Morocco’s southern regions offer lowest green hydrogen costs, study finds

A new techno-economic study of green hydrogen production using solar and wind energy has found that Morocco’s Dakhla-Oued Ed-Dahab and Laayoune-Sakia El Hamra regions offer significantly lower production costs than northern areas such as Tangier and Oujda.

The findings further reinforce Morocco’s position as one of Africa’s most competitive green hydrogen producers, alongside Egypt, Namibia and South Africa, according to Germany’s H2Global Foundation.

The study, published in the online journal ScienceDirect, calculated the levelized cost of hydrogen (LCOH) across the examined regions. Dakhla-Oued Ed-Dahab recorded the lowest cost at $5.42 per kilogram, followed by Laayoune-Sakia El Hamra at $5.57 per kilogram. Northern regions showed higher costs, with Tangier at $6.86 per kilogram and Oujda at $7.24 per kilogram.

The paper analyzes the renewable energy mix, with solar photovoltaic accounting for 56.7% of Dakhla’s energy supply and wind contributing the remaining 43.3%. Laayoune relies more heavily on solar, which represents 70.3% of its energy mix. In the north, solar dominates more strongly: 97.7% of Oujda’s energy comes from photovoltaic sources and just 2.3% from wind, while Tangier uses 87% solar and 13% wind.

Similarly, Dakhla has the lowest net present cost (NPC) at $4.02 million, followed by Laayoune at $4.13 million. Tangier and Oujda are higher, at $5.02 million and $5.37 million, respectively.

However, the study estimates that LCOH could decline significantly across all regions. Dakhla could reach $3.89 per kilogram, Laayoune $4.13 per kilogram, Tangier $5.59 per kilogram, and Oujda $6.95 per kilogram, making southern regions even more attractive for industrial-scale investment.

The study also finds that hydrogen storage is favored over battery storage in all regions, as batteries have a higher net present cost. Seasonal storage peaks in May, June and July, when solar and wind resources reach full capacity.

The study concludes that while southern regions offer the lowest costs, the scale of investment depends on local resources and economic conditions, with the goal of making Moroccan green hydrogen globally competitive.