New Low For Wind Energy Costs: Morocco Tender Averages $US30/MWh

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Originally published on RenewEconomy

The North African country of Morocco has achieved a new low for wind energy costs, securing average bids of just $US30/MWh from its tender for 850MW tender of large-scale wind energy projects, with the lowest at around $US25/MWh.

The pricing – revealed by its energy ministry at a ministerial round table at the International Renewable Energy summit in Abu Dhabi on Saturday – sets a new low for wind energy pricing in the world, and is boosted by the remarkable wind energy resource sourced from Atlantic trade winds, and some concessional finance.

Abderrahim El Hafidi, vice minister of energy and environment, described the result as “extraordinary” and “amazing” and said it pointed to a “real revolution” in the means of producing energy. Some bids in the US have been in and around $US25/MWh, although these have been boosted by a 30 per cent production tax credit.


Until a decade ago, Morocco sourced all its energy needs from fossil fuels, but recently set a 52 per cent renewable energy target by 2030. Apart from wind farms (it already operates Africa’s largest wind farm, pictured above), it is also investing in large-scale solar farms – a mix of solar PV, solar tower with storage, and parabolic trough technologies.

El Hafidi did not identify the lowest bidder, although reports in December said a consortium led by Italy’s Enel Green Power, and including Morocco company Nareva Holdings and turbine builder Siemens had made the lowest bid, without specifying the price at the time.

Other bidders include Spain’s Acciona, France EDF, in partnership with Qatar Electricity and Water Company (QEWC), Morocco’s Fipar Holding of Morocco, and Alstom Wind; Saudi Arabian firm ACWA, in co-operation with Gamesa, and France’s Engie (the owner of the Hazelwood brown coal power station) and Vestas.

It is the second time in two years that the IRENA summit has witnessed another step change in the costs of renewable energy technologies.

Last year, ACWA Power won a bid for 200MW of large scale solar PV with a price of $US$58.40/MWh. That was then the lowest in the world, although it has since been beaten by tenders in Chile.

Until a decade ago, Morocco sourced 98.9 per cent of its energy needs from imported fossil fuels, with oil trading at the time at around $US100/MWh.

“Things have changed a lot,” El Hafidi said. In 2009, wind and solar was much higher than fossil fuels, particularly coal, which was seen as cheap and abundant.

“Now, we have wind projects cheaper than coal. The $30/MWh bid compares to coal which is 80/MWh.” (As one observer noted following the tender result, even if the coal were free, a coal fired plant could not match those costs.)

“Isn’t that amazing that we can have confidence in renewable energy for the future of our energy and for the future of the planet,” El Hafidi said. “This is real. It is not a claim.”

Adnan Amin, the executive director of IRENA, said the Moroccan pricing achievement “indicates remarkable change and the pace of that change” in the cost of renewable energy technologies.

Amin said there was a level of cynicism about the nature of the Paris climate deal, but those views misunderstood the nature of the transformation taking place.

“Here, we have (proof that) the majority of the solution is here. The question is how do we make it happen.”

The price of $30/MWh translates into $A43/MWh -and is well below the record price bid for a wind farm in Australia, which was set at $A77/MWh in the latest tender conducted by the ACT government. That, though, was for a fixed price over 20 years, so represents a first year price well below that.

Steve Sawyer, the head of the Global Wind Energy Association, said that low prices reflected the strong wind conditions in Morocco.

“It doesn’t mean that wind will be 3c/kWh ($30/MWh) everywhere. It won’t be. But there are a lot of place where it will be. he point to the Brazil, China, and parts of US where that could happen.”

The 850MW wind tender is part of Morocco’s ambitious target of sourcing 52 per cent of its electricity needs from renewable energy, a target that was increased from 42 per cent during the Paris climate talks.

It has also started generation from the 150MW Noor concentrated solar power plant (parabolic trough) – the first in north Africa. Subsequent stages will include another parabolic trough plant, a 150MW solar tower power plant with storage, and a large solar PV array.

The Noor plant, also being built by ACWA Power, is expected to be officially inaugurated in coming days.

El Habidi said the first stage of the solar parabolic trough plant would deliver electricity at around three times the cost of coal, but it was a critical first step towards storage and flexibility, which was crucial for high levels of renewables.

Indeed, ACWA Power’ president and CEO Paddy Padmanathan, told RenewEconomy on the sidelines of the summit that solar thermal technology woud fall into “single figures” – meaning below 10c/kWh, or $100/MWh) within a few years. (More from that interview in coming days).


The 850MW Morocco tender includes five projects — the 150MW Tanger 2 in the northern part of the country, 300MW at Tiskrad, Laayoune, 200MW at Jbel Lahdid,100MW near Boujdour, and 100MW at Midelt.

Commissioning of the wind plants is expected between 2017 and 2020.


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Giles Parkinson

is the founding editor of, an Australian-based website that provides news and analysis on cleantech, carbon, and climate issues. Giles is based in Sydney and is watching the (slow, but quickening) transformation of Australia's energy grid with great interest.

Giles Parkinson has 596 posts and counting. See all posts by Giles Parkinson

53 thoughts on “New Low For Wind Energy Costs: Morocco Tender Averages $US30/MWh

    • If anything near those prices can be replicated elsewhere in the world I expect to see massive increases in deployment, which will just lead to even lower costs. The tipping point is surely here and I agree it could be time to sell fossil fuel shares. No wonder oil is under $30 a barrel – it won’t be long before it is worthless.

      • I forwarded this to Amber Rudd via Twitter. The lower these bids come in the less tenable the Tories stance on onshore wind looks. I wonder if there is a price that even they would u-turn at?

    • Wow, Greenland could export lots of cheap wind power, offset by huge costs for long undersea cables!

      • Labrador and Newfoundland are closer and easier to access.

        • Not 100% sure, but I think the Churchill Falls Hydro project means there is already a transmission system in place.

      • Thats mostly inland on ice that is very thick but melting. The Midwest, South South America, and Somalia look excellent as well.

      • Virtually entire continental US of A can be energised by wind.

        • Certainly. But a mix of RE is going to be cheaper than storing wind to fill in the gaps.

          What I’d love to see is similar gaps for countries which “don’t have good wind resources”. What would it look like for inland India where there’s not a lot of usable wind at 80 meters? Could India enjoy cheap electricity from wind if they simply used higher towers?

  • I don’t want to shed any bad light on Morocco, but here is how things (unfortunately) still work in Eastern Europe. Lowest bidder wins (the winner is always backed by an influential decision maker within the government as they share the profits). After some time, when things quiet down, there is all of a sudden a made up reason to increase the price for whatever that needs to be done and then again and again. So the price many times doubles the original bidding price that came from the bidding process. Now I have no idea how things work in Morocco, but just wanted to point out that bidding processes outside of North America, Western Europe, Japan plus a few others are not always what they seem to be.

    • In this case the bidders are all foreign companies, who are much less likely to have an inside track with the government. Their managers won’t even speak the language. Morocco is only 80th out of 175, on Transparency International’s league table so it’s more than likely that the bidders’ local partners are well connected. But that should raise prices if anything.

    • Inflation between the price quoted to win the RFP and final price would also be a factor with Fossil Fuel powered generation.

    • Sounds like nuclear projects in Ontario.

  • Coal power runs $80/MWh if the plant hasn’t been built yet. In other words, including full depreciation on capital investment. For a plant that has been built, the marginal operating cost is that of the fuel and labor to run it and maintain it. This will be the one to watch. Lazard reports show these figures, I believe, and I think they’re in the zone of $20/MWh. So wind is now taking aim at these figures. If wind can hit numbers like this in places with installed bases of coal plants (US, Europe, China), it will be very interesting.

    Note on accounting above: sure, the accountants will always want to continue including full depreciation, but that “sunk cost” does not enter into the decision as to whether to run an existing plant or not. That decision revolves around marginal operating cost, as well as technical factors like “do we need the power” and “would the shut-down be long enough to justify shutting a coal plant down”.

    • To state it directly, I think you mean, if wind goes to $20/MWhr or less, its cost is less than the marginal cost of coal, fuel and operation and maintenance. That means existing coal plants will shut down because they are too expensive compared to newly constructed wind plants.
      That eventuality has already begun in Australia and Germany.

      • Care to cite which coal power stations have closed because of “cheap” wind? Most of the PPA’s I’ve seen in Australia are 2-3 times av. wholesale prices (at least). Just saying.

        And as for Germany, coal’s hardly budged as a generation source.

        Facts are preferred, so please supply them.

        • You could have just looked it up yourself. But you asked for it.

          “Just four months after saying that at least one of the coal generators could continue until 203o, Alinta CEO Jeff Dimery said the decision to close both the 30-year-old Northern Power station (544MW) and the 50-year old, already mothballed Playford B power station (240MW) came after a detailed strategic review.

          Put simply, the company said, the coal-fired generators were no longer economic, and have incurred operating losses of $100 million over the last four years, even with $200 million spent on trying to extend their operating life.”

          But one of many in Australia, mothballed, furloughed, or shuttered.

          Germany’s net coal consumption and capacity is dropping.

          “the German Energy Agency expects 11.3 GW of coal capacity to be added and 18.5 GW closed by 2020—a net decrease of at least 7.2 GW.

          In fact, as explained here and here, Germany has begun no new coal plants since Fukushima, coal-fired generation will decline even more than capacity, lignite hasno future, and any of the coal plants planned long ago that are completed—offsetting retiring units—are likely to lose money, just as existing ones do now.”

          “Some coal and nuclear plants will struggle to cover their fixed costs with power prices below 30 euros, Brunetti said.”

          One would be hard pressed to ignore or be unaware of coal’s profitability problems in Germany, if one were a follower of European electric power.

        • I think we’re only at the stage where not yet built plants are deferred. It takes a lot cheaper power to shut down an existing plant sitting there ready to run.

          • Something with the capacity factor of wind (30% is a typical global average) simply cannot replace any thermal plant that is providing dispatchable power unless it also gets some gas or other source that load follows or cuts in with peak demand.

            In the case of South Australia, an acute drop in demand, plus the assured access to the grid of wind may have helped push SA’s coal out of profitability, BUT note, they still import electricity from Victoria’s brown coal fields. So the geographical location of the thermal power source has shifted, BUT not the need for it!

            It’s vastly more complex than a simple cost per MW proves, but at all times, the grid MUST be balanced with demand matched by supply and the ONLY thing that can guarantee that is thermal.

            Compare Spain and Germany: one has RE plus nuclear and one has RE replacing nuclear. One has cheap, low emissions electricity and the other has very expensive and very dirty electricity.

            Swap out coal with nuclear on the thermal side and take the low hanging fruit where available with renewables. Nothing else actually reduces the use of coal/gas on the scale needed to make a difference to emissions.

          • Germany recently completed construction on a coal plant which they expect they will never fire up. Things are changing very rapidly.

        • Not for wind power but for PV power( before the text was revised to “RE power”):

          The day ahead prices for power at the EEX power exchange Germany:

          (page 12)

          The French atom power control body fears for the safety of the atom power plants since low power prices are making ‘safe atom power plants’ to expensive:

          The reactors are so badly damaged (cracked steel) that all have to be controlled. But there is no money, no staff …

          (in French)

          The REs have won the race, the question is how long will tax payers being forced to subsidize the non REs.
          Well, the atom safety authorities are already packing in and coal generators as well ….

          Spain is propably Europe’s first nation without subsidised power generation:

      • That’s correct. And if new wind power sells for $30/Mwh, existing coal will continue to operate, even at a loss because it’s less of a loss than idling the plant. The depreciation portion hits the books regardless of whether the plant runs or not because that money is already spent and the plant is already built. Thanks for helping to clarify.

    • The cost of ‘fuel and labor to run it and maintain it’ fundamentally ignores the the fact that depreciation really is a cost, its the accumulated wear and tear on the asset before you overhaul or replace it. In any major capital asset there is routine annual maintenance and then there are minor capital and major capital projects that occur at greater than annual intervals. Not including it would represent a huge omission in cost / benefits analyses, and would create apples to oranges data.

      Marginal operating costs also rise the older as asset is (Bathtub Curve), and given that almost three quarters of US coal plants are 30 years or older, and their average life is only 40 years, I’d be willing to wager marginal operating costs for coal, in the US at least, are beginning to rise rather rapidly.

      • Indeed depreciation is a real cost, but it’s a “sunk” cost for an existing plant. Note that I said that only marginal operating costs enter into the decision as to whether to run it idle an existing asset. This is important because of the huge amount of existing coal generation. Depreciation on an existing plant will hit the books regardless of whether the plant runs. If one can sell power for more than the fuel and labor cost, they should run the plant. If power sells for less than the fuel and labor, they should idle it.

        Hope that Clarifies a little. This is classic stuff involving decision making where sunk coast are involved. As power gets cheaper, it will become a game of minimizing the loss for existing assets.

        • Agree, in the short run, lowest cost per kWh will rule the day, I guess I’m just extrapolating out a few years (as per sources above) where many of those coal assets might need some kind of refit just to run. Then the company will look at the investment cost of refit (not even building a new plant) and may determine that the return on investment just doesn’t cut it.

          Just adding a bit more gray to the mix, the decision isn’t just ‘build new wind’ or ‘build new coal’, but also ‘build new wind’ or ‘refit old coal’. I don’t thing either of those options are economically viable for coal on average anymore, given that coal capacity continue to decrease in the US at least.

    • What I didn’t see in the report is the capital investment of the infrastructure of the wind farm is that included in the $30 per megawatt hour?. And how was that calculated ?? there’s some ambiguity in the report could someone explain?.

  • Let’s keep fingers crossed that wind patterns remain constant over decades, Greenland just had a major melting event in the heart of winter.

    • Use floaters. If desired just tow them somewhere else.

  • Political niggle: the map shows no distinction between Morocco proper and the Western Sahara – over half the territory, but with a tiny population. Morocco took it over when the Spaniards left, but the occupation is challenged the Polisario Front, a guerilla movement which controls the valueless eastern third of the area. Wikipedia: “No state formally recognizes the sovereignty of Morocco over Western Sahara.” It’s not for a blog like this to take a stand on the dispute, but there should be a line of separation on the map.

    • Why a line of separation, at best dotted lines maybe (” The UN recognizes neither Moroccan[1] nor SADR sovereignty over Western Sahara.”),
      The area is disputed but under Moroccan control, the people living there need renewable energy too. if at all, it is a very welcome action that will increase local stability and provide jobs.

      • I don’t disagree. The developers are aware of the political risk, which is quite low as the Wall has proved very effective in keeping Polisario out. It’s an excellent area to build big wind farms, whoever controls it.

    • Sir, it is Morocco… All of it. I do understand your political correctness. However, do you want a dependent state in the middle of an unstable region? The population of what you would call Western Sahara is less than 300k at most. About 1% of Moroccan population , and yes about half of the country in size… Morocco is basically the only standing safe country in the region. I wouldn’t recommend destabilizing him not even with a map. Especially considering it’s a strategic ally to USA and E.U…. Moreover, one of the very few countries to have launched reforms after Arab Spring without going through harsh transitions 🙂 you have better chances forcing Morocco to reform itself in all departments and get a better human rights situation there than forcing it to divide and create an unstable situation 10 miles away from Spain and Europe! Morocco’s government may fall if they loose Sahara cause it is a national priority and it will open the doors to hell! Hard for you to understand but I come from there and it worries me a lot even while I’am a citizen of another nation ! You don’t want that country to be destabilized. I recommend efforts to force them to reform more and more. Morocco and Moroccans care a lot about their image and international standing, that’s the way to improve the situation for everyone

  • Morocco could prove to be an example of how CSP with storage can be combined with wind to get high renewables penetration.

    Uruguays recent experience adds to this. Policy has more impact than any particular technology or regional detail. Hydro was not increased, yet Uruguay has hit 95% renewable electricity. The effect on the economy is salubrious. The remaining goal, electrification of transport. Thats coming.

  • Onshore wind power continues to blow the competition away.

  • Considering the map has Morocco’s resources the same colour as Scotland and the American Midwest, I wouldn’t be surprised to see a CF of 35-50%.

  • What is the cost of the project ?. Per megawatt capacity and how many years depreciation ?.

  • You do realize that coal plants are not always online, do you not? The grid has to engineer around the known outages and the ones that happen without prior notice.

    In the same way the grid will need to engineer around the behavior of wind and solar. Nice thing though, wind and sunshine don’t disappear without prior notice.

  • Renewables integration costs have been studied carefully. This from IEA.

    ” a power system featuring a share of 45 per cent of (wind and solar) may come at little additional long-term cost over a system with no variable renewables at all.”

    ” Texas grid operator data show that the integration costs for conventional power plants are far larger than the integration costs for wind generation,”

    “Studies show nuclear and large fossil plants actually have “far higher integration costs than renewables,”

    Renewables include hydro, geothermal, biomass, and CSP with storage. A renewable future consists of dispatchable renewables and variable ones, and the variable ones, solar and wind, need only be part of the total, about 50% and cost the same as business as usual.

    As far as SA is concerned, it couldn’t be clearer. Drops in coal and gas have come at the expense of wind. The graph shows interconnector does not account for the difference. SA also exports wind energy, not just imports.

    Denmark has the highest reliability grid in EU. It just got 42% annual average wind electricity.

    Denmark also holds the European (and probably world) record for grid reliability, with a SAIDI of around 10 minutes (link). Typical US values are ten times higher.

    The sky is not falling.

  • Here’s the deal. 70% does not need to be dispatchable.

    If there’s good wind production then the wind blows a lot of the time. Wind is cheap and getting cheaper. Wind is closing on 3c/kWh and may well go lower. But even if it stalls out at 3c we can greatly overbuild wind, toss a lot away, and still have electricity for under a nickel. Same holds for solar, estimates in the industry are that solar will drop to 2c to 4c depending on location. With and average of 3c we can overbuild solar a lot and stay under 5c.

    Since the wind and the Sun tend to produce at different times of the day we can overbuild both and directly cover well over 50% of our needs directly from wind and solar.

    Now the overbuilding part. We’re starting to bring EVs and PHEVs online. They’ll spend 90% of their time parked and can suck up a lot of the overbuilding. We’ll work out other ways to create dispatchable loads. So, overbuilding? No much loss.

    We’ve got estimates that grids can be 70% to 80% renewable without storage. Storage is dispatchable supply. Also biofuels give us dispatchable supply and may be part or all of our ‘deep storage’ solution.

    • ‘In fact those places that have tried to increase wind/solar by large percentages have found that prices rise steeply as more NRE is added.”

      No, that is not correct. Germany is enjoying decreasing wholesale costs for electricity.

      “Germany’s finance minister has stated publicly, more than once, that it’s NRE trajectory is unsustainable.”

      Sigmar Gabriel is a pimp for the coal industry. Look at the graph I gave you. Germany’s wholesale cost of electricity has been falling for years. Coal is no longer profitable. Germany’s industrial electricity is below the EU27 and EU28 average. The graph ends with 2012. Since 2012 the industrial price of electricity has fallen from 0.089 euro cents to 0.081 cents. In 2010 the cost was 0.91.

      • German industry pays those prices. German households do not.

        Gee, keep trying mate, you really buy the hype easily.

        • You are right. Those are industrial prices. Retail prices in Germany are high and that is not due to the cost of electricity but due to the taxes and fees added to the cost of electricity.

          The majority of taxes on retail electricity have nothing at all to do with electricity but are general revenue taxes (think sales taxes) that are used to pay for other government activities.

          You might want to temper your insults. You’re kind of light on facts.

          • Done the maths yet?

            Thought not.

            I’ll give you dasy

            I still doubt you can. All I’ve seen is cherry picked stuff that proves ONLY one thing, you don’t do numbers.

            Bye, until you actually prove the numbers wrong. Then we’ll see who is “light on facts”


          • Mr. Dog, it might be best if you took your closed mind elsewhere. I’ve given you facts that you find inconvenient and rather than adjust your thinking to include them you lash out the source.

            One does not need to do very sophisticated math to determine that 0.081 is less than 0,091. If the price of electricity has fallen in Germany over the last five years then it’s clear that renewables are not making electricity expensive. Simple logic and the ability to count is all one needs.

            BTW, the other European country that has added a lot of renewables is Denmark. From 2010 to 2015 the cost of industrial electricity dropped from 0.076 euro cents to 0.066 cents.

            And here’s another interesting tidbit. In France the cost of industrial electricity has risen from 0.63 cents to 0.078 cents during the same timeframe.

        • Crispy, we’re talking about the cost of electricity. We don’t have recent wholesale prices for electricity in European countries so I’m using industrial prices as a stand-in. EU regulations forbid subsidizing energy costs for industry so we can be fairly sure that by comparing industrial prices over time and across countries we’re using a good substitute metric.

          I’ve already stated that German retail prices are much higher and explained that the cost increase is due to taxes and fees. Gasoline prices are generally much higher in Europe than in the US. That’s because of taxes, not because Europe pays more for oil.

          Now you’ve read something on a pro-nuclear site and bought into it with no apparent critical thinking. Right now nuclear advocates are trying to keep the dream alive with this CF stuff. They are using unrealistically low CF numbers and not understanding (or understanding but ignoring) the fact that CF and hours of production are two different things.

          Recent wind CFs are over 40%, not 35%, and heading toward 50%. We’re going to see 60% CFs for wind in our best sites. PV solar with tracking is running as high as 30%.

          Those are real world numbers. With overbuilding and storage wind and solar penetration go higher. More transmission to allow movement of energy from where the wind is blowing to where it is not at the moment allows penetration to go higher. Same with solar, allowing power to flow from uncloudy places to cloudy places.

    • Here’s the deal Bob, you *actually* read the two articles by Dr Morgan, and then you’ll realise what a silly lot of stuff you just posted.

      Really, if maths isn’t your bag, don’t go sprouting nonsense that my 9th grader can demonstrate to be false.

      Seriously, chum, you have not got a clue what your’re talking about.

      Don’t bother responding unless you engage some intellect to the problem, and not just your parroting mouth.

      End of transmission.

      • Wind and solar can only provide 30% of our electricity? Do you really buy that?

        Look at the first paper you list. They use a CF of 35% for wind and 15% for solar. But actual CF numbers for recent installs are higher and getting higher.

        Years back the NREL found wind and solar penetration limits of 30% (eastern grid) to 45% (Hawaiian grid) if no changes were made to the existing grid .

        Since then we’ve converted a lot of coal to natural gas production. NG is highly dispatchable, unlike coal. That means we have more “fill-in” the allows us to exceed those old limits. As we bring dispatchable loads like EVs online the limit rises again.

        Now, add in storage. We can go to 100% wind and solar with storage. That’s a reality, but it’s not the optimal solution. Best is a larger mix of REs, more transmission and more dispatchable loads. So what’s the optimal penetration of wind and solar? Probably at least 40% wind and 30% solar. At least 10% coming from hydro, geothermal, and tidal. That leave us 20% short.

        The last 20%. Economics will determine. We could add a few more percent hydro with existing dam conversion and run of the river. We’ve got untapped geothermal fields in SE Utah and eastern West Virginia.

  • What figures? The cost of wind electricity? PPAs are under 3c/kwhr.

    Are you just denying it, or what? Are you trying to state that DOE and LBL are making up the numbers?

    Ironic that you should state “the echo chamber of media hype ” while citing bravenewclimate, an organization with an obvious nuclear bias.

    My guess is, DOE and LBL actually know how grids function.

    “the remaining 70% of generation that MUST be dispatchable?”

    For some reason, nuclear fans just can’t seem to realize that there are dispatchable renewables. Be careful with that word dispatchable. What is needed is not so much dispatch able sources as predictable and flexible ones. That means they need to have high ramp rates and respond instantly to controls. That is definitely not the case with coal and nuclear, two large thermal sources that take hours or days to start up, and ramp more leisurely. They also experience unplanned outages that seriously undermine grid stability and force the use of large, fast reserves.

    Read NREL Futures Study.

    Its not 100% solar and wind. Its 50%. And as I already quoted, 40% and more variable renewables can be integrated with little change. And a 2014 update to the study showed renewables could be integrated at business as usual costs.

    These are serious questions. If you are serious, you need to educate yourself.

Comments are closed.