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Deloitte Energy Outlook: Mozambique Could Be Worth 20% of Africa’s Energy Production by 2040

Deloitte Energy Outlook: Mozambique Could Be Worth 20% of Africa’s Energy Production by 2040

Consulting firm Deloitte believes that Mozambique will be the future energy hub of southern Africa, considering that the country’s vast gas reserves could make it one of the world’s top ten producers, responsible for 20 per cent of Africa’s production by 2040. Analysts point out that the entire sector is expanding, covering a diverse range of renewable energies, such as biomass, hydro, solar and wind.

In the Africa Energy Outlook 2024, Mozambique Special Report, Deloitte makes an in-depth analysis of the sector, pointing out the trends that will shape the country’s energy mix over the next decade and recommending some measures for Mozambique to position itself as Southern Africa’s energy hub with the capacity to generate 187 GW of energy from coal, gas, hydro, solar, wind and other renewable sources.

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The document also concludes that the country is still a good example of Africa’s energy paradox, pointing out that despite the vast resources, poverty and a lack of access to energy still prevail (in a territory with 32 million inhabitants, 62 per cent of whom live in rural areas, only 44 per cent have access to electricity). Below we present the main challenges and opportunities for the next five to ten years in the areas of fossil fuels and renewable energies.

Fossil fuels: one of the largest reserves of gas and coal

Oil: Mozambique does not produce oil, although it does produce condensed gas for export through the Pande-Temane project. The liquefied gas projects underway in the Rovuma basin will also help to reduce the high dependence on oil imports. In addition, the government has been promoting the production and use of biofuels, as well as the growing use of gas-powered vehicles.

Coal: Mozambique has one of the largest coal reserves in the world. The Moatize mine alone has proven reserves of 1.9 billion tonnes. The government’s plan is to increase the installed capacity to 1.7 GW (gigawatts) by 2042, ensuring an annual electricity production of 2 TWH (terawatt hours). Although this energy source is being phased out globally, coal can continue to play a decisive role in exports and in supplying domestic industries such as iron and steel.

Natural gas: Mozambique has the largest reserves of natural gas in sub-Saharan Africa, estimated at 180 tcf (billion cubic feet). With projects such as PSA, Coral South and North (FLNG) and Mozambique LNG, production could double by 2030, making the country the third largest regional producer. In addition, natural gas emits 50 per cent less carbon than oil and coal and is therefore increasingly in demand on the global market. The consultancy estimates that gas could generate 100 billion in revenue for the region.

Renewable energies: one of Africa’s greatest hydroelectric potentials

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Hydropower: Mozambique’s hydroelectric potential, estimated at 12,500 MW, is one of the largest in Africa. With major investments underway in Tete province, such as the Mphanda Nkuwa project (2000 MW) and Cahora Bassa Norte (850 MV, in addition to the current 2000 MW), it is expected that installed capacity could reach 4539 MW by 2030 and that Mozambique will play a central role in supplying electricity to neighbouring countries.

Solar and wind power: this segment is expected to account for 20 per cent of the country’s energy mix by 2040, with installed solar power capacity of 266 MW and wind power capacity of 40 MW by 2030. In solar energy, in addition to the Mocuba (Zambézia) and Meteoro (Cabo Delgado) plants, Cuamba II (Niassa) is expected to be built with 20 MW. In wind power, the new projects in Inhambane and Namaacha could generate an additional capacity of 170 MW.

Biomass and others: as Mozambique is one of the world’s top ten coal producers, the country has great potential for biomass production, estimated at 2 GW. At the same time, forestry waste is expected to generate 750 GWh of energy. It should be remembered that 95 per cent of the Mozambican population still uses biomass, wood and coal as their main source of energy for domestic consumption. Mozambique is also among the world’s top three producers of graphite, a material increasingly used in renewable energy technologies.

Source: Deloitte (Africa Energy Outlook 2024, Mozambique Special Report)



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