Power sector in 2030
Mozambique’s power sector is dominated by hydropower, alongside minor production capacities from gas and oil thermal plants. 86% of the country’s electricity production in 2015 was sourced from hydropower, followed by 13% from gas, and 1% from oil. Fossil gas has seen an increase in the past years reaching a level of 20% in 2019.
If this trend continues, it could lock the country in a carbon intensive pathway. 1.5°C compatible pathways indicate that Mozambique would need to reduce its reliance on natural gas and oil from 20% of the power mix in 2019 to a maximum of 2% by 2030. Similarly, carbon intensity would need to drop from 80 gCO₂/kWh in 2019 to a maximum of 10 gCO₂/kWh by 2030, and full decarbonisation by 2033, representing an 89-100% reduction in the sector’s carbon intensity.
This stands in contrast with the country’s NDC target of adding at least 450 MW of new natural gas capacities by 2025. Other reports indicate the intention to increase natural gas supplies to 3.25 GW by 2030. Mozambique is heavily investing in natural gas, and is expected to become the world’s third largest natural gas exporter by 2023, which puts the country at risk of being stuck with stranded assets requiring high upfront investments, considering that natural gas would need to be fully phased out in the following decade.
Mozambique’s NDC also aims to promote renewable energy sources with a total capacity of 567 MW by 2025. With Mozambique’s total installed generating capacity at 2.6 GW in 2016, it is likely that the aforementioned renewable energy target would need to be enhanced to comply with 1.5°C compatible pathways, especially when the intended addition of natural gas thermal plants are included.
Towards a fully decarbonised power sector
The carbon intensity of Mozambique’s power sector would need to reduce from 80gCO₂/kWh in 2019 to zero by 2033 at the latest to be 1.5°C compatible. This could be driven by the complete phase-out of natural gas from the power mix by no later than 2033, and other unabated fossil fuels around 2030. Renewable energies should contribute 100% of the national power mix by 2040, already reaching a level of 79% in 2019, mostly based on hydropower.
The power sector decarbonisation will almost exclusively be driven by the uptake of renewable energy, with solar, hydropower and wind power offering the greatest potentials and sources for upscaling.
However, Mozambique’s intentions to considerably increase its natural gas production capacities, as indicated by the ongoing USD 20 billion Mozambique LNG Project, and the target to construct 3.25 GW of natural gas thermal plants by 2030, risks locking in a carbon intensive pathway and creating stranded assets.