GLOBAL INSIGHT / Mauritius report 2019

Focus on renewable energies offers wave of FDI opportunities

GLOBAL INSIGHT

Mauritius is embracing renewable energies such as solar and wind power, with Japan’s outstanding reputation for state-of-the-art technology making it the ideal investment partner

Unlike many developing countries, Mauritius already offers 100 percent electricity coverage to residents and businesses across the nation. With such an achievement almost unheard of in Africa, Mauritius stands in a privileged position for energy generation and distribution. Well aware of the potential impact of global warming should sea levels rise, the government is committed to boosting the share of electricity generated by renewable energies to 35 percent by 2025 from the current 22 percent. It aims to do this through wind farms, solar energy, biomass and waste-to-energy projects, seeking significant foreign direct investment to maximize such untapped resources. Although bagasse (sugarcane waste) remains the overwhelming source of renewables (89 percent) in Mauritius, the country derives the remaining 11 percent from hydro, wind, landfill gas, fuel wood and solar power.

The national energy policy encourages the use of renewable and clean energy to reduce its dependence on fossil fuels and avoid harmful greenhouse gas emissions. Launched in 2016, the Mauritius Renewable Energy Agency (MARENA) spearheads the adoption and use of renewable energy for sustainable development goals. As per the MARENA Act of 2015, the agency developed the first Renewable Energy Strategic Plan (RESP) 2018-2023; a keystone reference for execution of critical national policy and goals. Designed to support Vision 2030, the RESP reviews energy requirements with the aim to advise the government in the planning and execution of future decisions in its quest to provide clean and affordable energy to the nation.

With its prominent role in addressing renewable energy opportunities and challenges. MARENA falls under the aegis of the Ministry of Energy and Public Utilities, which is headed by Deputy Prime Minister Ivan Collendavelloo. He explained the government seeks international competitive bidding for most of its power projects and favors joint ventures between the local private sector and international firms.

However, in 2017 the Central Electricity Board (CEB) Act was amended to allow CEB (Green Energy) Co., a wholly owned subsidiary of the CEB, to participate in  projects without recourse to public procurement. The aim of CEB (Green Energy) Co. is to promote the development of renewable energy.

Interest in solar power technology heats up

“Renewable energy is a real success story here as we have achieved almost a 1,000 percent increase in just four years,” said Collendavelloo. “Our objective is to secure a 30 percent reduction in carbon dioxide emissions by 2030, and have a 35 percent renewables share in our electricity mix by 2025.”

The minister is eager for Japanese technology to play an integral part in Mauritius’ energy industry, including in liquefied natural gas (LNG). “We have looked at what the Japanese are doing and what they can offer,” he said. “Japanese technology has created a measure of interest with us, especially in offshore LNG technology. Of course, in Mauritius offshore facilities tend to be very attractive, but also expensive. We need to determine how we are going to approach this, but Japanese investors could certainly bring that technology to Mauritius.

“Japanese technology would also benefit us in electric vehicles. This means charging batteries and taking fossil fuels, but if you have solar energy to power your batteries, you can do it. Japanese technology and investment is considered the best for this challenge. My dream is to bring that state-of-the-art technology here.” The country’s current three-year strategic development plan has identified a number of facilitators that will help boost the use of renewables. They include new energy generation capacity and the use of energy efficiency measures, as well as increasing electricity generation capacity through the installation of a 120-megawatt combined cycle gas turbine (CCGT) power plant at Fort George Thermal Power Station near Port Louis.

CEB is powerful energy industry guardian

The plan also calls for investment in renewable energy with a 13 MW solar photovoltaic power plant in Henrietta, a 29.4 MW wind farm of in Plaine Sophie and six solar farms with a total capacity of 65 MW. The impressive success of the national electricity industry is chiefly due to the CEB. The forward-thinking entity is at the forefront of the growing sector, although once a long-awaited electricity act is approved, the CEB will no longer have the role of generator, distributor and authority overseeing the sector. “We produce 40 percent of our electricity from coal and 40 percent from heavy fuel oil, so 80 percent of our energy comes from imported fossil fuels,” said CEB General Manager, Shamshir Mukoon. “Fortunately, we are a sugarcane producing country so we use the bagasse that comes from the processing of this crop. We have around 13 percent from biomass bagasse and four percent from hydropower and 2 to 3 percent from solar.”

The senior executive notes bagasse is considered a low emission combustion material, and that the sugarcane grown helps reduce the amount of carbon dioxide in the air. “We have been releasing tenders and projects within the renewables space and by late 2020 we expect to commission a total of 120 MW of wind power. Today, we only have 40 MW operational. The aim is to bring the renewable energy target from 20 percent to 35 percent in 2025.

“Many of the tenders that are currently being offered by the CEB have been offered on a basis there will be a power purchase agreement between us and the investor. The second thing we have initiated is a customer individual solar plan for private home users. We have allowed them to install their own solar rooftops and connect to the national network. “They produce their own electricity and distribute the surplus to the network. This system of giving autonomy to an individual is known as Small Scale Distributed Generation. We already have 4,000 homes on this system and are looking to increase that number so many more people benefit.”

Lighting up the lives of the disadvantaged

Acutely aware of the huge difference a reliable supply of electricity can make to the lives of people in poorer communities, the CEB runs a series of initiatives that benefit low-income citizens. “For such people we proposed to buy their home solar energy kit, install, operate and maintain it,” Mukoon continued. “This category of customer also benefits from 50 kilowatt-hours of free energy. Whatever excess power comes back onto the grid is then sold to other users and to repair the grid system when problems arise. The groundbreaking and well-received idea was presented to the International Renewable Energy Agency at the World Future Energy Summit in the United Arab Emirates.

“It was ranked as one of the best projects, which resulted in a concessional loan from the Abu Dhabi Fund for Development to realize this. This allowed us to purchase 10,000 solar home kits.. We are also on the lookout for rooftop space, since available land in Mauritius is so scarce.”

While renewables are undoubtedly the future of energy generation for many countries, including Mauritius, traditional fuel sources remain an important part of the energy mix. The CCGT project aims to optimize LNG as a feedstock for the modern power plant. Natural gas is a much cleaner fuel than alternative energy sources like coal and diesel, and will help boost electricity capacity for peak load needs. “We started the feasibility studies on LNG two years back and now have a report ready for consideration,” Mukoon said. “The government needs to decide where and when to build a jetty gas storage facility, import the gas and get it to our shores. Natural gas could then replace all fossil fuels and cut emissions by 40 percent. Our plan is to decarbonize and take coordinated steps to move further into renewables. Japan should explore energy investment in areas like our LNG project as many Japanese firms are involved in this industry and have the experience, know-how and reputation.”