Energy consumption and energy poverty in Morocco

Most of the world's increase in energy demand will come from the global south where there is the need to improve living standards while succeeding the energy transition. Herein we first study determinants of energy expenditure by source as well as energy poverty in Morocco. We find that socioeconomic determinants of energy consumption are in line with the literature on developed countries but, instead, elasticity magnitudes are generally higher, in line with the literature on low-income-countries. We also find that inequalities have an important impact on demand patterns: income elasticities are higher for households that consume the most for the case of electricity while the opposite happens with other forms of energy commonly used by low-income households. Regarding affordability, our results suggest that 14% of Moroccan households are energy poor. Energy poverty households usually are large families living in rural areas that are headed by inactive men with no education. We then measure the energy poverty gap per income quintile and asses to which extent fading-out subsidies for households for which PV panels are competitive could free resources that could be recycled to fill the energy poverty gap. In this regard we find that, if subsidies are dismantled for households for which PV panels are competitive when exposed to the natural price, the government would free 25% of the budget needed as a transfer to bridge the electricity poverty gap for the poor.