This document assesses the main long term options, and establishes the Government’s atlas and vision for development of the electricity sector in the 2018-2025 horizon, identifying priority investments in generation, transmission and interconnection, as well as the distribution and network expansion model up until 2025.


The long term strategy Angola 2025, establishes strategic objectives for the country, which represent strategic challenges for the development of the energy sector, independent from the current situation of the oil markets.
The growth of generation capacity and the expansion of the grid, as well as the mobilization of private capital, are strategic long-term axes established in the Policy and Strategy for National Energy Security, with impact on the long term development of the country and on the diversification of the national economy.
The National Development Plan and the Action Plan for the Sector, establish clear investment goals and plans for the 2013-2017 horizon. Given the long implementation timeframes for investments in the sector, it is critical that priorities and key projects be defined now, for a 2018-2025 timeframe, in line with the goals and aspirations of Angola Strategy 2025 and the Electric Sector Transformation Process (PTSE), currently underway.

The 2025 vision for the power sector is based upon the goal of meeting the country’s needs and, given the high level of those needs and the timeframe available, maximizing well-being through ambitious goals and an efficient allocation of resources.

Evolution of demand up to 2025
A strong growth of energy consumption is anticipated up until 2025, foreseeably reaching a load of 7.2 GW, more than four times the present. This growth will result mainly from bringing power to 60% of the population, from the increase in residential consumption, growth of national wealth through
the services sector and from the country’s industrialization.

Expansion of the electricity network from a Demand point of view
Comparative studies have shown that investing in grid expansion with an economic rationale – keeping the existence of isolated systems where grid investments have long distances per energy unit or when there are competitive small hydro projects nearby - allows greater regional and territorial balance in overall energy supply.

Rural Electrification
Electrification outside large urban areas – which will be the responsibility of the future National Institute for Rural Electrification – will concentrate on the goal of bringing electricity to all municipality and commune townships in the country. Grid extension will be considered a priority and will enable the electrification of 5% of the population and of 173 locations. Isolated systems based upon small-hydro, diesel or solar, will serve 32 locations. It is also
anticipated that, in accordance with the Strategy for New Renewable Energies, 500 “solar villages” will be installed in off-grid main villages and in other settlements of larger dimension and, for the remaining population, individual systems based on solar energy will be supplied.

Angola has numerous options for the generation of power. The present document considers the key options - hydro, thermal and new renewable– individually and combined in scenarios that meet the required levels of safety and redundancy. The generation mix selected for the 2025 horizon results from a weighting of criteria: economic, regional development, environmental and energy security.

New large hydropower plants
Angola has exceptional hydro resources, with 159 sites identified in previous studies as having potential for large hydropower plants, in addition to those already under construction or decided upon. From these 159, the best sites were analysed and compared in detail by means of a strategic environmental evaluation and 3 scenarios were developed, with different priorities: economical Optimization, Economy/Territorial balance and Regional Development.
Additionally, some planned or already decided hydropower plants have been optimized, taking into account energy security and the system integrated needs.

Natural gas and other thermal sources
The beginning of operations of the natural gas terminal at Soyo makes it possible for the power system to operate with a lower cost fuel and lower levels of emissions than diesel (which implies high costs and subsidies).
Several alternative sources of gas were evaluated, recommending the full use of the gas available for national consumption in Soyo, the use of liquefied natural gas (LNG) also for internal consumption in Luanda, Benguela and Namibe, and the use of on-shore natural gas available in Cabinda for local power generation. The materialization of recent natural gas discoveries, depending upon the strategic decisions that will be taken, may have a relevant impact in the national energy matrix. Therefore, possible locations of gas treatment infrastructures were considered and the installation of power plants in these locations, namely Namibe, Benguela and Kwanza Sul was analysed.
As regards the remaining thermal sources, the Coke which will result from the new refinery may constitute a low cost source of energy, but with high emissions of CO2, to be used eventually for own consumption. LNG and heavy fuel oil (HFO) should replace diesel whenever economically justified, keeping diesel essentially for reserve or backup power plants.

The new renewables
Government has recently approved the National Strategy for New Renewable Energies, with an overall objective of 800 MW and concrete targets for each of the main sources, which are considered under the vision.

Generation scenarios and options
The various sources of energy have been combined in accordance with 4 main guidelines resulting in 20 scenarios. Each scenario was detailed so as to ensure a minimum required level of guaranteed power capacity, sufficient to safely satisfy the demand.
The three scenarios presenting lower overall cost - which balances generation cost, investment level, impact on transmission infra-structure as well as environmental cost or impact - were then compared and a scenario was selected. The 2025 vision opted to balance hydro and natural gas and to prioritize hydropower plants and locations that optimize the balance between economy and regional development.

Power system in 2025 - 2025 power sector vision
Demand will see significant growth based on an electrification process focused in provincial capitals and municipal townships (which represent 97% of the 3.7 million household clients expected in 2025) and commune townships whenever economic and technical rational allow it. Priority will be given to grid extension so as to maximize the number of municipal and commune townships and the continued investment in structural projects in the interconnected grid.
In order to ensure a safe power supply, even in years of lower hydro flow, Angola should have 9.9 GW of installed capacity – through increasing power capacity in all sub-systems and through a strong reliance on hydro and gas (which will correspond, respectively, to 66% and 19% of installed power capacity).
Angola will achieve more than 70% of installed renewable capacity – one of the highest percentages in the world – which includes 800 MW of new renewables (biomass, solar, wind and mini-hydro). Angola will thus be on a level playing field with the best 10 countries in the world in SADC, OPEC and OECD, as to installed renewable power and CO2 power sector related emissions.

Generation dispatch will depend greatly on hydrology. In favourable years hydro will represent more than 70% of internal consumption, gas production will also serve exports, and the remaining thermal will be used only as a backup (representing less than 1% of the generation). In dry years, hydro will account only for 48% of production, gas power stations will be fully functioning for internal consumption, there will be a high utilization of the remaining thermal backup units and it may be necessary to import energy in off-peak hours. Maintaining supply security requirements, Angola may export energy in wet periods and import during off-peak hours in dry periods.

The National Transport Network will continue to expand after 2017, with the goal of interlinking all provincial capitals, of taking the power grid to an ever increasing number of municipal and commune townships, of maximizing generation efficiency and of promoting Angola’s interconnection to the regional system of SADC.
The North-Central-South transport corridor will provide provinces with competitive energy and enhanced supply security, connect the Angolan power system to DR Congo (in the North) and Namibia (in the South) and, after 2025, allow the transport of gas based generation from new gas discoveries.

Atlas and impact on the territory
All investments contemplated in the vision have an impact on the territory. The detailed Atlas of the power sector in 2025 is presented offering a view of the territorial dimension of the vision and the possible impact for each Province, Municipality or Commune. Investments with higher impact on the territory will be the hydropower plants, in particular those with regularization and multi-purpose possibilities, biomass plants and electricity energy distribution.

Achieving the vision: Public Investment and Private Sector Participation
To achieve the vision in the 2018-2025 horizon it will be required to mobilize public and private investments of USD23b.
The mobilization of a new investment cycle, without undermining the support to other sectors also strategic for the country, requires the power sector to generate revenues to repay those investments in the medium and long term. The study shows that the lower costs of hydro and gas allow to ambition a financially self-sustaining sector with electricity tariffs in line with those charged in the region. However, that vision requires a strong commitment to losses reduction and a gradual update of electricity tariffs.

Public investment will progressively be replaced by long term private financing. Public financing is to be reserved for investments in the public sphere: large dams, the national transport network, investments in the distribution areas allocated to the public utility and rural electrification.
The remaining investments should be progressively undertaken by the private sector, enabling single buyer’s creditworthiness in a way that allows for the mobilization of the required funding.