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On-Grid, Off-Grid: The Double-Sided Solar Solution for Mozambique


Mozambique’s renewable energy landscape is in its infancy, with 60 MW of installed solar capacity in 2022. However, the Mozambican government have a vision for the country, based on clean electrification for all.

The southern African nation possesses serious solar wealth, with 23 TW of its 23,026 GW estimated renewable potential attributed to solar. Despite economic challenges and high inflation, coupled with the shocks of Covid-19 and the Russian war in Ukraine rippling across the world, Mozambique continues to show an increasing appetite for renewables, both on and off the grid.

Shining energy landscape

Over the past two decades, Mozambique has seen steady economic growth, combined with a suite of actions aimed at strengthening the energy sector. The introduction of the Electricity Law in 1997 opened the way to greater participation of the private sector, including the facilitation of  Power Purchase Agreements (PPAs).

More recent reforms, including an update of the Electricity Law in 2022 that specifically addresses renewable energy and new off-grid regulations, have led to an even more investor-friendly landscape. The Power Infrastructures Master Plan 2018-2043 expects that 50% of energy generation in 2043 will come from renewable energy sources. Under this new plan, 125 MW of solar is in development, of which 60 MW has already been built. These projects have until now all taken the form of a Public Private Partnership (PPP) model with direct negotiations. A number of plants have begun construction in 2022 and 2023, soon to be followed by at least three others, for which the PPAs have already been signed.

Another positive step was the establishment of the first Renewable Energy Auctions Programme, PROLER, set up by the Government of Mozambique in 2020 and funded by the European Union. This programme provides a clear statement from the Government of Mozambique, ensuring that renewable energy projects follow competitive and transparent procurement processes. The first tender under the programme was the Dondo solar power plant which was won by Independent Power Producer (IPP), Total Eren (now acquired by Total Energies), with a tariff of $52.45/MWh, and is supported by Electricidade de Moçambique (EDM) and the French Development Agency (AFD). The project involves the design, financing, construction and operation of a 40 MWp solar photovoltaic power plant in the Dondo district, about 30 km from the port city of Beira. The plant will generate electricity to feed into the grid of EDM and is due to start construction before the end of 2023.

The PROLER programme is a game changer for promoting private sector investment in renewables in Mozambique. The set up ensures investor confidence through feasibility studies, and the facilitation of optional financial packages and guarantees. A transparent bidding process promotes competition between investors, delivering the lowest possible electricity tariffs to the end consumer. Future tenders are expected to be announced in Q4 of 2023, including the selection of two independent power producers for two 30 MW solar photovoltaic power plants and one 50 MW wind power plant.

But Mozambique has an enormous challenge that spreads far beyond where the national grid ends.

The underdog: off-grid solutions

Of Mozambique’s 32 million inhabitants, 65% are living in rural areas where less than 6% have access to electricity, compared to 34% of the country’s urban population.. By 2030, the Government of Mozambique hope to transform this landscape, and achieve universal energy access by the end of the decade. This would require capacity to more than double to almost 6,500 MW.

Solar is undeniably the most intuitive renewable technology when it comes to off-grid energy solutions. These options are particularly attractive for the Commercial and Industrial (C&I) segment, but also sectors like agriculture, fishing, tourism, and mining. The total estimated addressable market for off-grid solar is currently 173 MW, and is expected to grow in line with the growth of the aforementioned sectors.

Recent energy policy reforms are also changing the game for off-grid renewables in Mozambique. In 2021, the Off-Grid Regulation decree was passed to guide the electrification of the country through off-grid solutions, including mini-grids of up to 10 MW, and energy services (like solar home systems and clean cooking solutions) that will help regulate energy access in off-grid areas for public and private entities.

During the second quarter of 2023, the electricity regulator, ARENE, has gone a step further, publishing mini-grid-specific regulations including attribution of concessions, tariff regulations, interconnection, technical and safety standards and quality of service and commercial relations. This step is perceived by many on the ground to be a key milestone for the development of the energy sector in Mozambique, and particularly for achieving universal energy access in rural and hard-to-reach communities. Ricardo Costa Pereira, President of the Board of Directors at AMER, the Mozambican renewable energy association said of the regulation that “The bulk of Mozambique’s population still lives in rural areas where the expansion of the grid is still quite costly. Providing solutions through off-grid energy access is a pillar to ensure universal access. For the first time, Mozambique has a regulation that can provide guidance and a legal framework that can ‘light the path’ to achieving SDG7.”

On the horizon

In theory, the energy landscape has been made more attractive to investors thanks to recent reforms improving energy sector governance. However, with a lack of direct and indirect incentives, private sector investment has been slow to get off the ground, particularly in the off-grid segment. As the new off-grid regulations enter into force this should bring enhanced clarity for investors, helping spur investment in renewables.

A delegation from the Mozambique renewable energy association, AMER, will be present at the Renewable Energy Forum Africa taking place in Nairobi in October. These events are an essential element for informing key players about market potential and spurring investment in the region, and having a presence here shows Mozambique’s commitment to going big on renewables.

Source from pv magazine

Disclaimer: The information set forth above is provided by pv magazine independently of Alibaba.com. Alibaba.com makes no representation and warranties as to the quality and reliability of the seller and products.

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