Mozambique: A Regional Electricity Exporter

In celebration of the recipient of AOP’s ‘Person of the Year Award’, H.E. President Felipe Nyusi, we are running content from the Africa Energy Series Report 2020: Mozambique, which highlights Mozambique’s gas revolution. H.E. Nyusi will receive the prestigious award at the Mozambique Gas & Power 2021 Conference & Exhibition.

Mozambique’s electricity market is dominated by hydropower generation capacity, largely utilized for exports to neighboring South Africa and Zimbabwe via the Southern African Power Pool (SAPP).

Nearly all of its electricity is derived from the 2,075 MW Cahora Bassa Dam, the largest hydro dam in Southern Africa. The country only procures up to 500 MW from the dam for domestic use, and transports the rest to South Africa, Zimbabwe, Botswana and the wider SAPP. As a result, the dam represents a substantial source of revenue for the Mozambican economy.

Despite producing excess electricity, Mozambique’s electricity access rate stands at approximately 40%, with urban access rates estimated at 67% and rural access rates estimated at a mere 27%.

Managed by state-owned utility Electricidade de Moçambique (EDM), the national grid has been developed as three separate systems: northern (containing a 220 kV transmission system from Songo substation to Nampula and continuing at 110 kV to Nacala); central (containing a 110 kV system linking hydroelectric power stations at Chicamba and Mavuzi with the Beira-Manica corridor); and southern (containing a 110 kV networking from Maputo to XaiXai, Chokwe and Inhambane).

That said, the transmission system does not cover all areas of the country, and power to the capital Maputo is re-imported from South Africa’s ESKOM, as no direct connection exists between the Cahora Bassa dam and the city.

Moreover, the country’s single transmission line delivering power to the northeastern region remains susceptible to outages.

As a result, the government is working to provide a more reliable and efficient electricity supply, and to expand generation and transmission capacity to meet current and future demand, which is estimated to increase at an average annual rate of 8.5% until 2040. An expansion of the transmission grid is planned until 2025, targeting increased connection from the northern region to Maputo in the south through one 400 kV high voltage, alternating current line and one 800 MW high voltage, direct current line. In turn, this would enable the grid to service the country’s major consumption and industrial zones, as well as better connect to the South African market. At an estimated cost of two billion dollars, the line will transport electricity generated from the Mphanda Nkuwa and Cahora Bassa dams to provide power to the SAPP.

Off-Grid Activity and Renewable Potential

Because Mozambique is targeting the provision of grid-connected access to 50% of all households by 2030, off-grid solutions remain crucial to achieving electrification objectives. While private sector-backed, off-grid electricity solutions remain in their early stages of development, the size of the market is estimated at approximately four million households. Most of the country’s off-grid technologies have been piloted through the Mozambique Energy Fund, which installs diesel-based mini-grids, solar home systems, solar irrigation systems and solar plants with battery backup to electrify rural institutions, micro-enterprises and households. Following a call for tenders in March 2020 for the construction of five solar mini-hybrid grids in the provinces of Zambézie and Nampula, the Fund recently released another project for 11 photovoltaic mini-grids, targeting 11 villages in the provinces of Niassa, Nampula, Tete, Sofala and Manica. The Government will be developing the projects through public-private partnerships with Independent Power Producers.

In conjunction, Mozambique holds vast renewable potential, confirming wind projects in over 12 locations with a total potential of 5,000 MW and over 33 sites for biomass projects with a total potential of 2,000 MW. Meanwhile, its hydroelectric potential is among the highest on the continent, estimated at 19,000 MW. EDM is currently in the process of establishing bidding mechanisms for renewable energy projects that will heighten transparency and foster competition by standardizing tender processes.

Furthermore, the country’s GET FiT Program aims to fast-track development of smaller renewable energy generation projects through a variety of instruments, including but not limited to the availability of technical assistance, renewable grid integration support, mitigation of off-take risk and viability gap funding.