Mozambique Lights Up Power Sector with Solar, Hydro Investments

At 187 GW, Mozambique holds the largest potential power generation capacity in Southern Africa. Moreover, as hydropower, coal, natural gas and solar each continues to increase their respective share in the country’s energy mix, Mozambique is positioning itself as a major regional power producer.

Despite prolific power generation potential, Power Africa notes that Mozambique’s access to electricity rate stood at only 31.1% in 2020, due to unfavorable market conditions and limited transmission and distribution networks.

Accordingly, the country holds significant potential for domestic infrastructure development, in which government priorities regarding grid expansion to rural areas, power infrastructure construction and additional generation facilities are creating investment opportunities for both private and public sector players.

Hydropower Leads the Way

Mozambique’s predominant power generation source comes from its vast hydropower resources. The country’s hydropower potential sits at approximately 12,500 MW – the largest in sub-Saharan Africa. One of Mozambique’s most significant renewable energy achievements, and its primary power generation source, is the Cahora Bassa Hydropower Plant.

This 2,075-MW facility represents the largest hydro plant in sub-Saharan Africa, supplying vital electricity domestically and to the wider region. Operated by Independent Power Producer (IPP) Hidroélectrica de Cahora Bassa, the facility has not only positioned Mozambique as a major facilitator of Africa’s energy transition, but also emphasized the potential of the resource in addressing regional power needs.

Cahora Bassa exports approximately 73% of the electricity produced at the facility to Southern African Development Community members through the Southern African Power Pool. Accordingly, Mozambique only uses 500 MW domestically, emphasizing the need for alternative power generation solutions to fulfill increasing domestic demand.

In addition to the Cahora Bassa plant, there are currently five other hydropower facilities operated by the privatized national utility, Electricidade de Moçambique (EDM), which feed electricity to Mozambique’s national grid.

These include the 52-MW Mavuzi plant, 38.4-MW Chicamba plant, 16.6-MW Corumana plant, 1.9-MW Cuamba plant, and 0.73-MW Lichinga plant. With additional proposed projects in the pipeline including the 1,500-MW Mphanda Nkuwa project and 1,245-MW north bank expansion at Cahora Bassa, Mozambique is prioritizing the development of its hydropower resources, serving as a model for other hydro-rich African countries.

Solar Presents Off-Grid Solutions

One of the primary challenges hindering socioeconomic growth in Mozambique is the low access to electricity rate in rural communities. With only 27% of rural households currently connected to the national grid, the Mozambican Government is prioritizing grid expansion and alternative power solutions to address these deficiencies.

Accordingly, solar has been identified as the most effective power generation source, particularly for remote areas where grid connection is unfeasible.

Estimated at 2.7 GW, Mozambique’s solar potential is largely untapped, presenting significant investment opportunities that could increase electrification and boost connectivity. The country’s current installed capacity is measured at 2.2 MW, with 70 MW currently under construction and 300 MW under study. Mozambique’s only large-scale solar facility is the 40-MW Mocuba Solar IPP project, developed by Norway’s Scatec Solar.

The project has increased the country’s installed photovoltaic (PV) capacity from 17 MW in 2018 to 60 MW in 2021, supplying additional electricity to the national grid. In a bid to expand solar capacity, the Government has commissioned the construction of the 41-MW Metoro Solar Power Plant in the Cabo Delgado province.

In addition, it launched a tender for the development of three solar PV projects in 2020 – adding 120 MW to the national grid – and an additional five solar mini-grids in 2021 – which would create an estimated generation capacity between 75 and 230 kilowatts peak.

By prioritizing solar developments, Mozambique is increasing the sector’s share in the energy mix, creating a feasible, off-grid solution for a large portion of the population, and strengthening renewable penetration in the market.

Natural Gas to Enhance Domestic Capacity

With the third-largest reserves in Africa, natural gas will play a vital role in addressing Mozambique’s domestic power demand. The country has approximately 125 trillion cubic feet of proven gas reserves and is fast-tracking the development of large-scale liquefied natural gas (LNG) projects in response to growing domestic and regional energy needs.

Billion-dollar LNG developments and subsequent associated investment not only promise to contribute to electrification initiatives, but also act as a poverty alleviator, spurring industrialization and job creation country-wide.

Accordingly, gas-to-power solutions are garnering both regional and international interest and associated projects are gaining momentum. Notably, in December 2020, Mozambique’s EDM secured up to $200 million from the U.S. International Development Finance Corporation and up to $50 million from OPEC for the development of its Central Térmica de Temane Project.

The 450-MW gas-fired power plant is expected to be operational in 2021 and will dramatically increase natural gas’ current installed power generation capacity, serving as a critical power solution for the country.

With one of the lowest electrification rates globally – and yet holding some of the largest natural gas and renewable energy potential in sub-Saharan Africa – Mozambique is rapidly developing its power generation infrastructure to be able to leverage its resources to address domestic power demand.

Subsequently, with small- and large-scale power developments taking place both across the country and across energy and non-energy sectors, Mozambique’s power sector is in the midst of a transformation that will drive long-term socioeconomic growth and success.

Source: africaoilandpower