World Energy Investment 2015-2024

Introduction

In this project I visualise the latest World Energy Investment (WEI) data from the International Energy Agency (IEA), highlighting current investment trends.

Within the shifting landscape of energy production, exportation and security. I explore the exciting possibilities, using Morocco as a case study.

What is World Energy Investment?

The World Energy Investment is a yearly report published by the International Energy Agency. It serves as the primary source for understanding global trends in energy sector investments. The report offers a comprehensive analysis of:

• Investment Flows: WEI tracks the amount of money being invested across various sectors of the energy industry. This includes investments in oil, gas, coal, renewable energy sources like solar and wind, energy efficiency, and research & development.
• Investor Decisions: The report examines the factors that influence investment decisions. This involves analysing how risks and opportunities are perceived by investors in different areas of the energy sector.
• Geographical Landscape: WEI provides insights into how energy investments are distributed around the world. It highlights which regions are attracting the most investment and in what sectors.
• Policy and Security: The report explores how government policies and global energy security concerns impact investment trends.

The 2024 Edition and Recent Trends

The latest edition (2024) focuses on providing a complete picture of energy investments in 2023 with preliminary data for 2024. Some key trends highlighted in recent reports include:

• Rise of Clean Energy: There's a significant increase in investments directed towards renewable energy sources like solar and wind. This is driven by factors like climate change concerns, falling renewable energy costs, and government policies promoting clean energy transition.
• Energy Security Concerns: The recent global energy crisis (2022) has emphasised the importance of energy security. This has led to increased investments in sources that ensure a reliable and independent energy supply for countries. link
• Flux in Traditional Fuels: Investments in fossil fuels like oil and gas have shown a complex pattern. While high fuel prices have boosted revenue for traditional energy companies, there's also uncertainty due to the shift towards clean energy.

The 2024 WEI delves deeper with these interesting additions:

• Investment Sources: It analyses the origin of funding for energy projects, including the role of development finance institutions in emerging economies.
• Clean vs Fossil Fuels: The report provides a clear comparison of investment trends between clean energy and fossil fuels.
• Regional Analysis: There's a new section dedicated to exploring investment patterns in ten key global economies and regions.

The Importance of World Energy Investment

The WEI report is crucial for understanding the future of the global energy landscape. By analysing investment trends, the report sheds light on:

• Energy Security: It helps assess how well-equipped countries are to meet their future energy demands.
• Climate Change Mitigation: The report indicates the pace of progress towards a low-carbon energy future.
• Economic Growth: Investment trends provide insights into potential job creation and economic development in the energy sector.

WEI report - 2024: link

GB Fuel type power generation production (live): link

Visualisation: W_E_I_World.csv

A document with the R code for the above visualisation. link

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Energy Aspirations: A Global Overview and Morocco as a case study

The global energy landscape is undergoing a profound transformation, driven by factors such as climate change, energy security, and technological advancements. Key aspirations include:

• Decarbonisation: Transitioning from fossil fuels to cleaner energy sources to mitigate climate change.
• Energy Security: Reducing reliance on imported energy and ensuring domestic supply stability.
• Affordability: Making energy accessible and affordable for all.
• Innovation: Driving technological advancements to improve efficiency and develop new energy sources.

Energy Generation: A Focus on Renewables

Renewable energy sources, such as solar, wind, hydro, and geothermal, are at the forefront of energy generation aspirations due to their abundance, low environmental impact, and potential for job creation:

• Solar and Wind: These technologies have experienced rapid growth and cost reductions, making them increasingly competitive with fossil fuels. Many countries have set ambitious targets for renewable energy penetration.
• Hydrogen: Often touted as a clean energy carrier, hydrogen is gaining traction for both domestic use and export.
  • Green hydrogen: Produced using renewable energy, is particularly emphasised as it aligns with long-term sustainability goals.
  • Blue hydrogen: Produced with carbon capture and storage (CCS).
  • Grey hydrogen: Produced from natural gas without CCS, serves as a transitional technology but does not fully align with decarbonisation objectives.
• Nuclear Power: Some countries are considering nuclear as a low-carbon option, though its deployment is often hindered by high costs, public perception, safety concerns, nuclear waste management, and long construction lead times.
• Energy Storage: To address the intermittent nature of renewables, energy storage technologies like batteries, pumped hydro, thermal storage, and hydrogen storage are crucial.

Home and Export Ambitions

Countries are pursuing diverse strategies to balance domestic energy needs with export opportunities:

• Energy Independence: Many nations aim to reduce reliance on fossil fuel imports and enhance energy self-sufficiency through domestic renewable energy production.
• Energy Exports: Countries with abundant renewable resources, such as those with vast solar or wind potential, are positioning themselves as energy exporters. This includes not only exporting energy but also renewable energy technologies and expertise.
• Energy Hubs: Some regions are developing into energy hubs, facilitating the trading and transportation of energy resources.

International Contracts: A Dynamic Landscape

The energy sector is characterised by complex and long-term contracts. While specific details can vary widely, common types of international energy contracts include:

• Power Purchase Agreements (PPAs): Contracts between electricity generators and buyers.
• Gas Supply Agreements: Contracts for the sale and purchase of natural gas.
• LNG (Liquefied Natural Gas) Sale and Purchase Agreements: Contracts for the sale and purchase of liquefied natural gas.
• Renewable Energy Certificates (RECs): Contracts for the purchase of renewable energy credits.
• Hydrogen Supply Agreements: Emerging contracts for the sale and purchase of hydrogen.

Noteworthy examples of international energy cooperation include:

• The European Union's Green Deal, aiming for climate neutrality by 2050.
• China’s Belt and Road Initiative, involving significant energy infrastructure projects.
• The International Solar Alliance, promoting solar energy cooperation.

Challenges and Opportunities

The energy transition is not without challenges:

• Investment Needs: Massive investments are required to develop renewable energy infrastructure and grids.
• Technological Advancements: Continuous innovation is essential to improve energy efficiency and reduce costs.
• Policy and Regulatory Frameworks: Clear and supportive policies are crucial for attracting investment and driving the energy transition.
• Geopolitical Factors: International relations and geopolitical tensions can impact energy markets and projects.

Despite these challenges, the energy sector also presents significant opportunities:

• Job Creation: The energy transition can create millions of jobs in renewable energy, energy efficiency, and related industries.
• Economic Growth: Investments in clean energy can stimulate economic growth and development.
• Technological Leadership: Countries that lead in clean energy technologies can gain a competitive advantage, influencing global energy policies and standards.

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Morocco's Energy Aspirations: A Sun-Kissed Strategy

Morocco has positioned itself as a pioneering nation in renewable energy, particularly solar power. Its strategic geographic location, coupled with ambitious government policies, has propelled the country towards a sustainable energy future.

Morocco's Energy Vision

Morocco’s energy aspirations are centred around:

• Energy Independence: Reducing reliance on fossil fuels and ensuring a stable domestic energy supply.
• Renewable Energy Leadership: Becoming a regional and global leader in renewable energy technologies and exports.
• Economic Development: Leveraging the energy sector to create jobs and stimulate economic growth.
• Environmental Sustainability: Mitigating climate change impacts through a low-carbon energy mix.

Solar Power: The Cornerstone of Morocco's Energy Strategy

Morocco boasts abundant solar resources, making it an ideal location for solar power generation. The country has made significant strides in harnessing this potential.

The Noor Solar Plants are a series of concentrated solar power (CSP) and photovoltaic (PV) projects located in Ouarzazate, Morocco. The complex is the world's largest CSP facility and a flagship project for Morocco's renewable energy strategy:

• Noor I CSP Plant: 160 MW capacity, 618 GWh annual electricity production, uses solar concentrators with more than 3 hours heat storage.
• Noor II CSP Plant: 200 MW capacity, 600 GWh annual electricity production, uses solar concentrators with more than 7 hours heat storage.
• Noor III CSP Plant: 150 MW capacity, 500 GWh annual electricity production, uses a solar tower with more than 7 hours heat storage.
• Noor IV PV Plant: 70 MW capacity, 120 GWh annual electricity production, uses photovoltaic solar cells with a tracking system.

Plant Statistics:

• Total installed capacity: 580 MW.
• Annual electricity production: 2,038 GWh.
• Water consumption: Up to 3 million cubic metres per year (depending on the plant).
• Diesel fuel consumption: Up to 19 tons per day (depending on the plant).
• CO2 emissions reduction: Approximately 1.2 million tons per year.

An auxiliary diesel fuel system is used to maintain the minimal temperatures of the heat transfer fluid during times when the sun does not shine (including at night), to start the startup and synchronise the turbine to the electrical grid, and other auxiliary functions.

The plant was completed in four phases and covers an area of over 3,000 hectares (12 sq mi). It can store solar energy in the form of heated molten salt, allowing for production of electricity into the night

The Moroccan Agency for Solar Energy (Masen) continues to develop and expand the Noor Solar Complex, with plans for additional projects and phases. In addition the country is exploring the potential of using solar energy for water desalination to address water scarcity issues.

Wind Power: A Complementary Source

While solar power takes centre stage, Morocco also recognises the potential of wind energy. Several wind farms are operational, contributing to the country's renewable energy mix.

Energy Storage: A Key Component

To address the intermittent nature of renewable energy sources, Morocco is investing in energy storage technologies, such as batteries and thermal storage in CSP plants, to ensure a stable electricity supply.

Energy Exports: A Strategic Goal

Morocco aims to become a major exporter of renewable energy, particularly green hydrogen. The country’s abundant solar and wind resources, coupled with its geographic proximity to Europe, position it strategically for this role. Pilot projects and small-scale green hydrogen production have already begun, supported by international partnerships.

International Partnerships

Morocco has actively sought international partnerships to support its energy ambitions:

• Masdar: The Abu Dhabi-based renewable energy company has been a key partner in several solar power projects.
• Siemens: The German conglomerate has been involved in the development of wind and solar projects in Morocco.
• Moroccan-German Energy Partnership (PAREMA): This partnership is significant in developing green hydrogen projects.
• European Union: Morocco has strong ties with the EU, and energy cooperation is a significant component of the bilateral relationship, particularly aligning with the European Green Deal.

Challenges and Opportunities

While Morocco has made remarkable progress, challenges remain:

• Grid Integration: Integrating large-scale renewable energy into the existing grid requires significant investments and technical expertise.
• Financing: Securing adequate financing for renewable energy projects can be challenging, though international loans and grants from organisations like the World Bank, the African Development Bank, and the European Investment Bank have provided support. Attracting private investment remains a key challenge.
• Policy Framework: A supportive policy environment is essential for attracting investments and accelerating the energy transition.

Despite these challenges, Morocco’s energy sector offers immense opportunities:

• Economic Growth: Morocco’s commitment to renewable energy, coupled with its strategic location, positions it as a key player in the global energy transition, with potential economic benefits including job creation and technological leadership in the Middle East and North Africa (MENA) region.

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Morocco's Energy Exports: A Growing Potential

Morocco is actively pursuing energy export opportunities, primarily focusing on renewable energy, particularly green hydrogen. While large-scale export contracts may still be in the early stages, the country is making significant strides toward this goal.

Potential Export Destinations

• Europe: Given its geographical proximity and the EU's ambitious renewable energy targets, Europe is a prime target market for Moroccan energy exports.
• Other African Countries: Morocco could become a regional energy hub, supplying clean energy to neighbouring countries.

Export Commodities

• Green Hydrogen: Morocco’s abundant solar and wind resources make it a prime location for green hydrogen production. The country aims to become a global leader in green hydrogen export, supported by dedicated projects and international partnerships.
• Renewable Electricity: While direct electricity export might face technical challenges, undersea cables, like the proposed Morocco-UK interconnector, could enable direct exports. Additionally, there’s potential for exporting renewable energy certificates (RECs).

Challenges and Opportunities

• Infrastructure: Developing the necessary infrastructure, including hydrogen production facilities, pipelines, and export terminals, is a significant challenge.
• Technology: Continuous advancements in green hydrogen production and storage technologies are crucial.
• Policy Support: A supportive policy framework, both domestically and internationally, is essential to facilitate energy exports.
• Market Development: Building strong relationships with potential buyers and developing export markets is vital.

Notable Initiatives

• Green Hydrogen Partnerships: Morocco is actively exploring partnerships with international companies to develop green hydrogen projects.
• Power Purchase Agreements (PPAs): While primarily focused on domestic consumption, PPAs could evolve into export-oriented contracts in the future.

Summary: While concrete export contracts might be limited at this stage, Morocco’s strategic position, abundant renewable resources, and ambitious goals make it a promising exporter of clean energy in the coming years. The country’s initiatives, such as dedicating one million hectares for green hydrogen projects, underscore its commitment to becoming a global leader in renewable energy exports.

Conclusion

The World Energy Investment (WEI) report plays a critical role in shaping the future of global energy. By providing detailed insights into investment trends, it serves as a guiding resource for policymakers, investors, and stakeholders navigating the complex and rapidly evolving energy landscape. As the world faces the dual challenges of ensuring energy security and combating climate change, the report underscores the significance of investment flows in steering the transition towards cleaner and more sustainable energy sources.

This project, through the lens of Morocco’s energy aspirations, highlights the dynamic interplay between global investment trends and national energy strategies. Morocco's focus on renewable energy, particularly solar and green hydrogen, exemplifies the opportunities and challenges that countries face in pursuing energy independence, economic growth, and environmental sustainability. The case study of Morocco illustrates how targeted investments, supported by international partnerships and a conducive policy environment, can position a country as a leader in the global energy transition.

As the global energy landscape continues to transform, the WEI report remains an indispensable resource, helping to track progress, identify emerging trends, and inform decision-making in the pursuit of a sustainable energy future

Patrick Ford 🪫