Difference between revisions of "Mozambique Energy Situation"

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= Overview<br/> =
 
= Overview<br/> =
  
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Given its relatively small land-mass, large (and growing) population and heavy dependence on fuel wood, Malawi is an increasingly energy-stressed country. The National Energy Policy estimates that 93% of total energy demand is met by biomass energy. Households consume 84% of the total primary energy. A staggering 99% of household energy is supplied by biomass. This, with increasing population growth, is exerting significant pressure on the country’s forest resources, leading to forest degradation and deforestation at a rate of 2.6% per year. 87% of the population uses firewood and 8% charcoal to satisfy their thermal energy needs. Less than 7% of the 14 million people are connected to the national grid. The connected demand far exceeds the supply of 320 MW installed generation capacity. Thus, load shedding is frequent. Less than 2.3% of the total national energy demand is met by electricity, 3.5% by liquid fuels and gas, and 1% by coal<ref name="Ministry of Energy"> http://mbaula.org/index_htm_files/2%20-%20BEST%20Presentation.pdf</ref>.
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<span lang="EN-US" style="font-size: 10pt; font-family: Arial, sans-serif;">Mozambique is one of the poorest countries of the world with about 54% of the population living below the national poverty line. Forest resources satisfy more than 85% of total do-mestic energy requirements and more than 95 % of energy supply in rural areas. Mozambique has considerable but little exploited energy resources, including natural gas, coal, hydro, oil, solar, biomass and wind.<br/> The energy sector is key to the country's economy already today, since energy exports make up a large share of total foreign exchange earnings. Moreover, the availability of cheap electricity is one of the main reasons for the significant foreign direct investment in energy-intensive industries in Mozambique. Energy exports (hydropower, coal, gas and possibly oil) and projects to cover the growing domestic electricity demand will play an increasingly impor-tant role in the years to come. The liberalisation of the power sector initiated in 1997 allowed for third parties from the private sector to enter the power generation, transmission and distribution markets.<o:p></o:p></span>
  
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Electricity and gas are only intermittently available and considered to be too expensive for cooking. Electricity tariffs were raised by 84% in 2013. Therefore firewood and charcoal are the major cooking fuels, even in the urban areas.
 
  
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Most of the charcoal is consumed in urban areas – representing 46% of total demand. Unlike in many neighbouring countries, firewood is still available in all four major cities of Malawi (Lilongwe, Blantyre, Zomba and Mzuzu) as well as in the district capitals. Firewood provides over 50% of the urban cooking fuel and nearly 100% in the rural areas.
 
  
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Even in urban areas, firewood is mainly used in open three-stone fires. Therefore there is a potential to introduce convenient affordable portable firewood stoves in urban areas and shift eventually some parts of the cooking activities currently done with charcoal to a less primary-energy intensive fuel source, meaning un-carbonised firewood.
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<span lang="EN-US" style="font-size: 10pt; font-family: Arial, sans-serif;">Access to electricity is among the lowest in the world, especially in rural areas where only 1% of the population is supplied. The national grid only reaches a small part of the country. Many district capitals depend on expensive and often unreliable power generation with diesel generators. Outside these towns, the situation is even worse. The overwhelming majority of rural households, most rural schools, health centres and administrative posts are without access to electricity. Lack of mechanical power is a bottleneck for the rural subsistance agricultural production, as grain producers have to walk long distances to the nearest milling facility. Rural areas lack electricity for lighting, radio and communication in households and for refrigeration in small commerce. Nevertheless, many rural household spend a considerable share of their income for modern energy in the form of kerosene or batteries (€ 4–5 per month). Lack of access to electricity restricts the local population’s opportunities for income-generating activities.<o:p></o:p></span>
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Charcoal in Malawi is mostly unsustainably produced from live trees: over 60% of the charcoal is made from wood originating from protected Forest Reserves and National Parks; even firewood is unsustainably collected.
 
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One of the poorest countries in the world, it is estimated that Malawi’s GDP would be 5.3% higher if such unsustainable use of natural resources ended. Forest and soil degradation are considered some of the main contributors to these losses. Charcoal will be produced increasingly further away from the cities, and households must spend more for their cooking fuel. There is a rising tendency to import charcoal from the neighbouring countries Mozambique, Zambia and Tanzania, leading to severe negative environmental impacts in these countries.
 
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The Maplecroft’s Climate Change and Environment Risk Atlas shows that Malawi is increasingly vulnerable to the impacts of climate change. According to the new Climate Change Vulnerability Index (CCVI) there are 30 countries at ‚extreme risk’ worldwide. Malawi moved fast from position 15 in 2011 up to number 9 on this list<ref>http://maplecroft.com/about/news/ccvi_2012.html and http://maplecroft.com/about/news/ccvi.html </ref>.
 
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This explains why the newly formed Ministry of Environment and Climate Change Management is supporting the initiative to promote energy efficient biomass appliances like cookstoves to reduce the quantity of solid biomass required for preparing a meal.
 
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In addition exposure to toxic smoke from traditional cooking fires is the world’s biggest but least known killer and the exposure is greatest amongst women and girls who do the cooking. Kitchen smoke inhalation among children is a contributing factor to the high incidence of pneumonia that is a major cause of child mortality in Malawi. Improved cookstoves can reduce the smoke emitted during the cooking process, provided that dry wood is used.
 
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Several successful stove projects have already been executed in Malawi, such as those supported by Energising Development (EnDev) through the Programme for Basic Energy and Conservation in Southern Africa (ProBEC) from 2005-2008. However, the lion’s share of work in the cookstoves sector has targeted and is targeting rural areas.
 
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According to new data collated by the Global Alliance for Clean Cookstoves from various sources<ref>http://www.cleancookstoves.org/countries/africa/malawi.html</ref>, the urban population is growing fast, from 15% in 2008 to nearly 20% at present, equalling roughly 2.6 million people in over 585,000 households at an average of 4.4 members per household<ref>National Statistics Office Zomba: Malawi Demographic and Health Survey 2010, p. 9 ff </ref>.
 
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Urban dwellers are the biggest consumers of non-collected biomass, and their numbers are increasing rapidly. However, the capacity to produce a sufficient quantity of good quality improved cookstoves is still limited in the urban areas. EnDev Malawi has started to enhance stove production and link rural stove producers with distribution and sales structures in the urban areas. This will encourage urban and rural stove producers to grow their businesses and once started, continuing to invest own resources in building up the urban demand for their stoves – building on the successes of EnDev and ProBEC. As there is currently no other donor-supported intervention in urban areas, there is no risk of these stoves being double counted in this green market.
 
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= Policy Framework, Laws and Regulations =
 
= Policy Framework, Laws and Regulations =
  
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The Government of Malawi has as of late demonstrated a commitment to scaling up the use of improved cookstoves to address environmental and health issues. President Banda has a keen interest and passion for maternal and child health and committed the Government of Malawi to promote the adoption of energy efficient clean cookstoves in a letter sent to the Global Alliance for Clean Cookstoves on the 18th of June 2012.
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Within PARPA (PRSP), the programme for reduction and alleviation of absolute poverty, the GoM has been granting high priority to efforts to increase access to electricity for the population. Within the PARPA II the GoM has affirmed the critical role of the energy sector in reducing poverty. Adequate and equitable access to energy resources and services such as the provision of energy services to households, rural schools, administrative offices, and hospitals in rural areas is defined as a key driver of growth and poverty alleviation. The energy-related goals set in the PARPA are being operationalised by GoM through a number of strategies, investments and studies that have been prepared or are under way. The PARPA II (§507ff) outlines a programme for the energy sector, which entails: Electrification, Liquid Fuels, Renewable Energy, and Intersectoral Collaboration.
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<u>The Energy Policy approved March 3rd 1998 by the Council of Ministers under Resolution 5/98 established with the following objectives among others relevant for ENDEV MOZAMBIQUE.:</u>
  
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In September 2012, both the Ambassadors of Ireland and the USA met separately with the Minister of the Environment and Climate Change. They both discussed support for the scale up in Malawi of the use of improved energy saving and clean cookstoves. Minister Hara confirmed the Government’s interest and commitment to take this programme forward. She also expressed the importance of coordination with the Ministry of Energy and Mining. Meetings were held separately with the Principal Secretaries of each Ministry. A meeting between the Ministry of the Environment and Climate Change (Department of Forestry), the Ministry of Energy and Mining (Department of Energy), the US Embassy and the Embassy of Ireland followed. It was agreed to establish a <u>National Improved Cookstove Task Force</u> that would include the Government, civil society and the development partners. The Task Force was established in March 2013 and is funded by Irish Aid for the first year. MAEVE as EnDev’s implementation partner in Malawi is actively participating in the task force.
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§ Guarantee reliable supply of energy, at lowest possible cost, in order to meet present demand and future levels based on economic development trajectories,
  
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Older policy documents are currently under revision to reflect the new commitment to embrace biomass energy and make it greener and environmentally friendly.
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§ Increase the energy options available for household consumption,
  
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So far, the <u>Malawi Energy Policy </u>(2003) Part IV (Energy Demand Sectors) Section 4.2.1 (Urban Household Energy Demand) outlines what the Government of Malawi considers to be the most relevant challenges to the energy sector: “...dependency on biomass from unsustainable sources; [...] reliance on end-use devices with low energy efficiency; ... adverse impacts of the urban household energy mix on the environment and on health and safety.” The policy document indicates Government’s interest in devising “promotional strategies aimed at expanding the use of improved ceramic firewood stoves in poor urban households” and “reducing the proportion of households using three stone cookstoves to 50% by 2020.”
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§ Secure better efficiency in energy utilization,
  
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The <u>Malawi Biomass Energy Strategy</u> published in 2009 says “For a long time the national policy has been to transform the country’s economy from high dependency on biomass energy towards greater reliance on other energy sources, particularly electricity, but the Government of Malawi (GoM) has recently recognised that a more pragmatic approach to the biomass energy sector is required at the same time... The BEST objective was to develop a rational and implementable approach to the management of Malawi’s biomass energy sector through a combination of measures designed to improve the sustainability of biomass energy supply, raise end-user efficiencies and promote appropriate alternatives.” However, to date, this Strategy has not been ratified by the Government of Malawi. Yet in a presentation by the Ministry of Energy at a US Embassy organised event in April 2013 there is a political statement that woodfuels will remain the major source of cooking energy in years to come as alternative sources of energy are not readily available<ref>http://mbaula.org/index_htm_files/2%20-%20BEST%20Presentation.pdf</ref>.
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§ Promote the development of environmentally friendly conversion technologies, namely hydro, solar, wind and biomass,
  
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<u>Malawi’s Forestry Policy</u> (1996) Section 2.3.11.2 calls for the development, adaptation and promotion of woodfuel saving devices.
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§ Promote competitive, dynamic and more efficient entrepreneurs.
  
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<u>Malawi’s Growth and Development Strategy</u> (2006-2011) Section 5.1.1.6 (Conservation of the natural resource base) speaks to the long-term goal of reducing environmental degradation, and the expectation to “ensure sustainable use and management of forestry resources” in the medium-term. It also mentions Malawi’s high rate of deforestation and how this accelerates soil erosion and erodes natural resource-based livelihoods – attributing it to a high dependence on wood as a source of household energy (among other factors).
 
  
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<u>National Policy on Acute Respiratory Infections Control in Malawi</u> 2<sup>nd</sup> Edition (2007) in Section 2.6 has as an objective “to advocate for well ventilated cooking areas and dwelling houses” as a means of achieving their vision for the Acute Respiratory Infection Programme to keep all children free from the burden of acute respiratory infections. It also refers to the promotion of cleaner energy and lighting sources at household level in Section 5 (Information, Education, Communication, Advocacy and Social Mobilization).
 
  
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The proposed upscaling of firewood stove promotion by EnDev is in line with all policies and has the full support of the newly formed National Improved Cookstoves Task Force.
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<u>In March 2009 the Policy for Renewables was defined with the following objectives among others with relevance for ENDEV MOZAMBIQUE:</u>
  
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§ Increase the access to modern energy services of high quality and accessible prices,
  
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= Institutional Set-up in the Energy Sector =
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§ Reduce poverty and contribute to the Millennium Development Goals,
  
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Partially as a result of the previous lobby-work by EnDev-ProBEC for improved cookstoves, there are at present a significant (and growing) number of organisations and institutions recognising the importance of solid biomass energy for Malawi. It becomes finally acceptable to acknowledge that biomass is the most common and readily available source of household energy in both rural and urban Malawi and will continue to be in the short and mid-term.
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§ Contribute to the generation of local and national income and employment.
  
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In March 2012 representatives of various organisations signed on to the Global Alliance for Clean Cookstoves (GACC) and the launched MBAULA – Movement for Bio-energy Advocacy, Utilization, Learning and Action – a network for producers, implementers and stakeholders in improved biomass cookstoves in Malawi<ref>http://mbaula.org/membership_founders.htm</ref>.
 
  
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Following the event and with special encouragement by the Ambassadors of Ireland and the USA, the Malawi Government signed up as a national implementation partner with the GACC in June 2012.
 
  
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In 2013 following the presidential initiative for improved cookstoves, the national government-led Improved Cookstove Task Force was formed and assigned the following broad functions:
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The revised Energy Strategy aims to align Mozambique with best international practices for efficient energy utilization, raising awareness amongst its citizens about good environmental practices, diversifying the energy supply matrix, giving particular emphasis to new and renewable sources of energy and to the opportunities contained within the Clean Development Mechanisms, under the Kyoto Protocol. It should ensure energy availability to sustainably meet the requirements of national socio-economic development by undertaking the necessary actions to increase access to diversified energy sources in a sustainable way, contributing to the welfare of the population and the country‘s socio-economic development. The strategy recognizes accelerating electrification efforts, giving priority to rural areas, through the expansion and intensification of the national grid, the utilization of Renewables, the optimization of low cost solutions, and the introduction of measures which will ensure productive and efficient use of electricity (as low consumption/high efficiency light bulbs). The GoM aims to support regional integration and reflects in its national legal framework the best practices in environmental protection. Mozambique has its own Oil Law and Electricity Law. A Regulation defines the licensing of electricity installations, another Regulation establishes the competencies and procedures regarding concessioning of production, transmission, distribution and marketing of electricity, as well as its importation and exportation. Other regulations establish the norms for the national grid, the instructions for CNELEC and its regulatory functions, and the Technical Unit for Implementation of Hydroelectric Projects (UTIP). Based on the new Energy Sector Strategy with its specific subsectors of Electrical Energy and New and Renewable Energies, as well as the Energy Strategic Plan 2009 – 2013, the GoM has prepared a comprehensive 5-year plan for energy development and access. ENDEV MOZAMBIQUE is fully aligned and consistent with this plan, with PARPA and with the new sector strategy.
  
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· Conduct a national cookstove market assessment
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ENDEV MOZAMBIQUE will specifically support:
  
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· Develop a National Cookstove Adoption Strategy and strengthen Government’s capacity to implement it
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1. grid densification by scaling-up electricity connections in peri-urban areas;
  
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· Provide a clear definition of what is meant by an improved cookstove and establish standards to regulate the production of cookstoves in Malawi
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2. promote market development for renewable energy technologies for household lighting and social infrastructure
  
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· Prepare a national awareness communication and education strategy that will target both rural and urban consumers with segmented communication plans, and
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3. technology transfer and capacity building for the main implementing partners mainly, but not exclusively of the private sector.
  
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· Establish support for the production and commercialisation of energy saving stoves whilst promoting research and innovations that will drive improved cookstove adoption and usage.
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= Institutional Set-up in the Energy Sector =
  
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· Scaling-up current cookstove and carbon credit activities
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<u>The public sector is represented by:</u>
  
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The national Improved Cookstove Task Force reports to the national Renewable Energy Technical Working Group to ensure that its activities are in line with national strategy and policy in the wider field of renewable and sustainable energy. The Task Force is co-chaired by Government (Ministry of Energy and the Ministry of Environment) with administrative support from Concern Universal. Other members of the Task Force include donors, NGOs, Academia, Government and private sector representatives. The EnDev implementation partner MAEVE is one of the two NGO-representatives in the National Cookstove Task Force since August 2013.
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§ The Ministry of Energy (MoE) is responsible for national energy planning and policy formulation and for overseeing the operation and development of the energy sector. The MoE is composed of three main thematic areas (Power Sector, Renewables and Liquid Fuels) and a central services management group. The MoE is represented in the provinces through the Provincial Directorates of Mineral Resources and Energy (DIPREME).
  
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§ Electricidade de Moçambique (EdM), is a vertically-integrated, government-owned electric utility responsible for generation, transmission and distribution of electricity in the national grid. EdM buys most of its power supply (apr. 400 MW) from Hidroelectrica de Cahora Bassa (HCB), owner and operator of the Cahora Bassa hydro power plant on the Zambezi (2,075 MW). The GoM owns 82 percent of HCB which operates as an Independent Power Producer (IPP) The bulk of the electricity generated at HCB is exported to South Africa, with a small amount to Zimbabwe. EdM sells any excess electricity on the Southern Africa Short Term Energy Market. The Mozambique transmission grid is currently interconnected with South Africa, Zimbabwe and Swaziland.
  
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= Activities of Other Donors =
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§ The Fundo Nacional de Energia (FUNAE) was established in 1997 as a public institution to promote rural electrification and rural access to modern energy services, in a sustainable manner, and as a contributor to economic and social development in the country. Since its establishment FUNAE has implemented numerous projects using renewable energy technologies to electrify schools, clinics and communities.
  
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With additional support by DGIS, the regional ProBEC Programme laid the foundation of the current cookstove activities on a national level in Malawi, contributing to the creation of the global programme Energising Development. EnDev-ProBEC developed and mainstreamed energy efficient technologies in Malawi from 2005 up to May 2008. In the course of the years, many development organisations implementing various programmes on health, nutrition, environment, natural resources, food security etc. got encouraged and trained to integrate cooking energy into their programmes as cross-cutting issues. This created quite some momentum for biomass-based cooking energy solutions in the country. The most liked and viable technology was the Chitetezo Mbaula, a simple ceramic firewood stove for households, mostly produced and promoted in the rural areas.
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§ The Conselho Nacional de Electricidade (CNELEC) was re-established as an independent advisory regulatory body for the electricity sector in early 2008 with support from the World Bank Energy Reform and Access Project (ERAP). CNELEC was instructed to give its highest priority to an evaluation of EDM‘s performance under its Performance Contract with the GoM. This Performance Contract covers the years 2007 to 2009 and sets out the goals and indicators to be met annually by EDM and GoM. CNELEC was also instructed to conduct a review of the current methodology used by EDM in setting tariffs. In performing the review of EDM‘s performance, the directive instructed CNELEC to conduct its review in an open and transparent manner with public hearings in several locations throughout the country.
  
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Prior to the new engagement of the EnDev donor-consortium in April 2013, the major donors for biomass energy interventions in Malawi were (in alphabetical order) European Union, Ireland, Norway, UK, UNDP and USA. Major programmes supported by these donors in Malawi were without exception targeting the rural areas. To date, EnDev Malawi is the only programme specifically targeting the urban markets for improved cookstoves.
 
  
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Major implementation partners are Christian Aid, Concern Universal, Cooperazione Italiana (COOPI), Goal Malawi, Mulanje Mountain Conservation Trust, Self-Help Africa and Total Landcare. Clíoma is an Irish consultancy company providing technical support on energy efficient technologies.
 
  
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The DISCOVER Consortium hosted a stove camp for cookstove stakeholders in Malawi in March 2012 in collaboration with the Partnership for Clean Indoor Air. The camp focused on enhancing awareness and understanding on biomass energy use and its impacts. The workshop guided participants from partner organisations to understand the science behind biomass energy use and to assess a portfolio of cookstoves being used in Malawi particularly through sessions on stove efficiency testing. The Partnership for Clean Indoor Air is to dissolve itself and its members will now integrate into the Global Alliance for Clean Cookstoves. A coordination network called Mbaula Network was established to coordinate the activities of all the organisations affiliated to the Global Alliance for Clean Cookstoves in Malawi. Renew'N'Able Malawi is facilitating the coordination of the network and a website has been set up.
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The private sector is represented by various licensed private enterprises which participate in the grid extension and household connection works of EdM and private enterprises for the provision and installation of PV products, often situated exclusively in the capital Maputo. A microfinance sector with banks and NGOs is active throughout the country but often exclusively restricted to the province and/or district capitals. The NGO sector is characterized by relatively weak institutional profiles and technical specialisation, as well as weak implementation structures and technical competences.
  
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On April 11, 2012 the United States Embassy in Lilongwe hosted an improved cookstove symposium. The national symposium on scaling up cookstoves in Malawi highlighted the importance of clean cooking practices to Malawi’s economic growth, human health protection and resource conservation. The symposium brought together public and private stakeholders including the Government of Malawi (GOM), United States agencies in Malawi, Irish Aid and other development partners, in addition to a range of industry and non-profit groups involved in clean cook stove promotion.
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Encouraged by this experience, Ireland and USA agreed to include the promotion and scale up of the use of cookstoves in the US/Irish partnership framework for 2012. Ireland and the USA supported a series of events, to promote the use of clean and efficient cookstoves in Malawi.
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= Activities of Other Donors =
  
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The DISCOVER programme with additional financial support by the USEPA and Winrock International organised another Stove Camp in March 2013, aiming at consensus on the dimensions and features of the Chitetezo Mbaula, to work towards standardization and quality assurance of the stove. The National Task Force supports the Malawi Bureau of Standards in the development of national standards for the Chitetezo Mbaula based on the agreement reached during Stove Camp 2013. The PS of Energy, Mr Masanjala graced the open day and encouraged the emerging stove community to increase efforts.
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The World Bank is one of the main donors in the energy sector in Mozambique. Since July 2007, it has served as co-chair with the GoM on the ―Energy Sector Working Group‖ that was established within the framework of the Paris Declaration. The Bank is in preparation of the second phase of the '''Energy Reform and Access Project (ERAP)''', which will now be called '''Energy Development and Access Programme (EDAP)''' The proposed project will help establish the necessary operational framework for increasing electricity access to un-electrified areas nationally in a sustainable and programmatic manner, aiming at mainstreaming a sector-wide approach (SWAp) by establishing a comprehensive donor partnership framework for coordinated and sustained financing of investment and capacity strengthening aligned with national priorities and procedures (WB, ADB, ADF, OFID, BADEA, IsDB, Kuweit Fund) With Norway, the World Bank is also co-financing the Mozambique- Malawi Transmission Interconnection Project (cancelled medio 2010) and the Mozambique Regional Transmission Backbone Project. Sweden is engaged together with co-financing of Norway and Denmark in rural electrification (grid extension and household connections) in Sofala, Manica, Tete and Niassa Provinces. Norway is financing rural electrification in Cabo Delgado and grid extension in Gurue - Cuamba – Lichinga and Namacurra – Pebane. '''Technical assistance (TA)''' and capacity development for EdM in mega project development for power generation, as well as for the MoE are delivered by Norway and Sweden. Sweden also is embarking on the rehabilitation of the hydro power stations in Mavuzi and Chicamba. The '''European Commission (EC)''' is financing rural electrification in Cabo Delgado, Tete and Sofala with EdM, PV electrification in rural areas with FUNAE and capacity building in energy planning and management for the MoE. DFID is giving TA on Biofuels to the National Directorate of Renewable Energy of the MoE.
  
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The Global Alliance for Clean Cookstoves provides Malawi with additional international experience that will contribute to developing the national cookstove programme. Following a suggestion by GACC, the US supported a market assessment study carried out by GVEP and independent consultants. It was presented in March 2013<ref>http://mbaula.org/events_mwcctf_marketassesment2013.htm</ref>and outlines the foundational role of the EnDev-ProBEC programme for the sector development in Malawi<ref>http://mbaula.org/index_htm_files/4%20%20Malawi%20Market%20Assessment%20Sector%20Mapping%20Presentation.pdf page 24</ref>.
 
  
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Belgium has signed a contract with FUNAE in September 2010, with the following summary of activities planned for.
  
 
= Further Information =
 
= Further Information =
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[[Category:Country_Energy_Situation]]
 
[[Category:Mozambique]]
 
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[[Category:Country_Energy_Situation]]
 

Revision as of 11:10, 14 January 2014

Republic of Mozambique
Flag of Mozambique
Location of Mozambique
Capital Maputo (25° 57′ 0″ S, 32° 35′ 0″ E)
Official Languages(s) Portuguese
Government Presidential Republic
President Armando Guebuza
Total Area (km²) 801,590
Population 23,400,000 (2010 estimate)
Rural Population 14,400,000 (2010 estimate)
GDP (Nominal) US $9.580 billion (2010 estimate)
GDP Per Capita US $410 (2010 estimate)
Currency Mozambican metical (Mtn) (MZN)
Time Zone CAT (UTC+2)
Calling Code +258
Electricity Generation TWh/year (year)
Access to Electricity %
Wind energy (installed capacity) MW (year)
Solar Energy (installed capacity) MW (year)



Overview

Mozambique is one of the poorest countries of the world with about 54% of the population living below the national poverty line. Forest resources satisfy more than 85% of total do-mestic energy requirements and more than 95 % of energy supply in rural areas. Mozambique has considerable but little exploited energy resources, including natural gas, coal, hydro, oil, solar, biomass and wind.
The energy sector is key to the country's economy already today, since energy exports make up a large share of total foreign exchange earnings. Moreover, the availability of cheap electricity is one of the main reasons for the significant foreign direct investment in energy-intensive industries in Mozambique. Energy exports (hydropower, coal, gas and possibly oil) and projects to cover the growing domestic electricity demand will play an increasingly impor-tant role in the years to come. The liberalisation of the power sector initiated in 1997 allowed for third parties from the private sector to enter the power generation, transmission and distribution markets.<o:p></o:p>


Access to electricity is among the lowest in the world, especially in rural areas where only 1% of the population is supplied. The national grid only reaches a small part of the country. Many district capitals depend on expensive and often unreliable power generation with diesel generators. Outside these towns, the situation is even worse. The overwhelming majority of rural households, most rural schools, health centres and administrative posts are without access to electricity. Lack of mechanical power is a bottleneck for the rural subsistance agricultural production, as grain producers have to walk long distances to the nearest milling facility. Rural areas lack electricity for lighting, radio and communication in households and for refrigeration in small commerce. Nevertheless, many rural household spend a considerable share of their income for modern energy in the form of kerosene or batteries (€ 4–5 per month). Lack of access to electricity restricts the local population’s opportunities for income-generating activities.<o:p></o:p>


Potentials

Mozambique has considerable energy resources with an estimated hydropower potential of 12,000 MW and also gas reserves (estimated at reaching 700 billion cubic metres) and vast coal reserves (estimated to reach 140 million TJ) with the potential of generating approx. 500 MW and 5,000 MW respectively.


Renewable Energy Potential

Resource Availability
Wind Along the cost Niassa (Average wind speed 6 m/s)
Solar 4.5-7 kWh/m2/day
Hydro 12 GW (1 GW in small installations up to 10 MW)
Biomass 100's of MW (Big bagasse potential)


Demand and Supply

Peak electricity demand was 530 MW in 2010 (without Mozal) with an energy consumption of approximately 3,032 GWh. The increase in power consumption has been significant during recent years with average annual increases in the order of 6 to 8 % over the last 10 years. These figures reflect supply to domestic, commercial and industrial consumers in the national power network supplied by Electricidade de Moçambique (EdM) the national power company. Approx. 136 MW (61 MW from hydro and 75 MW from diesel and gas) are supplied by EdM's own generation, mainly by ageing plants requiring refurbishment. The remaining demand is supplied through a purchase agreement with Cahora Bassa, a hydropower plant at the Zambezi River with an installed capacity of 2,075 MW. The number of consumers has grown with more than 10% annually since the year 2000 and was about 850,000 in 2010 (2,240 Medium & High Voltage clients). At present still only 16% of the population has access to electricity. Power demand forecasts indicate that with an average projected growth rate of 6% p.a. Mozambique will reach a maximum demand of 1,350 MW by 2030 and a projected consumption of 8,300 GWh. From 2009 until 2013, it is foreseen that demand reach 560 MW by 2013. For meeting the country‘s electricity needs in a timely manner, it is imperative given that the Cahora Bassa‘s reserve for domestic market requirements of 400 MW is almost exhausted. Therefore it is important that the HEP sites Mavuzi, Chicamba, Corumana are rehabilitated and that the technical and economical feasb. HEP sites Tsate, Mueneze, Alto Malema, Massingir and Mavuzi II and III are errected and the retrofit of the MTC Maputo Gas Turbine. These investments would sum to approx. 415 MW ICap and approx. 300 MW additional firm power. Several large scale IPPs, mainly for export purposes, are planned (totalling ca. 3 to 5 GW).

Biomass coming from an estimated 30.6 million hectares of forest lands for wood fuel and charcoal represents about 80% of the total energy consumed by the households. This value is even bigger in remote rural areas. Every year it is estimated that 16,000,000 m3 of forestry resources are burnt to meet rural energy requirements.

The present consumption of oil products is in the order of 600 million litres per year, transport being the lead user followed by agriculture. The turbulence in international oil markets since 2004 resulting in abrupt fluctuations of oil prices have become a source of social unrest. The reduction of the Mozambican energy bill, especially for imports of liquid fossil fuels, which in 2006 amounted to 14% of national imports, deserves special attention. Today both liquid pe-troleum gas (LPG) and kerosene have only a small impact in terms of the national energy ba-lance. LPG is mainly used in the urban centres of Maputo, Matola, Beira and Nampula. How-ever due to bottlenecks in supplies the national consumption does not exceed 14,000 tons.

Mozambique´s considerable energy resources enable the country to meet its internal demand and still export energy to Southern and East African countries. The availability of energy resources including hydro, natural gas and coal, plus the geographical positioning of the country – acting both as route to the countries inland well served by harbours, railway and pipeline systems, and as an interface between the Southern African Development Community (SADC) and the Eastern African Community (EAC) gives Mozambique a privileged, strategic position and role in the regional energy sector.


However despite the countries significant electric power potential there should be no rapid shift expected from biomass to electricity use because Mozambique is a vast country with the majority of the population living in rural communities dispersed throughout the provinces. Energy solutions must take into consideration this reality and adapt to it by combining an intensification of electrification in those areas served by the national electricity grid and the adoption of modern technological solutions and energy services in particular for remote areas, using sustainable biomass, solar and hydropower resources.


Noteworthy Trends

Despite its large renewable energy resources, the country energy sector focus is on large hydro projects in the Zambezi Basin (i.e. Mphanda Nkuwa) to produce power for export to South Africa and for industry. Mozambique relies heavily on the export of commercial electricity to South Africa from the Cahora Bassa dam on the Zambezi River to generate foreign exchange income.

The two immediate projects are the 850 MW (nominal) expansion of the Cahora Bassa dam and the controversial Mphanda Nkuwa dam (2500 MW). See table below.


Project Name Type of Project

Size

Comments

CB North Bank Hydropower expansion

850 to 1300 additional MW

Detailed feasibility study is underway

Mphanda Nkuwa Hydropower

2500 MW

Env. + Soc. Impact Study underway

Massingir Hydropower

40 MW

EDM managed

Lurio Hydropower

120 MW


Majawa Hydropower

25 MW


Malema Hydropower

60 MW


Moatize Coal fired power plant

1500 MW

IES is the developer

Temane Combined Cycle natural gas fired power plant

300-400 MW

On the SASOL gaspipeline. 2010



As a result of March 2009 Government policy, the biofuels sector is receiving hundreds of millions of dollars in investment (sugar – ethanol, jatropha --- biodiesel).However, production has yet to commence and there is considerable controversy about transparency and food vs. energy.


Market Situation

The market situation for photovoltaic (PV) and hydro power technologies and services is still in a very incipient stage. In the case of micro and pico hydro there are no readily available products available in the country which makes prices prohibitive for communities and individual households. However there is a good potential for local manufacture of water wheels and pico turbines, although the market is still very limited and therefore local services tend to be rather expensive.

In its first phase, ENDEV MOZAMBIQUE has started pioneer activities in the local manufacture of water wheels for upgrading traditional maize mills and the manufacture of pico turbines with most promising results. Therefore it is envisaged to upscale micro/pico hydro power activities sustainably on a local level with an appropriate and cost effective approach for technical capacity building, technology transfer and market development. The market for PV is divided into steadily growing local market spots and mainly capital based PV providers working with directly imported equipment for government projects funded by donors. The local market is efficient and reliable but informal, with low quality products of Chinese origin coming mainly from RSA. Market actors are lacking technical knowledge. In parallel to the dissemination of products from the local market ENDEV MOZAMBIQUE has started designing an energy efficient compact small solar home system (SSHS) with a local enterprise. In the case of PV for household lighting, technical capacity building, technology transfer and market development is envisaged within a Public Private Partnership (PPP) measure with German enterprises and higher quality products.

In addition to the overarching need for developing the countries extensive energy resources (hydro, coal, gas and biomass) for both domestic and regional consumption the main challenges in the power sector in Mozambique are:

  • Ensuring that affordable electricity supply is available to meet the rapidly growing domestic demand. In the near term, this will involve the continued extension of the grid with a focus on loss reduction and intensification of the grid,
  • Reaching the vast areas of the country beyond the national grid managed by EdM. The GoM is committed to supporting decentralized electrification of social infrastructure (rural schools, clinics and administrative offices) and to increase access to modern energy services to villages and rural enterprises through PV systems, micro/pico-hydro schemes, modern biomass energy, and other Renewable Energy Technologies (RETs),
  • Ensuring that power shortages do not become a constraint on economic growth. Several GoM proposed generation and transmission ―mega-projects‖ will address sufficiency and security of supply for the medium to long-term,
  • Institutional strengthening and capacity development of the main sector public institutions (MoE, EdM, FUNAE and CNELEC) but also of the private sector composed of NGOs, MFIs, and local enterprises working with RETs, in order to improve their respective performance, governance and effectiveness.


Cumulative capacity, by technology:

  1. Wind: NONE
  2. Solar PV: NO GRID CONNECT. SMALL OFF GRID MARKET.
  3. CSP: NONE
  4. Solar thermal:Very small household and tourism market
  5. Geothermal: NONE.
  6. Bioenergy (heat and/or power):5-10 MW in 5 sugar refineries (Self consumed)
  7. Hydropower: 2,075 MW Cahora Bassa dam dominates the energy sector.This is owned by Hidroelectrica de Cahora Bassa (HCB), whose assets are 85% owned by the Mozambique government.
    160 MW, mostly of hydropower, is managed by Electricidade de Mozambique (EDM)
  8. Biofuels production data – for both ethanol and biodiesel.
    A National Policy and Strategy for Biofuels was approved in February 2009 which focuses on ethanol from sugarcane and sorghum and coconut and jatropha for biodeisel. < www.biofuelsdigest.com/blog2/2009/03/27/mozambique-establishes-national-biofuels-policy> .
    This policy has led to hundreds of millions of dollars in investment plans in ethanol and biodiesel in Mozambique. An October 2007 ethanol plant in Mozambique received US$510 million in support from the UK. However, the actual on-the-ground activity is unclear and production has yet to commence.Biofuels are not readily available in the country and export details are also not available    [1].
  9. Marine energy (specify technology) NONE


Policy Framework, Laws and Regulations

Within PARPA (PRSP), the programme for reduction and alleviation of absolute poverty, the GoM has been granting high priority to efforts to increase access to electricity for the population. Within the PARPA II the GoM has affirmed the critical role of the energy sector in reducing poverty. Adequate and equitable access to energy resources and services such as the provision of energy services to households, rural schools, administrative offices, and hospitals in rural areas is defined as a key driver of growth and poverty alleviation. The energy-related goals set in the PARPA are being operationalised by GoM through a number of strategies, investments and studies that have been prepared or are under way. The PARPA II (§507ff) outlines a programme for the energy sector, which entails: Electrification, Liquid Fuels, Renewable Energy, and Intersectoral Collaboration.

The Energy Policy approved March 3rd 1998 by the Council of Ministers under Resolution 5/98 established with the following objectives among others relevant for ENDEV MOZAMBIQUE.:

§ Guarantee reliable supply of energy, at lowest possible cost, in order to meet present demand and future levels based on economic development trajectories,

§ Increase the energy options available for household consumption,

§ Secure better efficiency in energy utilization,

§ Promote the development of environmentally friendly conversion technologies, namely hydro, solar, wind and biomass,

§ Promote competitive, dynamic and more efficient entrepreneurs.


In March 2009 the Policy for Renewables was defined with the following objectives among others with relevance for ENDEV MOZAMBIQUE:

§ Increase the access to modern energy services of high quality and accessible prices,

§ Reduce poverty and contribute to the Millennium Development Goals,

§ Contribute to the generation of local and national income and employment.


The revised Energy Strategy aims to align Mozambique with best international practices for efficient energy utilization, raising awareness amongst its citizens about good environmental practices, diversifying the energy supply matrix, giving particular emphasis to new and renewable sources of energy and to the opportunities contained within the Clean Development Mechanisms, under the Kyoto Protocol. It should ensure energy availability to sustainably meet the requirements of national socio-economic development by undertaking the necessary actions to increase access to diversified energy sources in a sustainable way, contributing to the welfare of the population and the country‘s socio-economic development. The strategy recognizes accelerating electrification efforts, giving priority to rural areas, through the expansion and intensification of the national grid, the utilization of Renewables, the optimization of low cost solutions, and the introduction of measures which will ensure productive and efficient use of electricity (as low consumption/high efficiency light bulbs). The GoM aims to support regional integration and reflects in its national legal framework the best practices in environmental protection. Mozambique has its own Oil Law and Electricity Law. A Regulation defines the licensing of electricity installations, another Regulation establishes the competencies and procedures regarding concessioning of production, transmission, distribution and marketing of electricity, as well as its importation and exportation. Other regulations establish the norms for the national grid, the instructions for CNELEC and its regulatory functions, and the Technical Unit for Implementation of Hydroelectric Projects (UTIP). Based on the new Energy Sector Strategy with its specific subsectors of Electrical Energy and New and Renewable Energies, as well as the Energy Strategic Plan 2009 – 2013, the GoM has prepared a comprehensive 5-year plan for energy development and access. ENDEV MOZAMBIQUE is fully aligned and consistent with this plan, with PARPA and with the new sector strategy.

ENDEV MOZAMBIQUE will specifically support:

1. grid densification by scaling-up electricity connections in peri-urban areas;

2. promote market development for renewable energy technologies for household lighting and social infrastructure

3. technology transfer and capacity building for the main implementing partners mainly, but not exclusively of the private sector.

Institutional Set-up in the Energy Sector

The public sector is represented by:

§ The Ministry of Energy (MoE) is responsible for national energy planning and policy formulation and for overseeing the operation and development of the energy sector. The MoE is composed of three main thematic areas (Power Sector, Renewables and Liquid Fuels) and a central services management group. The MoE is represented in the provinces through the Provincial Directorates of Mineral Resources and Energy (DIPREME).

§ Electricidade de Moçambique (EdM), is a vertically-integrated, government-owned electric utility responsible for generation, transmission and distribution of electricity in the national grid. EdM buys most of its power supply (apr. 400 MW) from Hidroelectrica de Cahora Bassa (HCB), owner and operator of the Cahora Bassa hydro power plant on the Zambezi (2,075 MW). The GoM owns 82 percent of HCB which operates as an Independent Power Producer (IPP) The bulk of the electricity generated at HCB is exported to South Africa, with a small amount to Zimbabwe. EdM sells any excess electricity on the Southern Africa Short Term Energy Market. The Mozambique transmission grid is currently interconnected with South Africa, Zimbabwe and Swaziland.

§ The Fundo Nacional de Energia (FUNAE) was established in 1997 as a public institution to promote rural electrification and rural access to modern energy services, in a sustainable manner, and as a contributor to economic and social development in the country. Since its establishment FUNAE has implemented numerous projects using renewable energy technologies to electrify schools, clinics and communities.

§ The Conselho Nacional de Electricidade (CNELEC) was re-established as an independent advisory regulatory body for the electricity sector in early 2008 with support from the World Bank Energy Reform and Access Project (ERAP). CNELEC was instructed to give its highest priority to an evaluation of EDM‘s performance under its Performance Contract with the GoM. This Performance Contract covers the years 2007 to 2009 and sets out the goals and indicators to be met annually by EDM and GoM. CNELEC was also instructed to conduct a review of the current methodology used by EDM in setting tariffs. In performing the review of EDM‘s performance, the directive instructed CNELEC to conduct its review in an open and transparent manner with public hearings in several locations throughout the country.


The private sector is represented by various licensed private enterprises which participate in the grid extension and household connection works of EdM and private enterprises for the provision and installation of PV products, often situated exclusively in the capital Maputo. A microfinance sector with banks and NGOs is active throughout the country but often exclusively restricted to the province and/or district capitals. The NGO sector is characterized by relatively weak institutional profiles and technical specialisation, as well as weak implementation structures and technical competences.


Activities of Other Donors

The World Bank is one of the main donors in the energy sector in Mozambique. Since July 2007, it has served as co-chair with the GoM on the ―Energy Sector Working Group‖ that was established within the framework of the Paris Declaration. The Bank is in preparation of the second phase of the Energy Reform and Access Project (ERAP), which will now be called Energy Development and Access Programme (EDAP) The proposed project will help establish the necessary operational framework for increasing electricity access to un-electrified areas nationally in a sustainable and programmatic manner, aiming at mainstreaming a sector-wide approach (SWAp) by establishing a comprehensive donor partnership framework for coordinated and sustained financing of investment and capacity strengthening aligned with national priorities and procedures (WB, ADB, ADF, OFID, BADEA, IsDB, Kuweit Fund) With Norway, the World Bank is also co-financing the Mozambique- Malawi Transmission Interconnection Project (cancelled medio 2010) and the Mozambique Regional Transmission Backbone Project. Sweden is engaged together with co-financing of Norway and Denmark in rural electrification (grid extension and household connections) in Sofala, Manica, Tete and Niassa Provinces. Norway is financing rural electrification in Cabo Delgado and grid extension in Gurue - Cuamba – Lichinga and Namacurra – Pebane. Technical assistance (TA) and capacity development for EdM in mega project development for power generation, as well as for the MoE are delivered by Norway and Sweden. Sweden also is embarking on the rehabilitation of the hydro power stations in Mavuzi and Chicamba. The European Commission (EC) is financing rural electrification in Cabo Delgado, Tete and Sofala with EdM, PV electrification in rural areas with FUNAE and capacity building in energy planning and management for the MoE. DFID is giving TA on Biofuels to the National Directorate of Renewable Energy of the MoE.


Belgium has signed a contract with FUNAE in September 2010, with the following summary of activities planned for.

Further Information


References

  1. ↑ The biofuels sector, and especially the biodiesel sector, has attracted considerable investment. Hundreds of millions of dollars of investment has been made. Much of this has been in the sugar sector which is growing rapidly. At least 7 biodiesel/jatropha plantations have been set up with poor -- and controversial – results. (see Justica Ambiental!/Uniao Nacional de Camponeses, Jatropha: A Socio-economic pitfall for Mozambique. August 2009. http://ictsd.org/i/news/biores/45169/


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