transmission grid operator, and boost market openness and competition.<sup>76</sup> ANRE is in the initial stages of setting up its regulations and policies. Even when it begins operations fully, ANRE’s scope will be defined by the power generation regime under the RE law with limited oversight of the transmission and distribution grids. Besides, as research shows, without a pre-requisite step of fully unbundling ONEE, the establishment of a regulator could end up not having the expected effect on the performance of the utilities.<sup>77</sup>

# 3 CONCLUSION

This paper analyzed Morocco’s experience with power sector reforms from 1990 to 2017. It draws on technical and financial data, stakeholder interviews and published studies. It described the chronological timeline of reform and examined the sector’s performance along the security of supply, electricity access and affordability, utility efficiency and financial viability, and tariffs and cost-recovery.

Morocco charted its own distinctive path of power sector reform. It selectively introduced private sector participation for generation capacity expansion and electricity distribution in certain cities, while retaining a strong, state-owned and vertically-integrated national power utility operating as a single buyer at the core of the sector. Until recently, the country eschewed an independent regulatory entity. The power sector has been guided by strong top-down policy mandates that have served to align the disparate actions of political parties and sector institutions. Ambitious targets for electricity access, liberalization, and renewable energy investments were conceived as an integrated approach to contribute to economic development by relieving fiscal pressures, reducing external dependence on fossil fuels, and positioning the country as a leader in renewable energy. The results have been impressive. Since 1990, Morocco has more than tripled its power supply, while growing renewable energy to account for one-third of the total and relying on the private sector to supply just over half of the electricity generated. Rural electrification has accelerated rapidly from 18 percent in 1995 to virtually 100 percent in 2017. While operational efficiency has been broadly adequate, performance has fluctuated over time. Moreover, the sector’s achievements through this selective approach to reform have come somewhat at the expense of the financial viability of the incumbent utility, the <mark>National Office for Electricity and Water (ONEE),</mark> which has suffered from lack of cost-reflective tariff-setting and an array of entrenched cross-subsidies. Other vulnerabilities include the continued but declining dependence on electricity imports, external price volatilities of imported fossil fuels, and a territorialized electricity distribution model that could be disrupted by grid integration of renewable energy.

Morocco’s performance along the four key dimensions established in this paper is briefly stated here and summarized in Table 8.

On security of supply, Morocco has made important progress. Power generation has grown from under 10TWh in 1990 to 32TWh in 2017 and capacity has grown from 5,233MW in

> 76 (IEA, 2014, p. 56)

> 77 In the literature, regulation makes sense when there has been unbundling and some private sector entry into the sector (Bacon, 2018, p. 15).

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