Maputo: Mozambique is at a pivotal moment in its energy development journey. On its northern coast, the country stands to gain significant revenue from offshore gas projects valued at billions of dollars. At the same time, Mozambique possesses immense untapped potential in solar and wind energy, making it a hydro powerhouse with the capability to leap into a renewable energy future.
According to Deutsche Welle, the global push to move away from new fossil fuel development intensifies the debate on whether developing countries like Mozambique must rely on fossil fuels to achieve economic growth, or if they can directly transition to clean energy sources. Historically, industrialized nations have built their wealth on coal, oil, and gas, contributing significantly to global emissions. The Global Carbon Budget identifies the United States, the European Union, and China as the largest historical polluters. Energy leaders in Africa and Asia argue that it is unjust to deny developing economies the same path to prosperity. However, with greenhouse gas emissions at record highs, the feasibility of this route is increasingly questioned.
Professor Philipp Trotter from the University of Wuppertal in Germany suggests that while it may seem morally justified for poorer countries to utilize fossil fuels, the economic viability of such a path remains uncertain. The competitiveness of Mozambique's gas in the global market is unpredictable, especially as major economies aim to cut emissions by 2050, potentially reducing demand for fossil fuels.
The economics of renewable energy have shifted, with over 90% of new clean power projects worldwide producing electricity more cheaply than new fossil fuel plants, according to the International Renewable Energy Agency. Yet, the upfront investment required for building renewable infrastructure remains a significant barrier, particularly for developing nations.
Kenya serves as a successful example of investing in renewable energy, generating almost 90% of its electricity from geothermal, hydro, and wind sources. The Kenyan government’s long-term investment strategy, beginning in the 1990s, demonstrates the potential of renewables. However, replicating this model in countries like Mozambique or Senegal may be challenging due to financial constraints and lower credit ratings.
The pathway a country takes in its energy transition is influenced by various factors, including the role of fossil fuels in its economy and the diversification of its economic activities. For instance, while India has made significant strides in renewable energy, coal still plays a dominant role in its power generation, highlighting the complexity of transitioning to green energy.
Wealthier nations can play a critical role in facilitating the shift to renewables in developing countries by addressing the steep upfront costs and providing financial guarantees to lower perceived investment risks. At the UN climate talks in 2024, governments agreed on a new climate finance goal of at least US$300 billion per year by 2035, though many developing nations argue that this figure is insufficient.
For Mozambique, the decision between pursuing gas exploitation or investing in solar and wind energy may hinge on the willingness of wealthier nations to invest in its cleaner energy future. The outcome of this decision will significantly impact the country's economic and environmental trajectory.