Perspective & Analysis Focus Asia

No. 9 September 2014

The Electrification of Thurain Win

Myanmar has the lowest electrification rate among the ASEAN countries with less than 30 percent of the population having access to electricity. Upgrading its electricity infrastructure and updating legislation gov- erning the electricity sector is central to Myanmar’s economic development and for alleviating rural pover- ty. In particular, Myanmar is seeking to utilize its rich hydropower resources, which have been estimated at over 100,000 MW. In this paper the author provides an overview of Myanmar’s electricity sector and power generation potential in addition to outlining some of the challenges the country faces.

n a speech delivered on May 20, 2011, at the Na- agricultural-based economy with around two-thirds of tional Level Workshop on Rural Development the population living in rural areas with no access to and Poverty Alleviation, President Thein Sein em- electricity. If the population is to be lifted out of pov- Iphasized that: “In Myanmar, rural people who make erty and economic development is to proceed, Myan- up about 70% of the population are the main working mar therefore needs to not only harness its energy re- force, and the majority of them engage in agricultural sources—in particular exploiting its rich hydropower and livestock farming. Therefore, boosting production potential—but also make the necessary reforms to its of goods and economic development of rural areas is electricity sector, which has hitherto been regulated by the engine of national economic development. Only outdated laws. with economic development of rural areas, will there be alleviation of poverty.”1 Myanmar’s Low Electrification Rate Economic development is accordingly a priority for Myanmar. As part of its development, efforts are While the Myanmar government has recognized that needed to upgrade the country’s basic infrastructure, development of the energy sector is fundamental for including roads, bridges, communication systems, and meeting the basic needs of the populace and for the the electrical grid. In particular, boosting electrifica- country’s overall development strategy, Myanmar’s tion is a key driver for the economic development and industrialization of Myanmar. Currently Myanmar is faced with uneven electricity supply and chronic Thurain Win is a former guest researcher at ISDP. He is electricity shortages. Furthermore, Myanmar is an a fellow at the Myanmar Development Research Institute.

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electrification rate continues to be the lowest among TheFocus Asia Series of the Institute for Security the ASEAN countries. The table below illustrates the and Development Policy provides accessible, in- contrast between Myanmar and Thailand—two coun- sightful commentary and analysis of the contem- tries with similar-sized populations—in terms of the porary challenges facing Asia in the twenty-first electrification rate, per-capita consumption, and in- century. It also serves as a forum for the Institute’s stalled capacity per population. visiting researchers to provide their viewpoints on the security and development issues affecting their Table 1. Electrification Rates of Myanmar and Thailand countries, which add a much needed Asian per- Myanmar Thailand spective to the policy and research debate. Population 60 million 67 million Cover photo: Light bulb by Gonzalo Vlera Electrificatiion 26% 99.4% Azpiroz, licensed under Creative Commons. rate Per capita con- 104 kwh 2045 kwh For editorial correspondence please contact sumption Alec Forss at: [email protected] Installed capacity 3.5 gw 32 gw

At present the national electricity grid covers only Disclaimer: The opinions expressed in this paper about 30 percent of the country—that is, the popu- are those of the author only and do not necessarily lation living in the central basin of Myanmar. Many reflect those of ISDP or its sponsors. parts of the country, especially in the south and north, are not connected to the grid. Furthermore, the na- tional grid has no direct connection to other grids of jects currently under construction (see Appendix 2 for neighboring countries. The current network (see Fig- list of projects between 2013-2016). ure 1 opposite) is comprised of transmission lines of 230 kV with a total length of 1979 km, 132 kV with Figure 1. Myanmar’s Electrical Power National Grid a total length of 2334 km, 66 kV with a total length of 3929 km, and 33 kV with a total length of 27 km. * See Appendix 1 Current electricity supply, dominated by hydropower for full list of followed by gas and coal-fired thermal power, is some stations 30 percent below demand.

Myanmar’s Rich Power Potential

Belying the country’s low electrification rate (both in terms of per capita consumption and installed capac- ity) is the fact that Myanmar has a rich energy poten- tial for power generation, which includes substantial coal deposits, oil and natural gas, bio-fuel, as well as wind and solar energy (see Table 2). Of particular sig- nificance is Myanmar’s hydropower potential. With its territory encompassing four main river basins—the Ayeyarwaddy, Chindwin, Thanlwin (Salween), and Sittaung—its hydropower resources are estimated at more than 100,000 MW. In spite of this, less than 10 percent is currently being harnessed. As a result of these shortfalls, there are many new power plant pro-

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Table 2. Myanmar’s Energy Resources Table 3. Hydropower Resources in Myanmar by State Crude oil 648.59 MMBBL (Million and Capacity (offshore and onshore ) barrel ) ( proven and probable ) State/Region No. of Potentials Capacity (MW) Natural gas (off shore and on- 122.5391 TSCF (Trillion Std. >10MW shore) (proven and probable) Cubic Feet) ≤50 MW >50 MW

Hydropower 108,000 MW (Mega Watt ) 5 14 18,744.5 2 3 954.0 Coal 711 Million Metric Tons 1 8 7,064.0 2 4 2,830.0 Biomass Potential available an- 5 1 711.0 nual yield of wood-fuel up to 4 4 538.0 58.36 million cubic tons 2 3 359.0 3 6 1,555.0 18.56 million acres of lands 1 1 290.0 could generate residues, by 3 3 764.5 products or direct feed stocks Shan States for biomass energy East 1 3 719.8 South 3 5 7,569.5 209 million livestock could North - 5 4,000.0 generate animal waste for biogas >10 MW 32 60 46,099.30 <10MW 210 231.25 Wind 365.1 TWH per year (Terra Watt Hour/year) Total 302 46330.55

Solar power 51,973.8 TWH per year (Terra Watt Hour / year) Myanmar’s Electricity Sector

The Ministry of Electrical Power is the main body for Source: Ministry of Energy the electricity sector in Myanmar with the Ministry of Energy having responsibility for overall energy policy According to the 2012 Asian Development Bank En- and coordination. The Ministry of Electrical Power is ergy Sector Initial Assessment,2 Myanmar has 92 po- mainly concerned with the gas and hydropower sec- tential large hydropower projects with a total installed tor including power distribution. It consists of seven capacity of 46,101 MW. There are 36 hydropower pro- departments with its structure outlined in Figure Two jects that have been identified for future implementa- overleaf. tion, with a total installed capacity of 36,524 MW. As The current policy3 of the Ministry of Electrical of the end of 2011, however, only 753 MW of hydro- Power is outlined as follows: power power had been commissioned. Myanmar Elec- tric Power Enterprise has so far identified more than • To employ the available energy resources in 200 locations suitable for hydropower development, power generation to ensure the sufficient supply with a combined potential capacity of about 40,000 of electricity; MW. The table opposite illustrates Myanmar’s hydro- • To promote the effective and efficient use of elec- power potential by state. tricity for future energy sufficiency, reserves, and sustainability in Myanmar;

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Figure 2. MOEP Organogram

• Studying the alternative pro- duction of electric- ity by using waste products, for ex- ample rice husks, and firing boilers to generate electric- ity to meet local re- quirements instead of utilizing power from the national grid; • To reduce loss of electricity incurred from trans- mission and distri- • To safely ensure the reliable supply of energy; bution; • To enhance the electricity distribution system • In remote areas where electricity from hydro- to be developed in accordance with advanced power through the national grid cannot be utilized, technologies; the generation and distribution of electricity will be • To adopt environment-friendly ways in elec- performed by diesel generating sets and wind and tricity generation, transmission, and distribu- solar energy. tion; • To encourage the expansion of power transmi- In order to support the reform of the sector the gov- ssion and distribution throughout the country ernment recently established the National Energy and public-private participation in each sector; Management Committee.4 Similarly, a committee • In addition to constructing thermal power on the Rural Electrification and Water Supply has plants, construct more hydropower plants as a also been established and is chaired by the Union form of clean and renewable energy whilst Minister of Livestock, Fisheries, and Rural Devel- taking heed of Environmental and Social Im- opment.5 pact Assessments. Outdated Electricity Law and Other The Myanmar Electric Power Enterprise (MEPE), a Challenges state-owned enterprise under the Ministry of Elec- trical Power, is responsible for transmission, distrib- In spite of Myanmar’s power potential and ambi- uting electricity generated by the country’s major tious objectives outlined above, the country faces hydropower and gas turbine stations. MEPE’s ob- a number of obstacles. One of the challenges that jectives for the country’s development are as follows: Myanmar has faced is pursuing a proper devel- opment policy. Not only does the country suffer • Developing hydropower for base load and gas from a scarcity of qualified personnel, but also its turbines for peak load; legislative framework governing electricity laws is • Optimizing the use of natural gas in gas tur- outdated. The framework of existing law is mainly bines by implementing combined cycle pow- contained in the 1984 Electricity Law and the ac- er plants. companying 1985 Electricity Rules. • Expanding the national grid;

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This law is undermined by the fact that it is si- lent on the responsibilities of public institutions as KEY POINTS well as the licensing and approval process for invest- ments in the electricity sector. There has accordingly • Myanmar has the lowest electrification rate been a lack of concern attached to supporting explo- (26%) among the countries of ASEAN. In- ration and extending electrification to the rest of the creasing power generation is central to My- country, with the result that there has been a failure to anmar’s economic development and to allevi- implement rural electrification programs or establish ate rural poverty. an electricity regulator with internationally recognized • The existing national electrical power grid is best practices. The Government of Norway has sub- mainly confined to the central basin of the sequently provided a technical assistance grant to the country with the south and north of the Asian Development Bank to help Myanmar to update country in particular not connected to the its Electricity Law, including implementing rules and grid. regulations by the Ministry of Electrical Power, in con- • Myanmar has rich energy potential. Of par- junction with other stakeholders. This process is ex- ticular significance are its hydropower re- pected to take around 18 months with the completion sources which are estimated at over 100,000 target being June 2014.6 MW, of which less than 10 percent is cur- Another challenge is the well-rooted legacy of rently being harnessed. bureaucracy that serves to impede reforms. Electric- ity distribution and electrification also lack guidelines • The Myanmar Electrical Power Enterprise and frameworks for cohesive socio-economic devel- has identified more than 200 locations suit- opment, in particular relating to sustainable develop- able for hydropower development. Kachin ment and assuaging social conflict. It is clear too that State in the north of the country is site of the environmental implications of large-scale hydro- the largest potential with nearly 19,000 MW. power projects must also be taken into account. The However, could also incite tensions Myitsone project is an obvious example of the with ethnic minorities if not sustainably im- lack of attention paid to conducting proper Environ- plemented. mental and Social Impact Assessments. This is similar- • Modernizing Myanmar’s electricity sector is ly hampered by a lack of competition in the tendering impeded by a legacy of bureaucracy, a lack processes of large infrastructure projects in the energy of proper guidelines and frameworks, and a sector. Myanmar’s energy sector is largely influenced scarcity of qualified personnel. These are in by Chinese investment with a large amount of current urgent need of addressing if Myanmar is to hydropower drawn from Chinese-backed dams (see effectively harness its power generation po- Appendix 3 for current dam projects). tential. Conclusion and Recommendations • Implement a new Electricity Law for generation, The electricity sector and electrification has been transmission, and distribution; placed as a high priority on the Myanmar develop- • Seek best practices for electricity efficiency at the ment agenda. The government in particular prioritizes regional government level; the development of hydropower projects to increase • Extend electrification via the national grid and the installed capacity by utilizing its hydro resources as ensure integration with local electricity genera- much as possible. tion with equitable contribution of resourc- Harnessing its power potential to generate elec- es by the central and regional governments; tricity and judiciously reforming Myanmar’s electric- • Create a good investment climate for investment ity sector is therefore key to the country’s economic in the electricity sector; development. In so doing, the Myanmar government • Enhance the capacity of public service personnel should undertake as follows: and also rural communities through vocational

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training programs; Appendices • Ensure comprehensive and inclusive devel- opment promoting sustainable development and Appendix 1. Current National Grid System7 social harmony; • Promote off-grid electrification through renew- able energy technologies for rural electrification; • Promote and make incentives for small and med- ium-size electricity generation by local people.

References

23 22 24 1 25 President’s Office of the Republic of the -Un 8 26 27 ion of Myanmar, http://www.president-office. 4 29 4 28 30 31 gov.mm/en/?q=briefing-room/speeches-and-re- 33 32 56 6 11 35 3 5 marks/2011/05/20/id-203 34 58 59 36 40 2 60 38 39 37 Asian Development Bank, Myanmar Energy Sector 57 10 12 9 21 61 41 Assessment, http://www.adb.org/sites/default/files/ 2 62 42 43 myanmar-energy-sector-assessment.pdf 44 45 1 3 46 14 47 48 Ministry of Electricity, Presentation on “Present and 63 64 13 Future Power Sector Development in Myanmar”, htt- 7 49 ps://www.uschamber.com%2Fsites%2Fdefault%2Ff 55 50 51 18 19 65 52 16 iles%2Finternational%2Ffiles%2Fministry_electric_ 15 54 53 17 power_myanmar_2_27_13.ppt&ei=zKOYUvWzOuS 20 GywO2oIHQBQ&usg=AFQjCNE3bkpAWSIfr4Go Substation 4fn3y09MDJOgIQ&sig2=I3sSoiyq77L07yTkKRjM Gas Turbine vg&bvm=bv.57155469,d.bGQ&cad=rja (accessed in Hydro-power Station Steam Turbine Power Station November 25, 2013) 230 kV Transmission Line 4 Members of the committee include the Ministry of 132 kV Transmission Line Energy, Ministry of Electricity, Ministry of Agriculture 66 kV Transmission Line and Irrigation, Ministry of Environmental Conserva- 33 kV Transmission Line tion and Forestry, Ministry of Industry, Ministry of Mining, Ministry of National Planning and Economic Development, and Ministry of Science and Technol- Hydropower stations Gas Turbine stations ogy accompanied by two NGOs - Myanmar Engineer 1. Lawpita 168MW 11.Kyunchaung 54.3MW Society, Myanmar Renewable Energy Association. 2. BHP(1) 28 MW 12. Mann 36.9 MW 5 This Committee includes members from the Min- 3. Kinda 56 MW 13. Myanaung 34.7 MW istry of Livestock, Fisheries and Rural Development, 4. Sedawgyi 25 MW 14. Shwedaung 55.3MW Ministry of Cooperatives, Ministry of Agriculture and 5. Zawgyi(1) 18 MW 15. Ywama 36.9 MW Irrigation, Ministry of Environmental Conservation 6. Zawgyi(2) 12 MW 16. Thaketa 57 MW and Forestry, Ministry of Electricity, Ministry of In- 7. Zaungtu 20 MW 17. Ahlone 99 MW dustry and Ministry of Construction. 8. Thaphanseik 30 MW 18. Hlawga 99 MW 6 Editor’s note: this text was written prior to the ex- 9. Paunglaung 280 MW Substations pected completion target. 10.Mone 75 MW Nos. 22-65 7 Ministry of Electrical Power, Presentation on “Pre- sent & Future Power Sector Development in Myan- mar” on February 27, 2013. 8 Ibid.

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Appendix 2. Power Plants under Construction 2013-2016 (MW)8

Appendix 3. 20 Large Chinese-Backed

DAMS RIVER STATE Lower Paunglung Paunglaung Mandalay / DIVI- River Div. SION Myitsone Ayeyarwad- Kachin Upper Paunglaung dy River State Paunglaung River Chibwe, Pashin, N’Mai Kachin Lakin, & Phizaw River State Dapein 1 & 2 Tarping Kachin Laiza & Khaung- Mali River Kachin River State lanphu State TOTAL MEGA- 34,440 Shweli 1, 2, & 3 Shweli Shan State WATTS: River Tasang & Upper Salween Shan State Thanlwin River Hatgyi, Weigyi, & Salween Karen Dagwin River State Yeywa Myitnge Mandalay River Div.

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