Difference between revisions of "Nano/Mini-Grid Market Landscape in Mozambique"
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== Introduction == | == Introduction == | ||
| − | Along with grid-densification and access to solar home systems (SHS), one of the most important measures to achieve country-wide electrification in [[Mozambique Off-grid Knowledge Hub|Mozambique]] by 2030 is through the development of mini-grids. The mini-grid market for private sector is still small in [[Mozambique Off-grid Knowledge Hub|Mozambique]]. Regulatory restrictions limit the participation of the private sector to develop mini-grid projects. Unlike the market for Solar Home Systems (SHS) | + | Along with grid-densification and access to [[Mozambique Solar Hub|solar home systems (SHS)]], one of the most important measures to achieve country-wide electrification in [[Mozambique Off-grid Knowledge Hub|Mozambique]] by 2030 is through the development of [[Nano/Mini-Grids - Definition|mini-grids]]. The mini-grid market for private sector is still small in [[Mozambique Off-grid Knowledge Hub|Mozambique]]. [[Policy and Regulatory Framework for Mini/Nano Grids in Mozambique|Regulatory restrictions]] limit the participation of the private sector to develop mini-grid projects. Unlike the market for [[Mozambique Solar Hub|Solar Home Systems (SHS)]] and [[Mozambique Cooking Energy Hub|Improved Cookstoves (ICS)]], which are targeted at individual users, namely a household or institution, mini-grids provide access to electricity to a larger number of end-users simultaneously. [[Nano/Mini-Grids - Definition|Read more...]] |
| − | + | ||
| − | == Market Landscape == | + | '''This article provides an overview of the mini-grids market in Mozambique with a focus on the stakeholders involved and their roles in the market.''' |
| + | |||
| + | ==Market Landscape== | ||
In Mozambique, the development of a mini-grid project requires cooperation between the following actors: | In Mozambique, the development of a mini-grid project requires cooperation between the following actors: | ||
| − | + | ||
| − | # '''FUNAE''': | + | #'''FUNAE''': promotion of energy services in the areas of dissemination, mobilization of infrastructure financing and guaranteeing operation and maintenance. |
| − | # ''' | + | #'''Electricidade de Moçambique (EDM)''': extension of the national electricity grid and ensuring future interconnections of mini-grids to the national grid. |
| − | # '''ARENE''': responsible for approving mini-grid tariffs. | + | #'''ARENE''': responsible for approving mini-grid tariffs. |
| − | # '''Private sector (companies and organisations)''': financing, designing, implementing, operating and maintaining mini-grids. They secure funds either through direct subsidizing of the consumer, through support of the private sector, or through funding | + | #'''Private sector (companies and organisations)''': financing, designing, implementing, operating and maintaining mini-grids. They secure funds either through direct subsidizing of the consumer, through support of the private sector, or through funding available via the initiative of the Government. |
| − | # '''The financial sector''', which includes insurers, is responsible for offering financial assistance to the private sector | + | #'''The financial sector''', which includes insurers, is responsible for offering financial assistance to the private sector<ref>Carteira-de-Projectos-de-Energias-Renovaveis-2019-Final.Pdf, accessed 28 June 2021, https://www.aler-renovaveis.org/contents/files/carteira-de-projectos-de-energias-renovaveis-2019-final.pdf.</ref>. |
| − | + | ||
| − | FUNAE is the implementation agency for off-grid and rural electrification programmes. With financial support from international development organisations, FUANE acts as a public institution in charge of the development and operation of mini-grids and Solar Home Systems (SHS). FUNAE assists the development of mini-grid projects which are later operated and maintained by either EDM or private operators/community members, depending on the operational model of the mini-grid<ref>Mozambique – GET.Invest’, accessed 31 May 2021, | + | FUNAE is the implementation agency for off-grid and rural electrification programmes. With financial support from international development organisations, FUANE acts as a public institution in charge of the development and operation of mini-grids and Solar Home Systems (SHS). FUNAE assists the development of mini-grid projects which are later operated and maintained by either EDM or private operators/community members, depending on the operational model of the mini-grid<ref>Mozambique – GET.Invest’, accessed 31 May 2021,https://www.get-invest.eu/market-information/mozambique/.</ref>. By 2021, FUNAE has developed 76 operating mini-grids with a total of more than 6 MW installed capacity<ref>Aler_mar2021_resumo-Renovaveis-Em-Mocambique-2021.Pdf’, accessed 19 July 2021, https://www.lerenovaveis.org/contents/lerpublication/aler_mar2021_resumo-renovaveis-em-mocambique-2021.pdf.</ref>. |
| − | + | ||
While the market for mini-grids remains small, there is large potential for mini-grid development. In 2019 FUNAE published the second edition of the Renewable Energy Projects Portfolio (First edition was published in 2017). This portfolio presents the potential hydropower and solar projects in different stages of feasibility studies and fact-finding visits. | While the market for mini-grids remains small, there is large potential for mini-grid development. In 2019 FUNAE published the second edition of the Renewable Energy Projects Portfolio (First edition was published in 2017). This portfolio presents the potential hydropower and solar projects in different stages of feasibility studies and fact-finding visits. | ||
| − | + | ||
Organisations implementing mini-grid projects in Mozambique do so by supporting startups and well established mini-grid companies in different ways: | Organisations implementing mini-grid projects in Mozambique do so by supporting startups and well established mini-grid companies in different ways: | ||
| − | + | ||
| − | * result based financing (RBF), | + | *result based financing (RBF), |
| − | * providing financing, training, and consulting assistance | + | *providing financing, training, and consulting assistance |
| − | * offering grants in the form of technical assistance and tariffs subsidies. | + | *offering grants in the form of technical assistance and tariffs subsidies. |
| − | + | ||
| − | == Programmes Supporting Mini-grids == | + | ==Programmes Supporting Mini-grids== |
Past programmes, such as the Clean Energy Mini-Grids (CEMG) from the UNDP supporting FUNAE and EDM, aided investment in mini-grid projects leading to an increase in FUNAE’s portfolios. Several initiatives and government strategies are keeping up the pace of the development of mini-grid projects. Below are some programmes/projects supporting mini-grid development as of 2021: | Past programmes, such as the Clean Energy Mini-Grids (CEMG) from the UNDP supporting FUNAE and EDM, aided investment in mini-grid projects leading to an increase in FUNAE’s portfolios. Several initiatives and government strategies are keeping up the pace of the development of mini-grid projects. Below are some programmes/projects supporting mini-grid development as of 2021: | ||
| + | |||
| + | *'''Mozambique Energy for All, ProEnergia:''' One of Mozambique’s largest electrification projects, ProEnergia finances the construction of up to six mini-grids, each connecting 431 households and 117 commercial/institutional users in communities where grid expansion and densification is not economically feasible. This contributes to include mini-grids as a driver to reach universal electrification by 2030<ref>Mozambique-Energy-for-All-ProEnergia-Project.Pdf’, accessed 22 July 2021, https://documents1.worldbank.org/curated/en/594061554084119829/pdf/Mozambique-Energy-for-All-ProEnergia-Project.pdf.</ref>. | ||
| + | |||
| + | *'''ESMAP''': A complementary action to ProEnergia. ESMAP is Mozambique’s Geospatial Options Analysis towards Universal Electrification. This project helps with the analysis of 13 strategic locations for the construction of up to six mini-grids. Priority provinces include: Niassa, Nampula, Zambezia, Cabo Delgado and Sofala<ref>Mozambique-Energy-for-All-ProEnergia-Project.Pdf’, accessed 22 July 2021, https://documents1.worldbank.org/curated/en/594061554084119829/pdf/Mozambique-Energy-for-All-ProEnergia-Project.pdf.</ref>. | ||
| + | *'''BGFA (REEEP, NEFCO) :''' With EUR 6.7 million for mini-grids in Mozambique, this program provides off-grid energy service suppliers with funding for standalone or mini-grid projects '''.''' | ||
| + | *'''BRILHO (DFID)''': encourage innovation and investment in green mini-grids by offering financial support to existing companies focused on developing mini-grid projects in underserved areas. The call for applications to BRILHO’s Market Development Fund closed in November 2021 and the project is moving to the next phase<ref>‘Guidelines for Applicants - MDF, Call for Expressions of Interest’, accessed 30 January 2022, https://brilhomoz.com/assets/documents/HD_BRILHO_Booklet_EN_A4_Digital.pdf.</ref>. This programme aims to support 8 green mini-grids<ref>5 Years on from the Launch of Green Mini-Grids Africa – What’s Been Achieved, and What Have We Learned? | Mini-Grids Partnership’, accessed 1 February 2022, https://minigrids.org/5-years-on-from-the-launch-of-green-mini-grids-africa-whats-been-achieved-and-what-have-we-learned/.</ref>. | ||
| + | *'''Energy Access Fund – A2E (edp):''' Private sector programme supporting CEMG. A2E provides funding for energy access projects in Mozambique including SHS and mini-grids<ref>Access to Energy Fund Program’, edp.com, accessed 11 August 2021, https://www.edp.com/en/edp/social-responsibility/access-energy-fund-program.</ref>. One of the most important actions from this project was the planning for mini-grid projects to electrify 500 households in the Titimane village<ref>‘Mozambique: Titimane’, edp.com, accessed 18 January 2022, https://www.edp.com/en/mozambique-titimane.</ref>. This initiative was part of a grant from the Sustainable Energy Fund for Africa (SEFA) for the project ''“Promotion of renewable energy in Mozambique – Enabling Environment”''<ref>Bank, ‘Mozambique - Promotion of Renewable Energy in Mozambique - Enabling Environment - SEFA Appraisal Report’.</ref>''.'' This mini-grid project, however, was withdrawn after EDM announced the expansion of the national grid to Titimane. | ||
| + | |||
| + | *'''GET.invest:''' promote the development of renewable energy, including off-grid solutions to attract the private sector and mobilize renewable energy investment in developing countries. | ||
| + | |||
| + | *'''ILUMINA - access to energy for local development and women empowerment''': The project consists of building a 200kWp <ref>Ilumina Project: Access to Energy for Local Development and Women Empowerment (Mozambique)’, ''Engreen'' (blog), 18 August 2019, https://www.engreensolutions.com/ilumina-project-access-to-energy-for-local-development-and-women-empowerment-mozambique/.</ref> mini grid system in the Cabo Delgado province in northern Mozambique and the subsidized sale of stand-alone (individual) solar systems<ref>In Mozambico Si Accende Ilumina’, ''Oltremare'' (blog), 28 March 2019, https://www.aics.gov.it/oltremare/sedi-estere/maputo-donne-energia-sviluppo-in-mozambico-si-accende-ilumina/.</ref>. | ||
| + | |||
| + | *'''REACT SSA (AECF):''' funding existing companies working in off-grid electrification in Mozambique | ||
| + | |||
| + | *'''RERD2 (Enabel)''': funding new generating capacity and connections for micro hydro and solar mini-grid projects in rural areas. Enabel partnered with FUNAE to develop a remote sensing strategy in order to determine the right villages to be served by mini-grid projects<ref>‘Rural Electrification in Mozambique: How to Find the Right Villages?’, Open.Enabel, accessed 9 August 2021, https://open.enabel.be/en/MOZ/2188/1299/u/rural-electrification-in-mozambique-how-to-find-the-right-villages.html.</ref>. In May 2020, FUNAE and Enable launched a call for proposal for conducting technical and financial feasibility study for five hybrid solar mini-grids in Zambezi and Nampula provinces<ref>MOZAMBIQUE: Funae and Enabel Issue Call for Tenders for Mini-Grids Project’, Afrik 21, 10 March 2020, https://www.afrik21.africa/en/mozambique-funae-and-enabel-issue-call-for-tenders-for-mini-grids-project/.</ref>. | ||
| + | |||
| + | For more information about these and other off-grid programs and their implementing organisations [[Energy Access Programmes in Mozambique|'''click here''']]. | ||
| + | ==IPPs and Mini-grid operators== | ||
| + | '''BDD Energia Mocambique''' A mini-grid development company supported by REACT SSA. BDD Energia’s most recent project is the electrification of the Chiloane island in the Sofala Province. The project consists of the construction of a 130 kWp Solar PV mini-grid system to connect 760 households and 29 businesses. | ||
| + | |||
| + | '''RVE.SOL Soluções de Energia Rural S.A.''' A mini-grid developer and operator Company supported by REACT SSA. Through their project Kudura Mini Grid, RVE.SOL has installed several mini-grids in Kenya and East Africa. They are just starting in Mozambique since 2021. | ||
| + | |||
| + | Several mini-grid developer companies who are experienced in the mini-grid market in other African countries are interested in doing business in Mozambique, however the investment risk due to the previous lack of regulatory framework for mini-grids, kept them from taking the step to operate in the country. Some of these companies include ''Standard Microgrid'' ''and'' ''Engie Powercorner.'' It is expected that the new [[Policy Framework and Energy Access Strategies in Mozambique|'''''Regulation for Energy Access in Off-Grid Areas''''' (approved by '''Decree n. °93/2021''')]] would attract more interest from the private sector and offer investment security. | ||
| − | + | == Nanogrid Actors == | |
| − | + | There are emerging companies who uses nanogrids to electrify households whose demand is too small for mini-grids but large for a solar home system. One of such company is the [https://power-blox.com/rural-village-electrification-in-mozambique Powerblox] who have implemented a swarm grid pilot project in Imhambane Mozambique. This nanogrid connects 30 households using modular solar structure and the system can be upgraded in accordance with future demand. [[Nanogrids to Electrify Inhambane, Mozambique|Read more..]]. | |
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| − | * | + | ==Further Resources== |
| + | |||
| + | *[[Mozambique Off-grid Knowledge Hub]] | ||
| + | *[[Mozambique Nano/Mini Grid Hub]] | ||
| − | + | {{#widget:YouTube|id=WzWEcjUcsFU|height=300|width=400}} | |
| − | == | ||
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| − | + | {{#widget:YouTube|id=wVJ11eGqnkM|height=300|width=400}} | |
| − | |||
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| − | == References == | + | ==References== |
<references /> | <references /> | ||
[[Category:Mozambique]] | [[Category:Mozambique]] | ||
Latest revision as of 06:04, 12 September 2022
Introduction
Along with grid-densification and access to solar home systems (SHS), one of the most important measures to achieve country-wide electrification in Mozambique by 2030 is through the development of mini-grids. The mini-grid market for private sector is still small in Mozambique. Regulatory restrictions limit the participation of the private sector to develop mini-grid projects. Unlike the market for Solar Home Systems (SHS) and Improved Cookstoves (ICS), which are targeted at individual users, namely a household or institution, mini-grids provide access to electricity to a larger number of end-users simultaneously. Read more...
This article provides an overview of the mini-grids market in Mozambique with a focus on the stakeholders involved and their roles in the market.
Market Landscape
In Mozambique, the development of a mini-grid project requires cooperation between the following actors:
- FUNAE: promotion of energy services in the areas of dissemination, mobilization of infrastructure financing and guaranteeing operation and maintenance.
- Electricidade de Moçambique (EDM): extension of the national electricity grid and ensuring future interconnections of mini-grids to the national grid.
- ARENE: responsible for approving mini-grid tariffs.
- Private sector (companies and organisations): financing, designing, implementing, operating and maintaining mini-grids. They secure funds either through direct subsidizing of the consumer, through support of the private sector, or through funding available via the initiative of the Government.
- The financial sector, which includes insurers, is responsible for offering financial assistance to the private sector[1].
FUNAE is the implementation agency for off-grid and rural electrification programmes. With financial support from international development organisations, FUANE acts as a public institution in charge of the development and operation of mini-grids and Solar Home Systems (SHS). FUNAE assists the development of mini-grid projects which are later operated and maintained by either EDM or private operators/community members, depending on the operational model of the mini-grid[2]. By 2021, FUNAE has developed 76 operating mini-grids with a total of more than 6 MW installed capacity[3].
While the market for mini-grids remains small, there is large potential for mini-grid development. In 2019 FUNAE published the second edition of the Renewable Energy Projects Portfolio (First edition was published in 2017). This portfolio presents the potential hydropower and solar projects in different stages of feasibility studies and fact-finding visits.
Organisations implementing mini-grid projects in Mozambique do so by supporting startups and well established mini-grid companies in different ways:
- result based financing (RBF),
- providing financing, training, and consulting assistance
- offering grants in the form of technical assistance and tariffs subsidies.
Programmes Supporting Mini-grids
Past programmes, such as the Clean Energy Mini-Grids (CEMG) from the UNDP supporting FUNAE and EDM, aided investment in mini-grid projects leading to an increase in FUNAE’s portfolios. Several initiatives and government strategies are keeping up the pace of the development of mini-grid projects. Below are some programmes/projects supporting mini-grid development as of 2021:
- Mozambique Energy for All, ProEnergia: One of Mozambique’s largest electrification projects, ProEnergia finances the construction of up to six mini-grids, each connecting 431 households and 117 commercial/institutional users in communities where grid expansion and densification is not economically feasible. This contributes to include mini-grids as a driver to reach universal electrification by 2030[4].
- ESMAP: A complementary action to ProEnergia. ESMAP is Mozambique’s Geospatial Options Analysis towards Universal Electrification. This project helps with the analysis of 13 strategic locations for the construction of up to six mini-grids. Priority provinces include: Niassa, Nampula, Zambezia, Cabo Delgado and Sofala[5].
- BGFA (REEEP, NEFCO) : With EUR 6.7 million for mini-grids in Mozambique, this program provides off-grid energy service suppliers with funding for standalone or mini-grid projects .
- BRILHO (DFID): encourage innovation and investment in green mini-grids by offering financial support to existing companies focused on developing mini-grid projects in underserved areas. The call for applications to BRILHO’s Market Development Fund closed in November 2021 and the project is moving to the next phase[6]. This programme aims to support 8 green mini-grids[7].
- Energy Access Fund – A2E (edp): Private sector programme supporting CEMG. A2E provides funding for energy access projects in Mozambique including SHS and mini-grids[8]. One of the most important actions from this project was the planning for mini-grid projects to electrify 500 households in the Titimane village[9]. This initiative was part of a grant from the Sustainable Energy Fund for Africa (SEFA) for the project “Promotion of renewable energy in Mozambique – Enabling Environment”[10]. This mini-grid project, however, was withdrawn after EDM announced the expansion of the national grid to Titimane.
- GET.invest: promote the development of renewable energy, including off-grid solutions to attract the private sector and mobilize renewable energy investment in developing countries.
- ILUMINA - access to energy for local development and women empowerment: The project consists of building a 200kWp [11] mini grid system in the Cabo Delgado province in northern Mozambique and the subsidized sale of stand-alone (individual) solar systems[12].
- REACT SSA (AECF): funding existing companies working in off-grid electrification in Mozambique
- RERD2 (Enabel): funding new generating capacity and connections for micro hydro and solar mini-grid projects in rural areas. Enabel partnered with FUNAE to develop a remote sensing strategy in order to determine the right villages to be served by mini-grid projects[13]. In May 2020, FUNAE and Enable launched a call for proposal for conducting technical and financial feasibility study for five hybrid solar mini-grids in Zambezi and Nampula provinces[14].
For more information about these and other off-grid programs and their implementing organisations click here.
IPPs and Mini-grid operators
BDD Energia Mocambique A mini-grid development company supported by REACT SSA. BDD Energia’s most recent project is the electrification of the Chiloane island in the Sofala Province. The project consists of the construction of a 130 kWp Solar PV mini-grid system to connect 760 households and 29 businesses.
RVE.SOL Soluções de Energia Rural S.A. A mini-grid developer and operator Company supported by REACT SSA. Through their project Kudura Mini Grid, RVE.SOL has installed several mini-grids in Kenya and East Africa. They are just starting in Mozambique since 2021.
Several mini-grid developer companies who are experienced in the mini-grid market in other African countries are interested in doing business in Mozambique, however the investment risk due to the previous lack of regulatory framework for mini-grids, kept them from taking the step to operate in the country. Some of these companies include Standard Microgrid and Engie Powercorner. It is expected that the new Regulation for Energy Access in Off-Grid Areas (approved by Decree n. °93/2021) would attract more interest from the private sector and offer investment security.
Nanogrid Actors
There are emerging companies who uses nanogrids to electrify households whose demand is too small for mini-grids but large for a solar home system. One of such company is the Powerblox who have implemented a swarm grid pilot project in Imhambane Mozambique. This nanogrid connects 30 households using modular solar structure and the system can be upgraded in accordance with future demand. Read more...
Further Resources
References
- ↑ Carteira-de-Projectos-de-Energias-Renovaveis-2019-Final.Pdf, accessed 28 June 2021, https://www.aler-renovaveis.org/contents/files/carteira-de-projectos-de-energias-renovaveis-2019-final.pdf.
- ↑ Mozambique – GET.Invest’, accessed 31 May 2021,https://www.get-invest.eu/market-information/mozambique/.
- ↑ Aler_mar2021_resumo-Renovaveis-Em-Mocambique-2021.Pdf’, accessed 19 July 2021, https://www.lerenovaveis.org/contents/lerpublication/aler_mar2021_resumo-renovaveis-em-mocambique-2021.pdf.
- ↑ Mozambique-Energy-for-All-ProEnergia-Project.Pdf’, accessed 22 July 2021, https://documents1.worldbank.org/curated/en/594061554084119829/pdf/Mozambique-Energy-for-All-ProEnergia-Project.pdf.
- ↑ Mozambique-Energy-for-All-ProEnergia-Project.Pdf’, accessed 22 July 2021, https://documents1.worldbank.org/curated/en/594061554084119829/pdf/Mozambique-Energy-for-All-ProEnergia-Project.pdf.
- ↑ ‘Guidelines for Applicants - MDF, Call for Expressions of Interest’, accessed 30 January 2022, https://brilhomoz.com/assets/documents/HD_BRILHO_Booklet_EN_A4_Digital.pdf.
- ↑ 5 Years on from the Launch of Green Mini-Grids Africa – What’s Been Achieved, and What Have We Learned? | Mini-Grids Partnership’, accessed 1 February 2022, https://minigrids.org/5-years-on-from-the-launch-of-green-mini-grids-africa-whats-been-achieved-and-what-have-we-learned/.
- ↑ Access to Energy Fund Program’, edp.com, accessed 11 August 2021, https://www.edp.com/en/edp/social-responsibility/access-energy-fund-program.
- ↑ ‘Mozambique: Titimane’, edp.com, accessed 18 January 2022, https://www.edp.com/en/mozambique-titimane.
- ↑ Bank, ‘Mozambique - Promotion of Renewable Energy in Mozambique - Enabling Environment - SEFA Appraisal Report’.
- ↑ Ilumina Project: Access to Energy for Local Development and Women Empowerment (Mozambique)’, Engreen (blog), 18 August 2019, https://www.engreensolutions.com/ilumina-project-access-to-energy-for-local-development-and-women-empowerment-mozambique/.
- ↑ In Mozambico Si Accende Ilumina’, Oltremare (blog), 28 March 2019, https://www.aics.gov.it/oltremare/sedi-estere/maputo-donne-energia-sviluppo-in-mozambico-si-accende-ilumina/.
- ↑ ‘Rural Electrification in Mozambique: How to Find the Right Villages?’, Open.Enabel, accessed 9 August 2021, https://open.enabel.be/en/MOZ/2188/1299/u/rural-electrification-in-mozambique-how-to-find-the-right-villages.html.
- ↑ MOZAMBIQUE: Funae and Enabel Issue Call for Tenders for Mini-Grids Project’, Afrik 21, 10 March 2020, https://www.afrik21.africa/en/mozambique-funae-and-enabel-issue-call-for-tenders-for-mini-grids-project/.
