Mozambique Energy Sector

Mozambique's energy sector is poised at a crossroads, rich in resources yet challenged by infrastructural and governance obstacles. The sector is vital for the nation's economic development and social well-being, promising transformative impacts if harnessed effectively. Energy access fuels industries, empowers communities, and drives overall economic growth, making it a critical area for strategic development.

1. Resource Abundance and Potential

1.1 Natural Gas Reserves

Mozambique is home to some of the largest natural gas reserves in the world, primarily located in the Rovuma Basin. These reserves have the potential to transform Mozambique into a major global player in the energy markets. Initial estimates suggest that the basin holds over 100 trillion cubic feet of natural gas. The development of these fields, managed by international energy giants such as ExxonMobil and Eni, could generate billions of dollars in revenue and create thousands of jobs. Natural gas exports are expected to significantly boost the country's GDP, facilitate infrastructure improvements, and enhance energy security.

1.2 Coal Reserves

In addition to natural gas, Mozambique boasts substantial coal reserves, particularly in the Tete Province. These reserves are among the largest in Africa. While coal remains a crucial part of Mozambique's energy mix, contributing to both domestic electricity generation and export revenues, its environmental impact cannot be overlooked. Nonetheless, coal exports are a major revenue stream and support numerous jobs, making it an essential sector for the country's economy in the short to medium term.

1.3 Renewable Energy Resources

Mozambique also has immense potential for renewable energy development. The country's geography is conducive to hydroelectric power, with the Zambezi River providing significant hydroelectric potential. Additionally, Mozambique enjoys high solar irradiance and wind speeds, making it ideal for solar and wind energy projects. Current projects include the Mphanda Nkuwa Dam and several solar power initiatives aimed at increasing energy access in rural areas. Expanding the renewable energy sector could diversify Mozambique's energy portfolio and reduce reliance on fossil fuels.

 Sources of electricity generation in Mozambique  

Below are the most recent approximate figures/percentages for the sources of electricity generation in Mozambique as of the latest available data:

• Hydropower: Approximately 80% of Mozambique's electricity comes from hydropower. The Cahora Bassa Dam alone contributes a significant portion of this, with an installed capacity of around 2,075 MW.

• Natural Gas: Natural gas accounts for roughly 18-20% of Mozambique's electricity generation. Major gas-fired power plants such as the Ressano Garcia Power Station contribute significantly to this figure.
• Coal: Coal-fired power plants contribute a smaller share, around 1-2%, of the total electricity generation mix. However, coal is more significant as an export commodity for Mozambique.
• Solar and Other Renewables: Solar energy and other renewable sources are currently contributing less than 1% to the electricity mix, but efforts to increase this percentage are ongoing. Mozambique has ambitious plans to increase the share of renewable energy in the coming years.
• Wind and Biomass: Wind and biomass energy contributions are still in developmental stages and thus represent a very small fraction, currently less than 1%, of the overall electricity generation.
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Infrastructure Development

2.1 Existing Infrastructure

Mozambique's current energy infrastructure is underdeveloped, leading to frequent power outages and high transmission losses. The country has a total installed power generation capacity of around 2,800 MW, with the majority sourced from hydroelectric plants. However, the national grid is limited, with significant portions of the country, especially rural areas, lacking access to reliable electricity. Transmission and distribution networks are concentrated around urban centers, leaving rural areas underserved.

2.2 Challenges and Limitations

The primary challenges facing Mozambique's energy infrastructure include aging generation facilities, inefficient transmission and distribution networks, and financial constraints. Current infrastructure is insufficient to meet growing energy demand, resulting in reliability issues and high energy losses. Additionally, inadequate investment in maintenance and upgrades has led to a gradual deterioration of existing assets. The bureaucratic complexities and regulatory uncertainties hinder the development of new projects, adding to the sector's limitations.

2.3 Planned and Ongoing Projects

To address these challenges, Mozambique has embarked on several key infrastructure projects. The development of liquefied natural gas (LNG) plants in the Rovuma Basin represents a significant investment in the sector. Companies like TotalEnergies and ExxonMobil are leading massive LNG projects aimed at exporting natural gas and ensuring domestic supply. There are also plans to expand the national grid through projects like the Mozambican backbone (CESUL), which aims to connect the northern and southern parts of the country. Partnerships with international donors and private investors are crucial to these projects, offering both financial support and technical expertise. These developments promise to enhance Mozambique's energy capacity and reliability, paving the way for sustainable growth.