Are cost-reflective tariffs the solution? Assessing Mozambique Electricity Supply Company (Electricidade de Moçambique – EDM) challenges to provide affordable and reliable services to residential customers

Daniela Salite, Joshua Kirshner, Matthew Cotton

Research output: Contribution to conferencePaper

Abstract

Over 75% of the hydropower electricity generated in Mozambique is exported to neighbouring countries; however, access to electricity continues to be a dream to many of its own citizens, mainly in rural areas. While in urban and peri-urban areas, the reliability, affordability, and quality of services are constant nightmares. With old, fast-growing and overloaded grid connections, and an enduring problematic electricity service provision, small changes in weather and climate represent to many citizens fear of prolonged power cuts or oscillations that are disruptive to their activities and detrimental to their household electrical appliances. On the other hand, while electricity tariffs are currently very expensive to most households’ realities, they are not cost-reflective, thereby putting the national electricity supply company (Electricidade de Moçambique – EDM) in a rocketing financial debt (more than US$1 billion) and insolvency. Thus, cost-reflective tariffs are deemed critical to ensure the company’s sustainability, viability, and provision of quality services. Yet, the tariffs may be unaffordable to many of EDM’s current and future residential customers. This paper examines EDM’s challenges of providing affordable and reliable electricity for all while at the same time ensuring the company’s financial sustainability and viability of operations. We explore the political, economic and technical factors that have contributed to EDM’s struggles to fulfil its social and commercial directives roles.


Methodology
Since November 2019 we have been conducting fieldwork in Mozambique to build a more comprehensive understanding of the history and development of the country’s energy system and the challenges EDM faces to satisfy its social and commercial mandates. To this end, we selected four major cities as the study sites, Maputo and Matola in the Southern Region (Maputo Province), Beira in the Central (Sofala Province) and Nampula in the Northern region (Nampula Province). These cities also have historically differed in terms of political orientation and level of development. Maputo and Matola have been traditionally FRELIMO (Mozambican Liberation Front) supporters, while Beira and Nampula have belonged to the opposition parties, firstly RENAMO (Mozambican National Resistance) and then MDM (Mozambique Democratic Movement). Since EDM is a governmental institution and the state has been run by FRELIMO since independence, these diverse political orientations will allow the correlation of political orientation with the level and quality of electricity service provision. Additionally, we have decided to include both Maputo city and Matola in the survey because even though Maputo city is historically the main city in the province, Matola is mostly an emerging area, has a largest and more populated residential area than Maputo city, so it’s likely to have much more interesting challenging in terms of energy access. This will provide different consumers’ perspectives and allow comparison in terms of challenges of energy provision, affordability, level of consumption and reliability in emerging and developed.
We are currently conducting research in Maputo and Matola cities, but the same methodology will be used in Beira and Nampula cities. Thus, the data that will be presented in the conference will mostly reflect results from Maputo province. However, a final paper will be produced upon the end of the data collection. In each city, we are surveying a total of 6 neighbourhoods (3 peri-urban and 3 urban areas) that are being randomly selected, but we are trying to ensure a balanced selection of the neighbourhoods to include emerging and developed areas, as previously mentioned. Within the neighbourhoods, the surveys are being conducted at household level. These participants are being randomly selected, and where it is possible both husband and wife are being surveyed. This gender balance intends to have different perspectives within the household regarding their month energy consumption, reliability and affordability, including number of times they top-up their pre-paid meters, called Credelec. It also intends to explore their levels of satisfaction with the electricity service provision, complains made to EDM and how they were answered.
At EDM, the interviews are being conducted at different levels, i.e., from the directorial to the technical level. The majority of EDM’s participants are being purposefully selected based on their job position, but others knowledgeable and experienced participants are being selected using snowball. The idea of including these diverse levels of employees is to have a better understanding of the challenges that EDM faces from the managerial to the technical (field) levels to provide quality and reliable services at affordable prices. Thus, the interviews with EDM are being conducted at different locations such as office buildings, stations and thermal centrals. The interviews explore in depth the main challenges EDM faces with their electricity system and the main consumers’ complaints they receive. The interviews also explore the economic, technical and political factors that have contributed to the challenges and how they address them. To broad our understanding of EDM challenges, we are also reviewing official documents, reports and policy briefs from relevant institutions in the energy sector‚ journal articles and media news (television, printed and online newspapers).

Hence, to allow participants to deeply share their knowledge and develop their viewpoints, open-ended questions are being used in the surveys at both household and institutional levels. In addition, the surveys are being audio recorded to capture all participants’ responses and are being transcribed to Microsoft Word and later will be analysed using Nvivo (qualitative data) and Statistical Package for Social Sciences - SPSS (quantitative data).
Original languageEnglish
Publication statusPublished - 2020
EventGrid Reliability and Utility Operations Conference - Accra, Ghana
Duration: 4 Feb 20205 Feb 2020

Conference

ConferenceGrid Reliability and Utility Operations Conference
CountryGhana
CityAccra
Period4/02/205/02/20

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