Casablanca – Dakhla is emerging as one of the most competitive locations for green hydrogen production in Morocco, according to a recent techno-economic and environmental study comparing four cities across the country. The research estimates the levelized cost of hydrogen at $10.62 per kilogram in Dakhla, compared with $15.63 in Tangier, while Benguerir and El Jadida occupy intermediate positions.

The difference, approaching 50% between Dakhla and Tangier, highlights the role of geography in the economics of renewable hydrogen. The study indicates that the quality and consistency of solar and wind resources can have a substantial influence on production costs, particularly when hydrogen is produced through an autonomous system that relies entirely on renewable electricity.

Dakhla benefits from strong solar irradiation and favorable wind conditions. The relatively stable availability of solar resources throughout the year provides conditions for operating renewable generation equipment more consistently. When combined with wind power, this resource base can help supply electricity to electrolyzers while reducing reliance on conventional power sources.

The research modeled a standalone hybrid energy system incorporating photovoltaic panels, wind turbines, batteries and a 20-kilowatt alkaline water electrolyzer. The system was designed to operate without a connection to Morocco’s national electricity grid.

The researchers used three independent optimization techniques — particle swarm optimization, ant colony optimization and grey wolf optimization — to test different combinations of renewable generation and storage. The objective was to identify configurations capable of producing hydrogen at the lowest possible cost while maintaining specified reliability standards.

The modeled systems were required to keep the probability of an electricity supply shortage below 1%. At the same time, renewable electricity that could not be used because of excess generation had to remain below 50% of total renewable production.

The results suggest that Dakhla’s advantage does not come exclusively from the amount of renewable energy available. Financial and technical assumptions also have a significant effect on the final cost. The discount rate used in economic calculations was identified as one of the most influential variables.

Battery characteristics were another important factor. Their cost, capacity, efficiency and operating life can change the economics of an autonomous renewable energy system because storage is needed to manage fluctuations in solar and wind generation.

This has implications for the financing of future hydrogen projects. Even if a site has strong renewable resources, high financing costs or expensive storage systems could reduce its economic advantage. Conversely, falling battery and electrolyzer costs could improve the competitiveness of locations with strong renewable potential.

The study also assessed the environmental performance of renewable hydrogen production. It estimated that producing one kilogram of hydrogen using Morocco’s current electricity mix would result in emissions of about 41.12 kilograms of CO2.

Under the autonomous renewable configuration modeled for Dakhla, emissions fell to approximately 2.27 kilograms of CO2 per kilogram of hydrogen. The difference represents a reduction of about 94.4%.

The comparison illustrates why the source of electricity is critical to the environmental performance of hydrogen. Hydrogen production through electrolysis can have a substantially lower carbon footprint when the electricity comes directly from renewable sources rather than from an electricity system that still contains carbon-intensive generation.

The findings come as Morocco seeks to develop a domestic green hydrogen industry while reducing its exposure to imported energy. The country imported close to 90% of its total energy requirements in 2022, reflecting its limited domestic fossil-fuel resources.

Morocco has also committed to reducing its greenhouse gas emissions by 45.5% by 2030. Green hydrogen is being considered as one component of a broader strategy covering renewable energy, industrial decarbonization and the production of low-carbon fuels and industrial inputs.

The government’s “Morocco Offer” provides a framework intended to facilitate investment in the hydrogen sector. It addresses issues including land access, administrative procedures and infrastructure requirements. Large areas of public land in southern Morocco have been identified for potential hydrogen-related developments, with an initial phase covering around 300,000 hectares within a broader area of approximately 1 million hectares.

Several major projects illustrate the scale of investment being considered. The Chbika project, involving TE H2, Copenhagen Infrastructure Partners and A.P. Moller Capital, is planned to begin with about 1 gigawatt of solar and wind generation capacity. Its renewable electricity would be used for seawater desalination and electrolysis, with an objective of producing approximately 200,000 tonnes of green ammonia annually for export.

OCP has also announced a decarbonization program valued at around $13 billion. Among its objectives is reducing dependence on imported grey ammonia by increasing the production of lower-carbon ammonia in Morocco using renewable energy.

Other companies, including Nareva and ACWA Power, are pursuing projects connected to green ammonia, synthetic fuels and green steel. These developments point to a potential hydrogen value chain extending beyond the production of hydrogen itself.

The international market provides an additional reason for Morocco to develop this sector. Global hydrogen demand increased from 62.4 million tonnes in 2010 to almost 100 million tonnes in 2024. However, more than 99% of hydrogen production worldwide still depends on fossil-fuel-based processes.

Those conventional production methods generated an estimated 980 million tonnes of CO2 emissions in 2024. At the same time, interest in low-carbon hydrogen has increased sharply. Announced investment in the sector rose from approximately $90 billion in 2020 to $680 billion in 2024, while the number of announced projects increased eightfold.

The Dakhla study, however, produces a higher hydrogen cost estimate than several earlier assessments of Morocco’s potential. Previous research has reported costs ranging from $2.23 to $24.75 per kilogram, depending on the technologies, locations and economic assumptions used.

One earlier study combining solar and wind generation with PEM electrolysis in Dakhla estimated a cost of approximately $2.54 per kilogram. Another assessment estimated $5.80 per kilogram for a standalone photovoltaic system. Other research placed Moroccan solar-based hydrogen production at between $6.20 and $6.50 per kilogram and wind-based production at between $8 and $13 per kilogram.

These differences do not necessarily contradict the latest research. Hydrogen production costs are highly sensitive to assumptions about equipment prices, financing, storage, system reliability, renewable resource quality and electrolyzer technology. Different studies can therefore produce substantially different results even when examining the same location.

The latest research attempts to broaden the comparison by examining four cities under a common framework and applying three optimization algorithms. It also combines economic calculations with environmental analysis, sensitivity testing and uncertainty assessment.

For Morocco, the findings point to the importance of selecting project locations according to the combined availability of renewable resources and the economic conditions required to develop them. Dakhla’s strong performance in the study indicates that its solar and wind resources could provide an advantage for future projects, but resource quality alone will not determine commercial success.

Infrastructure will also be important. Large-scale hydrogen production requires renewable generation capacity, electrolyzers, energy storage, water resources, transport infrastructure and access to markets. Export-oriented projects will additionally require facilities capable of handling hydrogen derivatives such as green ammonia or synthetic fuels.

Morocco’s longer-term hydrogen strategy is expected to focus initially on industrial applications, including fertilizer production and green ammonia, alongside export opportunities. Over time, hydrogen and its derivatives could also be used in areas such as heavy transport, industrial heat, synthetic fuels and aviation.

Dakhla’s relatively favorable production economics therefore give the city an important position in Morocco’s emerging hydrogen sector. The latest study does not establish a fixed commercial price for hydrogen in the region, but it does provide evidence that local renewable resources can significantly affect the cost of autonomous hydrogen production.

The eventual development of Dakhla and other potential hydrogen hubs will depend on how effectively Morocco combines renewable energy resources with technological improvements, competitive financing and the infrastructure required to connect production with domestic and international demand.