Why pairing solar energy with battery storage was the solution to Mozambique’s energy challenge
CPCS designed Sub-Saharan Africa’s largest solar and battery storage procurement program
- Solar and battery combination is accelerating Mozambique’s objective to secure universal access to electricity by 2030
- Solution alleviates grid constraints by providing energy to cities that need it the most
Addressing energy demands in Mozambique
Mozambique’s generation potential of 187 gigawatts is greater than Africa’s entire electricity production. It is virtually Southern Africa’s power generator.
Yet, despite being a net exporter of power, only 29 per cent of Mozambique’s population has access to electricity. This is because the country and the electricity utility lack the capital to invest in the transmission and distribution infrastructure needed to effectively deliver power to all of the population.
As a rapidly developing country, Mozambique has committed to achieve universal access to electricity by 2030.
This is where the Global Energy Transfer Feed in Tariff (GET FiT) Program comes into play.
Developed by the German development bank kfW, GET FiT provides tools to help emerging economies develop small-scale renewable energy projects. Provisions such as technical and funding assistance and risk mitigation make projects part of this program attractive to investors.
Through GET FiT, Mozambique has realized that achieving universal access to electricity likely requires renewable energy, battery storage and decentralized solutions.
How to make GET FiT “fit”
Making GET FiT work in the Mozambican context is easier said than done.
CPCS, a global management consulting firm in the infrastructure sector, brought the right combination of technical, financial and public-private partnership knowledge to develop an innovative solution for the country.
“GET FiT is a toolbox of support options,” says Robert Graham, CPCS’s Global Director, Power Advisory. “Our role was to craft a plan to best adapt these tools to Mozambique’s unique needs and context and achieve stated objectives.”
Doing so requires deep knowledge of the country’s economic, financial and political realities.
Equally important is the technical aspect of the program. While GET FiT promotes renewable energy projects, it does not specify which technologies to use and how to adapt the tools to the local context.
The challenge, then, was to determine the support tools as well as the renewable energy technology that best addresses energy needs in Mozambique.
Bringing solar and battery into the mix
CPCS experts concluded that combining solar power and large-scale batteries was the best way to energize Mozambican cities and villages.
This was not a routine assessment, because pairing solar power with battery procurement of such a scale had never been done in Africa.
But CPCS felt confident breaking the mould for many reasons.
First, this combined solution is financially sound, as the price of solar has plummeted over the past decade. In Africa, solar can be as cheap as $0.03 per kilowatt-hour. Compared to other renewable energy sources like hydro and wind, solar tends to be the economic choice.
The same goes for the price of battery storage. Like what happened to solar in the 2010s, batteries will likely become much more affordable in the 2020s.
Low costs mean that financial donors and investors are likely to be more interested in backing renewable projects in Mozambique.
Second, solar power is quicker to deploy than other sources of renewable energy.
“Having a solar power system running in three months is possible,” says Rob. “In contrast, large hydro projects can take decades. Even wind turbines can require up to 18 months of data collection before moving to the development stage.”
Third, paring solar and battery is flexible. Solar power systems can be installed anywhere with good sunlight, and batteries can be placed right next to demand centres. Other renewable energy sources are more limited in terms of placement.
In short, the solar and battery combination addresses Mozambique’s main energy objective, which is to improve access to electricity as quickly as possible.
A complete solution for a growing economy
Coupling solar with battery storage not only addresses Mozambique’s energy needs but also meets infrastructure challenges in the power sector.
Mozambique has always had difficulties moving electricity from power stations to people’s homes; its power stations tend to be far from cities and villages.
As such, Mozambique had to build lengthy transmission lines to connect these stations with population clusters. Overloaded or inadequate long transmission lines mean more power outages.
Because Mozambique lacks access to sufficient capital to invest in adequate transmission and distribution infrastructure, abundant power generation has not translated into reliable electricity access for Mozambicans. More traditional power generation projects on their own are not the solution to electricity access goals.
This is where the flexibility of solar power systems and batteries kicks in. They can be placed right next to cities with unreliable power. This way, these cities can bypass their reliance on long overloaded or unreliable transmission lines.
Battery storage technology also ensures plenty of energy in the afterhours, alleviating solar power systems’ traditional inability to provide round the clock solutions. Solar power systems themselves do nothing to address peak electricity demand hours in Mozambique, which are between 6 p.m. to 10 p.m.
Overall, the innovative solar and battery solution resolves Mozambique’s power infrastructure challenges in three ways:
- Reduce reliance on expensive transmission lines
- Provide power to cities that need it the most
- Minimize the frequency of outages
In the near future, every population centre in Mozambique, no matter how remote, will have access to electricity at any time of the day.
CPCS innovates on the ground
Of course, using batteries to complement solar power systems is not new.
“The innovation lies in how CPCS has applied this solution in a way consistent with Mozambique’s regulatory, legal and financial realities, and how CPCS has attracted private capital to pay for these projects,” argues Rob.
In fact, battery procurement was not even part of the original GET FiT toolbox.
Before CPCS set foot in Mozambique, no framework detailed how to fit battery storage in the country’s regulatory, legal and financial context. Neither has it been part of the GET FiT toolbox.
Predictably, investors and financial donors were leery to fund large battery programs. They also downplayed the economic competitiveness of this solution. Buy-in was scarce.
Therefore, the brunt of CPCS’s work in Mozambique was to show stakeholders that the union of battery storage and solar is technically and financially feasible with the right program design.
Mozambique will soon launch the largest solar-storage program ever conceived in Sub-Saharan Africa, as imagined and designed and by CPCS.
Following the roadmap
Mozambique intends to commit to the procurement of renewable energy projects in three rounds:
- The first is acquiring solar generation systems and battery storage for areas in the greatest need of energy. CPCS expects an additional energy production and transmission of 60 megawatts.
- Traditional small hydro projects will be developed, providing a relief of 40 to 60 megawatts.
- Building on the success of the first round, a third potential round was designed to use solar and battery procurements to target even smaller and more remote sites, strengthening and extending the electric grid in Mozambique.
“All things considered, we expect that GET FiT will improve reliability of energy access for over a million Mozambicans currently suffering from unreliable grid power,” concludes Rob.
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Rob Graham is CPCS’s Global Director, Power Advisory. Rob is an economist with experience in electricity market reform, policy and program development as well as subsidy and tariff design, large electricity transactions and project development.