Mozambique at risk of exceeding its installed power capacity

Mozambique’s demand for electricity is in danger of exceeding its installed capacity, warns Fernando Juliao, former head of the publicly-owned electricity company, EDM, in an interview published in Monday’s issue of the independent daily “O Pais”.“The increase in demand will be dispersed, in various parts of the country”, said Juliao, who was at the helm of EDM from 1980 to 1995. “So we will have to create infrastructure, not only in terms of generating capacity, but also in terms of transmission capacity so that the power reaches the centres of consumption”.Currently, Mozambique consumes around 700 megawatts of power (a figure which excludes the MOZAL aluminium smelter on the outskirts of Maputo). Juliao expected this consumption to rise within the next 20 years to 2,500 or 3,000 megawatts. That would be the equivalent of “another Cahora Bassa”, he said.The Cahora Bassa dam, on the Zambezi river, is far and away the largest source of electricity in the country. When operating at full capacity, its five giant turbines can generate 2,075 megawatts. The majority of this power is sold to South Africa, under contracts with the South African power utility, Eskom.
Juliao admitted that his forecast for growth depends on industrial projects currently on the drawing board coming to fruition. “If some of the industrial projects that are envisaged do not happen, evidently that will change significantly the demand forecast”, he said. “The bodies responsible for planning the expansion of the system must pay careful attention to this”.Juliao did not believe that funding new power sources would be a problem. “Any project that is viable mobilizes finance”, he said. But that viability was largely dependent on exports.Juliao thought there was always “a delicate balance” between the domestic consumption of power and electricity exports. And realistically, the only place in the region to which large amounts of electricity can be exported is South Africa.South Africa accounts for 83 to 85 per cent of power consumption in the southern African region, and will need to add another 2,000 or so megawatts every year.Yet despite this Eskom has not signed firm agreements to buy power from Mozambican projects that have been on the table for many years – such as a second power station at Cahora Bassa and a dam at Mpanda Nkua, 60 kilometres downstream from Cahora Bassa.“We always had difficulty in treating our contacts with South Africa in a uniform fashion”, said Juliao. “We had several projects happening, with different players, which sent different signals to South Africa. There was no single, well-defined signal, with a well-defined strategy, so that the South African market would understand what we want”.“We have to create an environment which allows the market and the investors to feel comfortable, to feel that they are entering a zone of credible investment, that gives them the prospect of a return on their investment, and that when they enter contracts to purchase power, those contracts will be honoured”, he added.