set by the Bulk Supply Code, which is the code that regulates the purchase of electrical power. Outside of the law, NEPCO, in conjunction with the Jordanian government, has

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a program that allows customers to pay off home solar power installations that generate electricity by deducting these costs from their electric bills.

As for the financing of renewable energy projects, REEEL (Zawaydeh, 2013) establishes the Renewable Energy and Energy Efficiency Fund. The goal of the fund is to provide adequate funding for the research and development of renewables projects and foster support for the production and consumption of renewables-generated electricity. Yet, Jordan, by creating a tendering system and soliciting expressions of interest from private developers, is deliberately courting both domestic and foreign private investment in renewables projects. The Bank of Jordan (Jordan Loan Guarantee Corporation, 2016), prompted by government policy, now offers low interest loans for the construction of large-scale and small-scale solar power projects.

Policy Intent, Policy Implementation, and Financing Structures in Morocco Per the 2009 Morocco National Energy Strategy (NES) (Bardolet, 2014), the government wanted to confront five main issues: establishing an optimized fuel mix, increasing the deployment of renewables, promoting private investments in renewables projects, promoting energy conservation and efficiency, and promoting regional integration and cooperation (see Figure 1 on page 16). The NES also laid out Morocco’s goal of producing 42% of its electricity from renewables by 2040, with equal amounts of renewables-generated electricity from solar, wind, and hydro. It called for 2,000 MW of solar power to be sourced from both photovoltaic (PV) and concentrated solar power (CSP) systems. The strategy aimed for Morocco to attract $9 billion US in private domestic and foreign investment. The NES announced the creation of the Moroccan Agency for Solar Energy (MASEN), which would be a conduit for developing solar power strategy and attracting investment. and the National Agency for Promotion of Renewable Energy and Energy Conservation. Previous Moroccan policymakers wanted to pursue the

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development of nuclear power, but the King squashed those plans as they would have entailed cooperation with Morocco’s colonial overlord, France.

In terms of policy intent and policy implementation, Moroccan renewable energy public policies are crafted at the highest levels of governance (Hochberg, 2016), amongst King Mohammed VI, his cabinet, the prime minister, government ministries, and the Moroccan Parliament, which passed Law 13-09 in 2010. This law (Hochberg, 2016), a continuance of governmental moves towards spurring the growth of renewables development in Morocco but more specific in regards to solar power than other renewables sources, created a new legislative framework, regulatory procedure, and funding mechanisms for developing renewables and trading “clean” electricity. Government ministries and offices such as the Ministry of Energy, Mines, and Sustainable Development, Ministry of Finance, and the National Agency for Electricity and Water, in addition to MASEN, are responsible for implementing these policies.

The law creates a tendering system (Allal, 2016) that then grants the right to private developers to construct renewables projects that will generate electricity for the electric grid at the lowest possible cost. Private solar power developers may enter into a PPA with ONEE, the state electric utility, which MASEN must certify; PPAs regarding wind-generated power do not require MASEN certification. The terms of any PPA must include the megawatt-per-hour price that the private developer will produce electricity at. However, the law does not mandate that ONEE must buy all power produced by independent producers. It also allows for these independent producers to sell their power to large consumers of electricity. They can build transmission lines for electricity that can be transported within Morocco and to nearby nations like Algeria and Spain, with whom Morocco’s grid has connections to. The law is further accompanied by a map that describes where independent solar power projects may be built. In

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regards to small-scale renewables development, neither the National Energy Strategy nor Law 13-09 call for the implementation of small-scale renewables development or net metering schemes.

Both the National Energy Strategy, Law 13-09, and broader Moroccan government actions provide substantial detail regarding the courting of foreign and domestic private investment and financing renewables projects (Bardolet, 2014). In the early-to-mid 2000s, the Moroccan government entered into an international consortium with European and North African nations and businesses called Desertec (Neslen, 2015). Desertec aimed to generate renewable energy in North African nations like Morocco and transport it to population centers in North Africa and Europe. This signalled Morocco’s commitment to soliciting foreign and domestic investment for developing renewables projects.

In 2008, Morocco created the Energy Development Fund (Society of Energy Investments, 2009), which aimed to support renewables development and attracted the majority of its funding from Saudi Arabia and the United Arab Emirates. In 2009 followed the government-backed Energy Investment Company (Hochberg, 2016), which calls for the government to take strategic stakes in companies that are developing profitable renewables projects.

But the centerpiece of Morocco’s initial renewable energy efforts, the Ouarzazate Noor 1 CSP plant, provides a clear manifestation of how Morocco solicits investment for renewables and finances these projects. The plant, connected to the grid in 2016 with 160 MW of powergeneration generation capacity, derived three-quarters of its funding from private investors (The World Bank, 2016). It attracted debt-financing from the World Bank-backed Clean Technology Fund, the African Development Bank, and other private and public investors in addition to equity

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financing from MASEN. Project construction was further financed by tender-winning private developers, Saudi-based ACWA Power International and Spanish-based Acciona. For the Moroccan government, it was necessary to attract international funding for Noor 1 because the scale of the project was massive and CSP is an expensive technology to implement (The World Bank, 2016). Also, because the PPA for Noor 1 set a megawatt-per-hour price that was higher than the typical electric grid price, MASEN vowed to cover the losses with a subsidy financed by credit from the World Bank (The World Bank, 2016). This structure allocates funding risk primarily to development finance institutions, technical and performance risk to the private developers, and power market risks to MASEN and ONEE (Hochberg, 2016).

Analysis When comparing the policy intent, policy implementation, and financing schemes that the Jordanian and Moroccan governments passed regarding the development of renewable energy production, it becomes evident that there are numerous similarities but also differences between the two set of policies.

Comparing and Contrasting National Energy Strategy Plans Both nations’ renewable energy policies were products of national energy strategies that focused not just on instigating renewables development, but on diversifying energy sources and improving energy conservation and efficiency (Figure 1). Morocco has more expansive and detailed goals surrounding the increased share of renewables in the energy mix, as there is emphasis on generating electricity from not just photovoltaic solar power and wind power, but also from concentrated solar power and hydropower.

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Figure 1: Comparing Energy Policy Intent in Jordan and Morocco Where the national energy strategies differ is that the Morocco focuses on increasing the amount of regional and international cooperation surrounding renewables development, such as creating clean-electricity trading mechanisms between itself, Spain, and Algeria and refurbishing high-voltage transmission lines that already connect these three countries’ electric grids; Jordan has no such policies that aim to kickstart regional cooperation as it shares no grid connectivity with neighboring nations. This is borne out of the fact that Morocco’s renewables push came not just from domestic governance deliberations like in Jordan, but from wider European and North African government initiatives, like Desertec, to prompt the growth of clean-electricity trading.

Comparing and Contrasting the Role of Governmental Institutions Both nations’ renewable energy policies enable state ministries to play preeminent roles in designing specific renewables policies, certifying contracts between renewables developers and state electric utilities, and soliciting private investment for renewables projects. For instance, Jordan’s REEEL directs the Ministry of Energy and Natural Resources and Morocco’s Law No. 13-09 commands the Moroccan Agency for Solar Energy (MASEN) to increase the share of

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renewables in the total energy mix. However, neither piece of legislation delineates what repercussions exist if either of these two ministries fail to implement their policy directives.

However, both pieces of legislation task each ministry with updating policies regarding the development of renewables projects as circumstances change, implying that the flurry of renewables policymaking in the late 2000s and early 2010s was not meant to be a one-and-done phenomenon.

Comparing and Contrasting the Courting of Private and Foreign Investment Both Jordan and Morocco instituted policies that encouraged the private development of renewable energy projects. Both nations created tendering systems that invite domestic and foreign private developers to bid on potential renewable energy developments. Each nation has a similar tendering system, in which each state grants the right to private developers to construct renewables projects that will then generate electricity that can be sent and sold to the electric grids and state utilities. Each nation creates the right for these private developers to sign power purchase agreements (PPA) with the state electric utilities, which then must be signed off by the ERC in Jordan and MASEN in Morocco.

However, Jordanian policy is focused on encouraging private developers to identify potential locations for renewable energy projects that the private developers then design and submit to the Jordan government for consideration. Jordan calls these expressions of interest (EOI). If these EOIs are approved for development by the Jordanian government and affiliated ministries, then private developers have a 24-month period to finalize a PPA, ensure financing, and construct the renewables project. Yet, Moroccan policy is designed where renewables

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development does not invite such EOIs; rather, private developers bid for the right to construct and manage state-designed renewables projects that are to be built in government pre-approved locations. An example of this is the 160 MW Ouarzazate Noor 1 solar power project, which MASEN designated to be the first of 4 solar power plants constructed in the south-central Moroccan desert. Noor 1 is emblematic of how the Moroccan government, like its Jordanian counterpart, concentrates policy making and implementation within the national government.

However, it also embodies the differences, as Noor 1’s location and design was chosen by by the state, which then solicited private developers to take the lead in constructing and managing the project. Jordan, as stated above, provides no pre-approved set of locations for potential renewables projects; the onus is on private developers to identify potential renewables project locations, design them, and then construct and manage them.

Noor 1 also embodies the different financing mechanisms for renewable energy projects that Moroccan policies encourage. As stated previously, both Morocco and Jordan, through the use of tendering auctions, aim to solicit private developers to bid on constructing and managing renewables projects; this system rewards private developers who can construct and manage renewables developments that are done at the lowest possible cost. But because Morocco is focused on the financing and construction of a few large flagship renewables projects while Jordan’s focus is on developing a wide range of medium-scale renewables projects, Moroccan renewables policies more aggressively court large development finance and investment institutions. For instance, the Noor 1 project received extensive debt and equity financing from the World Bank-backed Clean Technology Fund and African Development Bank. Furthermore, Morocco created the Energy Development Fund, which attracted hundreds of millions of dollars in financing from Saudi Arabia and the United Arab Emirates. Jordan did create the Renewable

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Energy and Energy Efficiency Fund, but the scale of potential investment pales in comparison to Morocco, which, as stated in the results, aimed to attract initially $9 billion in private investment.

Comparing and Contrasting Residential and Small-Scale Solar Power Policy Finally, one aspect of Jordan’s renewable energy policy intent is to instigate the development of independently-generated electricity from residential solar power installations, like rooftop solar panels. Jordan accomplishes this by mandating that the state electric utility, NEPCO, pay for independently-generated electricity that can be sent to the grid at a fair rate. The Jordanian state also eases the financial obligations of those who install home-solar capabilities by allowing them to pay off home solar power installations that generate electricity by deducting these costs from their electric bills. This robust set of policies and economic incentives for homesolar is larger than any Moroccan policies. In fact, the Moroccan renewables policies possess no intent for instigating home-solar deployment, as Law No. 13-09 provides no such regulatory mechanisms or economic incentives for such installations.

Comparison to Existing Research on Jordanian and Moroccan Renewable Energy Policies This research project asked: How do the public policies developed to prompt the growth of renewable energy sources in Morocco and Jordan compare to each other in terms of policy intent, policy implementation, and courting private foreign and domestic investment?

Understanding that many similarities exist among the political and economic dynamics in both countries, I expected to find that the public policies and financing structures that instigated renewables in Jordan and Morocco would be similar. The pieces of research discussed in the literature review largely corroborated this notion, but analyzed each set of renewables policies in a vacuum. No piece of research did an extensive comparing and contrasting of the MENA’s two renewables pioneers. Further research confirmed my suspicions that the policy intent, policy

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implementation, and financing schemes for renewables developments were largely similar. Yet, it did highlight that notable differences exist, especially when considering policies regarding residential solar power, the design of renewables projects, and relationships with development finance institutions.

Conclusion Though this research project looked at dozens of sources, ranging from policy analyses to peer-reviewed papers to newspaper and magazine articles, it is inherently limited in its ability to provide a full description of the intent and implementation of renewable energy policies in Jordan and Morocco. This is because no interviews were conducted or no discussions were witnessed that involved the policy makers who designed and implemented the renewables policies in both countries. Furthermore, this lack of direct access to legislators, bureaucrats, financers, and electricity customers means this research project possessed a heavy reliance on second-hand sources as its basis of information. Also, more research could be conducted to determine if policy diffusion occurred. This would entail looking at if either policy developments in either Jordan or Morocco impacted the way in which the other nation designed and implemented its policies regarding renewables.

Though this research project suffers from its limitations, it does lay out just how unique Jordan and Morocco are in the MENA for the scale and timing of their renewable energy policies and renewables production capabilities. Devoid of fossil fuel resources, these two countries developed extensive and robust public policies and financing structures for renewables projects beginning in the mid-to-late 2000s, many years before fossil fuel-exporting nations like Saudi Arabia and the United Arab Emirates did so (Gardiner, 2016). Frustrations with high electricity

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prices, concerns over energy imports, and desires for energy independence pushed these two nations to develop primarily photovoltaic and concentrated solar power plants that now supply increasingly large amounts of electricity to each nation’s electric grid. Throughout the MENA, high electricity prices are pervasive, mounting fears exist over a lack of economic diversification, and there are growing concerns regarding climate change. In response, many nations in the region, especially wealthy, fossil fuel-exporting ones, are now developing policies aimed at instigating greater renewables development. For policymakers hoping to understand how countries that are over reliant on oil and gas export revenues can usher in an energy transformation, the cases of Jordan and Morocco are instructive. If these two relatively-poor, inexperienced-energy producing nations are able to pull of such an energy transformation, then wealthy, experienced-energy producers can do the same. Nations can accomplish this by forging ambitious policy goals, creating and coordinating robust policy implementation schemes, and developing strong relationships with private renewables developers and development finance institutions that view renewables projects in the MENA as a potential financial boon. While the policy intent, policy implementation, and financing schemes were similar in Jordan and Morocco, both nations created such policies and investment structures in ways that fit their domestic political and economic situations. With MENA states comprised of such such diverse governance structures and economic backgrounds, this last point is instructive for nations in a region long hooked on oil and gas.

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