Elec­tri­fy­ing Myan­mar’s power grids

The Myanmar Times - - Business - DI­ETER BILLEN busi­ness@mm­times.com Di­eter Billen leads the Myan­mar team at Roland Berger, a strat­egy con­sult­ing firm for the pri­vate and pub­lic sec­tors.

BY 2030, Myan­mar is ex­pected to con­sume around 80,000 gi­gawatt hours (Gwh) of elec­tric­ity, more than six times its cur­rent con­sump­tion of ap­prox­i­mately 13,000Gwh. This cor­re­sponds to a stag­ger­ing growth of 14 per­cent year-on-year.

Myan­mar’s power gen­er­a­tion ca­pac­ity has for many years strug­gled to ad­e­quately meet the growth in de­mand, and fre­quent cases of power out­ages have been a long-stand­ing nui­sance to Myan­mar peo­ple as well as in­vestors.

Hy­dropower gen­er­a­tion ca­pac­ity, which forms two-thirds of the power gen­er­a­tion mix, is af­fected by sea­son­al­ity, where dur­ing the parched sea­sons of De­cem­ber to March a sig­nif­i­cant por­tion of power gen­er­a­tion ca­pac­ity dries up. Myan­mar’s elec­tric­ity in­fras­truc­ture is also old and prone to break­downs. In ad­di­tion, there are elec­tric­ity ex­port com­mit­ments in place.

Sig­nif­i­cant ca­pac­ity ad­di­tions are needed to meet Myan­mar’s grow­ing thirst for power. Some es­ti­mates in­di­cate that the in­stalled gen­er­a­tion ca­pac­ity in Myan­mar could be as high as 24 gi­gawatts by 2030, cor­re­spond­ing to ca­pac­ity ad­di­tions of ap­prox­i­mately 1.2 gi­gawatts per year, roughly one-quar­ter of Myan­mar’s cur­rent in­stalled ca­pac­ity, each year over the next 15 years.

While in re­cent years in­de­pen­dent power pro­duc­ers have started to fill this ca­pac­ity gap and var­i­ous mem­o­ran­dums of un­der­stand­ing have been signed for the de­vel­op­ment of new projects, there is still lim­ited mid-term vis­i­bil­ity of a clear and de­tailed power gen­er­a­tion out­look.

There is no sil­ver bul­let to solve elec­tric­ity short­ages. En­sur­ing suf­fi­cient, re­li­able and sus­tain­able power sup­ply will re­quire both short- and long-term mea­sures. Re­liev­ing short­ages Most ur­gently, Myan­mar needs to im­prove the re­li­a­bil­ity of ex­ist­ing elec­tric­ity gen­er­a­tion, trans­mis­sion and dis­tri­bu­tion in­fras­truc­ture by sys­tem­at­i­cally re­ha­bil­i­tat­ing cur­rent fa­cil­i­ties. This would in­clude re­fur­bish­ing power plants to ex­tend life, re­li­a­bil­ity and out­put, as well as re­plac­ing crit­i­cal power trans­mis­sion in­fras­truc­ture.

How­ever, the gov­ern­ment will need to at­tract fi­nanc­ing for such ini­tia­tives, through mul­ti­lat­eral de­vel­op­ment banks, in­ter­na­tional fi­nanc­ing in­sti­tu­tions, pri­vati­sa­tion and pub­licpri­vate part­ner­ship schemes.

The use of tem­po­rary gen­er­a­tion units, ei­ther on-land or via power ves­sels, can also pro­vide an im­me­di­ate boost to gen­er­a­tion ca­pac­ity, al­le­vi­at­ing im­me­di­ate short­falls. If fea­si­ble, us­ing the elec­tric­ity from Myan­mar’s ex­ist­ing hy­dropower ca­pac­ity to the fullest rather than ex­port­ing abroad could also al­le­vi­ate sup­ply short­ages.

Elec­tric­ity sup­ply, es­pe­cially to off-grid bor­der re­gions, can also be re­solved by im­port­ing en­ergy from coun­tries such as Laos. The neigh­bour­ing coun­try is a sur­plus power pro­ducer with planned ca­pac­ity in 2020 of 12.5 gi­gawatts, five times more than its pro­jected do­mes­tic de­mand.

The de­vel­op­ment of in­ter­con­nect­ing grid in­fras­truc­ture be­tween the two coun­tries would also en­hance sup­ply se­cu­rity for Myan­mar. Se­lected gen­er­a­tion projects should also be de­vel­oped on a fast-tracked ba­sis. So­lar and gas power projects can be de­vel­oped rel­a­tively quickly com­pared to other sources of power.

So­lar projects in other com­pa­ra­ble coun­tries have been de­vel­oped within eigh­teen months, while gas-fired power plants have been de­vel­oped in six to 12 months in fast-tracked projects.

In com­par­i­son, a coal-fired power plant typ­i­cally takes five years to com­plete. For gas, de­vel­op­ment may be con­strained by the avail­abil­ity of do­mes­tic gas pro­duc­tion in the short term. The de­vel­op­ment of liquefied nat­u­ral gas (LNG) im­port in­fras­truc­ture, such as the one planned at a spe­cial eco­nomic zone in Dawei, could re­lieve sup­ply con­straints.

So­lar on the other hand is not con­strained by fuel sup­ply and could be fea­si­ble in off-grid ap­pli­ca­tions. As such, there could be sig­nif­i­cant po­ten­tial to use so­lar in cer­tain re­gions to ramp up the elec­tri­fi­ca­tion of ru­ral ar­eas that are not con­nected to the na­tional grid.

Long-term charge While the short-term mea­sures are about re­lief and the quick pro­vi­sion of elec­tric­ity, the longer-term mea­sures must be aimed at en­abling as­pects, cre­at­ing poli­cies and in­stru­ments that sup­port sec­tor de­vel­op­ment.

To be­gin with, plan­ning for the coun­try’s gen­er­a­tion, trans­mis­sion and dis­tri­bu­tion in­fras­truc­ture should re­sult in vis­i­bil­ity on firm projects over the next five years. Vis­i­bil­ity on gen­er­a­tion and trans­mis­sion de­vel­op­ment plans will go a long way in boost­ing in­vestor con­fi­dence.

At present, there is no stan­dard­ized frame­work for the de­vel­op­ment of In­de­pen­dent Power Pro­duc­ers. De­vel­op­ing model power-pur­chase agree­ments would ac­cel­er­ate pri­vate in­vest­ments in the power sec­tor.

There are other in­sti­tu­tional as­pects to be strength­ened. For in­stance, im­prov­ing co­or­di­na­tion be­tween in­sti­tu­tional en­ti­ties, ad­dress­ing the longterm sus­tain­abil­ity of a sub­sidised cost struc­ture, and pro­mot­ing strong so­cial and en­vi­ron­men­tal safe­guards need to be ad­dressed. This last point is es­pe­cially crit­i­cal in the de­vel­op­ment of en­vi­ron­men­tally sen­si­tive projects such as coal-fired and hy­dropower.

But above all, plan­ning and in­sti­tu­tional changes should be met with an am­bi­tious im­ple­men­ta­tion agenda. A spe­cialised im­ple­men­ta­tion unit within the Min­istry of Elec­tric­ity and En­ergy could drive timely de­liv­ery of projects and ini­tia­tives.

With ag­gres­sive im­ple­men­ta­tion, Myan­mar should be able to strengthen its elec­tric­ity sup­ply sec­tor in sup­port of the coun­try’s broader eco­nomic trans­for­ma­tion and bring power to the Myan­mar peo­ple.

Photo: Aung Khant

A work­man takes pli­ers to an elec­tric cable.

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