Power Generation in Angola

In the past decade, energy consumption in Angola has skyrocketed, with an annual growth rate of more than 15 percent due to higher living standards, government efforts to expand electricity coverage and an increase in available generation capacity. Consumption remains most concentrated in the northern region, which contains the province and city of Luanda and the highest density of industries, services, and inhabitants. Until 2025, demand is expected to grow at a substantial rate, with the overall system load reaching 7,200 MW – more than four times the current level – and average consumption per capita is expected to grow to 1,230 kilowatt hours (kWh). This is closely linked with the country’s plans for industrialization. While industry currently accounts for just nine percent of energy demand, energy-intensive activities such as mining and iron exploration will serve as key drivers of growth, with industry aimed to account for 25 percent of total consumption by 2025. As a result, the government of Angola has launched the Angola Energy 2025 Vision that aligns with the National Development Plan 2018-2022 and centers on creating increased capacity and distribution capabilities, supported by new renewables and private sector investment.

Generation Capacity

With a current installed capacity of approximately 5,01 GW, three power stations primarily power Angola; Laúca (1000 MW), Capanda (520 MW) and Cambambe (960 MW), as hydroelectric plants generate nearly two-thirds of Angola’s electricity. Meanwhile, the Luanda OCGT power plant is the only operating gas turbine in the country. To meet rising demand, Angola will install 9,900 MW of capacity, with a focus on natural gas and hydropower. In the northern region, two 360 MW will be installed in addition to the 720 MW currently under construction at the Soyo I combined-cycle gas power plant, financed by the Chinese government and built by China Machinery Engineering Corporation. The units will be able to operate in dual-fuel mode, meaning that liquefied natural gas, butane or diesel can all be fed into the units to maximize production. Enacted in May 2018, Presidential Decree 7/18 regulates the natural gas exploration, production, monetization and commercialization and is set to encourage private investment in natural gas production that can supply the expanded Soyo facility.

Of the 9,900 MW of planned capacity, hydropower will contribute 6,600 MW. Phased construction of the Caculo Cabacao hydroelectric project will provide 1,000 MW by 2025, with construction having begun in August 2017. The first turbine of the 2,100 MW Laúca Hydroelectric Plant also came online in the same month and represents the largest civil engineering project in the country and the second-largest dam in Africa. The remaining two 333 MW turbines are planned to go into operation by the end of the year. In the central region along the Queve River, large-scale hydropower projects include the 220 MW Balalunga project and the 400 MW Cafula project upstream. Along the Catumbela river, the Lomaum 2 project will add 160 MW of power and the Calengue project will add 200 MW. In the southern region, Namibe will see the addition of 80 MW gas turbines, while the Baynes Hydropower Plant will move forward with total power between 400 and 600 MW. In the eastern province, the construction of the hydroelectric system of Luapasso is planned, consisting of three projects with a total of 80 MW of installed power.

In addition to hydropower, Angola holds vast potential for renewables. Installed capacity will be fortified by 800 MW of renewable energy and 700 MW of thermal-based generation. The government is prioritizing a number of initiatives to advance development of renewable energies, including the establishment of the National Institute for Rural Electrification, the implementation of renewable energy systems for irrigation, drilling and milling in over 200 agricultural communities and the establishment of at least 200 new businesses that foster renewable energy solutions for rural communities. By 2025, the government will also expand its program for solar villages to every off-grid commune and population with more than 2,000 inhabitants, with the target of connecting at least 500 additional sites.

Transmission and Distribution

Three transmission systems comprise Angola’s national power grid. Through 400kv and 220kv lines, the northern grid encompasses the provinces of Luanda, Uige, Bengo, Zaire, Malange, Kwanza Norte and Kwanza Sul. The central grid runs 400 kV lines from Benguela to Bie and Huambo, while the southern grid covers Huila and Namibe through 220kv lines. To reach a 60 percent electricity access rate by 2025, the Angola Energy 2025 Vision will augment transmission capabilities through the extension of the electrical grid to urban areas, as well as the promotion of decentralization solutions to provide energy services to rural and off-grid populations. Extension of the grid will be completed through the installation of 60 kV substations extending from existing or planned 220 kV substations, with a total length of transmission lines increasing to 16,350 km by 2025.

Within the domestic transmission system, a 220 kV power corridor will be installed between the north and east, along with a 400 kV corridor from Queve to Benguela and Lubango, and a 220 kV corridor to Menongue. In terms of interconnections with neighboring countries, several lines will be installed until 2025. In the north, three connections will be implemented to the Democratic Republic of Congo: 400 kV between Soyo and Inga, 220 kV between Cabinda and Inga and 220 kV between Luachimo and Kananga. In the south, connections to Namibia will be installed via Baynes at 400 kV and via Ondjiva at 50 kV.

Cost Viability

To ensure long-term energy security, Angola will implement mitigation measures that include the installation of prepaid meters, higher tariffs and reduced subsidies for water and energy. Revenue collection remains a top priority not only for Angola but also for the continent. To generate enough revenue to cover operating costs, distributed energy must be metered and paid for by consumers. Another priority concerns progressive power tariffs. Urban areas, where purchasing power is highest, will represent 90 percent of consumption by 2025. An average fee or tariff in line with the region allows the sector to recover its variable costs, including power purchase agreements and the recuperation of investments made by public financing. As a result, an increased electricity tariff went into effect in July, raising feeds for industrial companies but largely protecting consumers with lower incomes. Supported by the tariff, the national regulator, the Regulatory Institute of Water and Electricity Services, has been working to implement a regulatory framework that enables the development of independent power producer projects. To support private sector investment in production, transmission, and distribution in the medium- and long-term, Angola seeks to guarantee the capacity of the sector to generate revenues, with a strong focus on fundraising, implementation, and efficiency.