Business Sustainability for Solar Industry in Morocco - Case Study Example

Business Sustainability for Solar Industry in Morocco By: Professor: Class: University: City: State: Date of submission: Business Sustainability for Solar Industry in Morocco Introduction Globally, businesses are becoming environmental conscious especially with stringent measures to curb environmental degradation. Environmental and sustainability assessments is important as it assists businesses in quantification and understanding the actual impact that their processes have on nature, economy, society, and business opportunities for manoeuvring while developing human based resources and the capability of the environment to absorb the pollutants. The core of the research is sustainability of the Morocco solar industry. The renewable energies (RES) are becoming identity sign in the European Union’s (EU) energy policy. The aim of promoting such policies is to ensure adequate responses to climate change. It is important to note that the contribution of the renewable energies has remained marginal within the Southern Mediterranean energy mix. As a result, the Union for Mediterranean (UfM) launched the Mediterranean Solar Plan (MSP) for supporting the deployment of renewable energies within the region (Library of the European Parliament, 2014). Consequently, Morocco is one of the states that have shown interest in participation, which would enable it exploit the critical solar potential to increase energy supply, reduction in energy dependency, and diversification of the energy mix. Within the region, morocco is better placed in implementing MSP considering that it has relatively significant solar energy installed capacity. Through MSP, Morocco would supply its internal electricity markets with sustainable energy and export the surplus to the EU market; as a result, it would benefit from green trade scheme. The sources of energy used globally are the main contributors of environmental degradation; however, with focus on the solar exploitation to produce energy, the country is likely to among the states focused on ensuring sustainable business development. Sustainability challenges of the solar industry Transitioning to a green economy that is compliant with various ecological balances presents numerous opportunities for creation of wealth and sustainable employment opportunities. Moreover, solar energy is becoming part of the major aim of new sustainable development mechanisms in Morocco. Various environmental constraints such as pollution, water stress, vulnerability to climate change, and overdependence on strong energy and limitations associated with economic growth and social development of creating jobs and reducing both spatial and social disparities often require shift in the economic modelling. However, the model needs to focus on green and inclusive economy. Morocco is regarded as a country that fighting climate change is the survival question. Currently, the country is regarded as the forerunner in transitioning to the low-carbon economy through adequate integration of solar energy in its energy mix. Morocco deserves sustainability credit for setting ambitious renewable energy goals that aims at dropping all the fossil fuel subsidies. Solar energy offers sustainable solution to the challenges associated with energy. Solar energy systems not only produce energy with no greenhouse gas generation but also present opportunities for taking responsibility for mitigation and management of various social and environmental impacts during the lifecycle of the energy systems (Fraunhofer Institute for Solar Energy Systems ISE, 2012). However, there are hurdles associated with implementation of solar energy in Morocco. About sixty years ago, the price of the solar panels was high, but slowly and precipitously, the costs began to decline. In Morocco, the main grid infrastructure that was built with aim of carrying consistent levels of generation is struggling to cope with the variability presented by the solar energy. Even though the national grids are adapting, the infrastructural development, on the other hand, remains huge and work slowly. Energy is becoming an important aspect in ensuring business effectiveness, efficiency, and reliability in offering the needs of the customers. Nonetheless, solar energy presents a very strong seasonality. Even though connection of all states globally might assist in solving the problem, the technology is far from reaching such situation. Like any other source of renewable energy that relies of weather, the capacity factor holds back solar energy. To address some of the challenges associated with initial installation costs and undertaking public education on the significance of solar energy, Morocco would require government subsidies at least in the next 25 years to ensure that the industry competes against the established technologies of fossil fuels, which are highly pollutant. In addition, there are safety and cultural issues that impact solar industry in Morocco. The industry presents several challenges associated with health and safety measures considering that most people consider it hazard free, thus fail to take considerable safety measures (United Nations Economic Commission for Africa O­ffice for North Africa, 2014). Even with projections into 2040, significant obstacles remain. These challenges include instability in the currency and high financing costs, which makes solar energy very expensive at the initial stages. Before the country solves these challenges, achievement of its desired sustainable goal might be a great challenge. Trend analysis for future of solar industry The Middle East and North Africa (MENA) have been experiencing steep increment in the energy demand in the past decades due to the population and economic growth and improved standards of living. Nonetheless, such trend is considered unsustainable in the long run especially for country such as Morocco, which imports energy. To ensure long-term security of long-term supply of energy and less independence on the hydrocarbons fuels, Morocco is encouraging the development sustainable business through solar energy. As a result, the country initiated RES initiatives with an aim of reaching the national target of increasing the share of solar energy to 42% by 2020. With the 2040 long-term strategy, the country implemented The Moroccan Integrated Solar Project, which aims to achieve the installation capacity of 2,000 MW on the five sites and ensure that there is annual production of the 4500 GWh, which reflects the 18% of the current national production. Morocco projects the investment cost of the project to be US$9 billion; nonetheless, from the environmental sustainability perspective, the project save 1 million Toe and 3.7 million tonnes based on the emissions of CO2 annually. Morocco capitalizes on its proximity to the European country and the relatively lower cost of labour while diversifying, opening, and making its economy market oriented. Over the past five years, the country has shown significant growth in its economy with its energy sector relying on the imported fossil fuels, which continue to have negative impacts on the environment and people. Since the beginning of 2000, there have been increments in the share of the imported electricity, hydroelectricity, and natural gas. However, though its National Energy Strategy, Morocco has been able to project target for the renewable energy, legal, and regulatory framework that favours the development of the energy. Initially, the main objective of strategy was to increase the contribution of the solar energy within the primary energy consumption by approximately 5% in 2009. However, in 2012, the project stood at 8% and 12% in 2020 (Schinke & Klawitter, 2016). In 2030, Morocco projected the solar consumption to stand at 20%. With the current commitment and strategies to ensuring compliance with the sustainable development goals, the share of the solar energy is projected to reach 42% in 2020. To achieve such objective, the implementation strategy also considers Moroccan Solar Plan with the installation of 2,000 MW. Based on the political environment, the Morocco government has been keen on implementing laws and development of various strategic plans that ensure adequate exploitation of solar energy. In addition, there is commitment to ensure industrial compliance with emission regulations and signing of regional and international agreements that aim to support the growth of solar exploitation. In the past decades, there have been economic growth, improved living standards, and environmental consciousness. As a result, the country has been focusing on importing fossil energy, about 90% to run the economy. With such trends, it is projected that in 2040, Morocco would depend highly on imported fuels. These challenges present opportunities for investing within the solar industry and adequately exploiting the free solar energy. The aim of investing in solar industry is to reduce the environmental pollution; however, the current technology used in the country is low which makes the reduction levels low. As a result, Morocco has been partnering with technologically advanced countries such as UK and Japan to replicate such development initiatives. From environmental perspective, solar energy presents numerous opportunities in addressing sustainability issues; however, it is affected greatly with the weather conditions. Scenario for the future sustainable solar industry In the recent years, there has been growth in the solar energy. In 2005, solar produced about 16% of the energy. Currently, the attention has been focused on the future of solar energy for various reasons: security, environmental, economic, and social. Scenarios are vital tools in dealing with the complexities and uncertainties associated with the future considering that they allow exploration of the alternative futures and provision of insights to the Moroccan energy planners (Islam, Shahir, Uddin & Saifullah, 2014). To achieve such scenario, it is important to influence the perception of the public, capturing the current level of understanding associated with the economic and physical principles, and highlighting the key emerging trends: social and economic. Energy remains the building block of the modern civilization and prerequisites aimed at ensuring adequate, sustainable development. From 2011 to 2030, it is projected that the global energy consumption would rise by 36% with a growth of 1.6% per annum with fossil fuels comprising of 88% of the share. Sustainability is becoming important even as various business sectors focus on implementing various environmental systems and health and environment safety practices. In addition, fossil fuels are the major pollutant of the environment and their ability of the atmosphere is greenhouse gases increases the global temperature through global warming phenomenon. With such trend, it is projected that many countries would seize to exist due to increased global temperatures that cause ices to melt and increasing the ocean levels. Therefore, while handling issues associated with environmental sustainability, it is important to focus on the sources of energy that emit less or no greenhouse gases. Considering that Morocco is a developing country that has depleting nature mono-fuel dependent policy of energy, the need to find alternative source of fuel might be imperative. The World Energy Council (WEC) presented an approach of composing the energy futures to 2050. Even though the globally known scenarios are normative in nature, the WEC approach is explanatory that aims to provide the decision makers with the neutral tools with facts to enable them measure the impact of their choices in the future. Instead of encouraging the policy makers on solar energy to the activities that they need to undertake to achieve the desired goal, the scenario presented by WEC gives them the opportunity of testing the key assumptions that would shape the solar energy industry tomorrow (World Energy Council, 2013). Based on the scenario, it is important to note that the complexity of the energy system is likely to increase by 2040, efficiency of the energy is important in dealing with the demand that outstrip the supply within the country. Furthermore, the global economies might experience challenges in meeting the required target of 450ppm (parts per million) without implementing unacceptable prices of carbon. References Fraunhofer Institute for Solar Energy Systems ISE. (2012, November 30). Support for Moroccan Solar Plan: Solar Technologies in Morocco – Industry and Value Chain Assessment. Retrieved November 25, 2016, from https://www.giz.de/en/downloads/giz2012-en-solar-plan-morocco.pdf Islam, M. T., Shahir, S., Uddin, T. I., & Saifullah, A. (2014). Current energy scenario and future prospect of renewable energy in Bangladesh. Renewable and Sustainable Energy Reviews, 39, 1074-1088. Library of the European Parliament. (2014, May 8). Solar energy development in Morocco. Retrieved November 25, 2016, from http://www.europarl.europa.eu/RegData/bibliotheque/briefing/2013/130515/LDM_BRI(2013)130515_REV1_EN.pdf Schinke, B., & Klawitter, J. (2016). Project: Middle East North Africa Sustainable ELECtricity Trajectories (MENA-SELECT). Retrieved November 25, 2016, from http://germanwatch.org/en/download/15120.pdf United Nations Economic Commission for Africa O­ffice for North Africa. (2014). The green economy in Morocco. Retrieved November 25, 2016, from http://www.uneca.org/sites/default/files/uploaded-documents/SROs/NA/AHEGM-ISDGE/egm_ge-_morocco.pdf World Energy Council. (2013). World Energy Scenarios: Composing energy futures to 2050. Retrieved November 25, 2016, from http://www.worldenergy.org/wp-content/uploads/2013/09/World-Energy-Scenarios_Composing-energy-futures-to-2050_Executive-summary.pdf Read More