Morocco (Normalized ranking: 1, RECAI ranking: 19)
Morocco has ambitious targets to generate 52% of its energy from renewables by 2030 and 80% by 2050.2 While it fell just short of its interim target in 2020, the market is now on track to meet its 2030 goal.
Boasting 3,000 hours of sunshine a year, Morocco is an ideal setting for solar power,3 while topographical features such as the Atlas Mountains offer pumped storage hydropower, allowing flexibility to be built into the power system. Policy support has also been strong, with the market reaching the lowest renewable prices in the world at less than three US cents per kilowatt-hour in the wind sector.
Looking to the future, Morocco is seeking to build a green hydrogen sector. It is counting on foreign direct investment through the Moroccan Agency for Sustainable Energy’s institutional framework to bring together permit processes, land acquisition and financing, and, potentially, provide a state guarantee for the investment.
Chile (Normalized ranking: 5, RECAI ranking: 17)
Blessed with tremendous potential for renewable energy generation4, Chile is striving to achieve carbon neutrality by 2050. By the end of 2020, it was generating more than half of its electricity from renewables, and it is on track to meet its target of 70% by 20305.
Chile’s success to date can be partly attributed to its innovative auction process: Electricity providers can bid for contracts in four supply blocks — whole-year 24/7, quarterly, daylight, and nighttime. Nevertheless, challenges persist for the renewables sector, including getting power from where it is produced (in the north and south), to the metropolitan center around Santiago. The National Electricity Coordinator estimates US$3.2b will need to be spent on transmission projects by 2025.
Chile is taking on a considerable and multifaceted challenge, including phasing out its 28 coal-fired plants by 2040. Added to this, regulation of stand-alone storage systems to make up for the transmission deficit has taken longer than expected to be approved, and price allocation mechanisms will have to be resolved if the market is to resume investing.
Chile sees green hydrogen as a big part of its plan for carbon neutrality and wants to be the world’s top exporter of the fuel by 2050. The path toward this objective is set out in the National Green Hydrogen Strategy, but the mechanisms to implement such a strategy remain unclear. The ambition is good news for the world, however. Decarbonizing Chile’s mining industry would be a big step toward a global transition to a low-carbon economy.
Portugal (Normalized ranking: 8, RECAI ranking: 25)
Portugal has traditionally relied on hydro and wind power, but 2019 marked a change in direction for the market. After years of underinvestment in solar PVs, it allocated 2.3GW of new solar power capacity in its 2019, 2020 and 2021 solar auctions. The tenders set world records for the lowest solar tariff price.
In 2020, Portugal also took the unconventional approach of awarding eight of the 12 blocks put to auction to the storage option. As a result, it was one of the first markets to possess so-called large-scale hybrid projects with renewable generation plus storage.
Maintaining its innovative approach to renewables, Portugal’s 2021 auction allocated 263MW of floating PV at seven dams. On the current trajectory, boosted by 12GW of solar projects in the pipeline, the market is expected to reach 80% of its electricity production from green energy by 2030.