In recent years Mozambique have made efforts to improve the legal and regulatory framework for the electricity sector to create an enabling environment to attract private investment in renewable energy and off-grid projects.
As a result, an Energy Regulatory Authority (“ARENE”) was created in 2017. ARENE has powers for supervision, regulation, inspection and sanctions in the field of production, transmission, distribution, commercialisation of electricity.
A new Electricity Law was entered into force in October 2022 (Law 12/2022 of July 11th) in order to adapt the legal framework of the electricity sector to the current social, technical and financial dynamics of Mozambique, as well as looking to maximise all of its renewable energy sources and reduce the use of fossil sources. The regulations of this law are still in preparation.
The Electricity Law created a new entity, the Manager of the National Electricity System, who shall assume the functions of System Operation and Market Operation, with support from the National Dispatch Center. The new entity will focus on the performance of functions of planning and development of the National Electricity System.
Another feature of the new law is the creation of an Energy Register, which will contain the records of energy supply activities or provision of energy services, as well as the respective suspension, modification, extension and extinction of a facility.
Other than the Concession Fee, the new Electricity Law also introduced new fees on the electricity supply activities: i) the universal access fee and (ii) the regulatory fee.
In December 2022, the Government published the Regulation on the Tariff System for the Supply of Energy through the National Electric Network, which establishes the methodology that will allow the Regulatory Authority to approve tariffs and prices.
Regarding the Off-grid area, a Regulations for Energy Access in Off-grid Areas entered into force in January 2022. It establishes the principles and rules applicable to supply activities for access to energy in off-grid areas, through mini-grids of up to 10MW and energy services (defined as services for energy consumers, preferably renewable, such as supply, financing, installation, operation, maintenance of electrical equipment and installations, including autonomous systems).
The Energy Regulatory Authority approved in 2022 several rules pertaining to the Off-grid areas: i) Mini-grids Interconnection Regulations; ii) Regulations of Technical and Safety Standards applicable to electrical equipment and installations for mini-grids and autonomous systems; and iii) Regulation of Quality of Service and Relationships Commercials in providing access to energy in off-grid areas. More recently, in May 2023, the Regulations for the Award of Concessions for Mini-Grids were published.
A revision of the electricity grid code is in course, and it is expected to include provisions respecting the integration of renewable energy plants within the national electricity grid.
The Government has launched a Renewable Energy Auction Program (“PROLER”), the first initiative for renewable energy auctions in Mozambique. The objective is that renewable energy power generation projects are launched in a transparent, competitive and sustainable manner, supported by a sound technical, financial and legal framework. PROLER is expected to attract Independent Power Producers and leverage private investment of approximately 200 million Euros to implement four renewable energy projects (three solar and one wind) with a unit capacity of 30 to 50MW interconnected to the national grid.
The first tender was for a 30MW/40 MW solar power plant in Dondo, in Sofala Province. TOTAL EREN S.A. won this tender in 2022, thereby reflecting the global tendency of oil and gas majors to step into renewables. There are two tenders in course for two 30 MW solar PV plants in Manje (Tete province) and in Chimbunila (Niassa province), and it is expected that a fourth tender will be launched for a wind farm in the Inhambane province.
There is also another tender initiative being put in place, the GET FiT Mozambique program. It aims to promote tenders for on-grid PV solar projects, with storage, and small hydropower plants projects.
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