Gasifier Powered Mini-Grid in Myanmar: A Successful Public-Private Partnership driven by Private Investments

Gasifier Powered Mini-Grid in Myanmar: A Successful Public-Private
Partnership driven by Private Investments

I had heard a lot about the entrepreneurs in Myanmar who develop and operate
renewable energy mini-grids from several experts including Dipti Vaghela who
coordinates Hydro Empowerment Network (HPNet), that I jumped at the
opportunity offered by U Aung Mynt General Secretary of Renewable Energy
Association of Myanmar (REAM) to join the REAM team on a visit to the
village of Hlaing Phone in the Ayeyarwady delta. The trip to Hlaing Phone in
February 2017 wasn't easy we had to drive 5 hours each way with the final
stretch through unpaved roads and the read trip was followed by a 45 min
long tail boat ride through the Ayeyarwady. The journey through the rice
fields, fish farms, the labyrinth of local waterways and the local rural
life was so interesting that we did not realise the time spent on
travelling. It also puts into perspective how remote some of Myanmar's
villages and how difficult access is.

Hlaing Phone is an agricultural and fishing village with over 250 households
and a market which is being powered by a 250 kW biomass gasifier using risk
husk as fuel, since the last two years. The gasifier was indigenously
designed and developed by Soe Ting Aung of Royal Htoo Linn (RHL) who have
already installed close to 800 gasifiers all over Myanmar including 145
village electrification systems. These gasifiers also address a major
environmental problem as the risk husk from rice mills is often dumped into
local rivulets and waterways causing significant damage to the local aquatic
ecosystem. Gasifiers using rice husk from mills can convert this
agro-residue to energy. While a number of local manufacturers of gasifier
exist, many technologies struggle to manage and clean the coal tar from the
producer gas resulting in frequent cleaning and replacement of gasifier and
engine components and direct discharge to waterways. The gasifier installed,
owned and operated by RHL consists of a multi-stage coal-tar cleaning using
water sprays and biomass and the water for spray cleaning is also
recirculated using a system of 3 settling tanks. The system also provides
employment to 5 people from the village who are involved in fuel management,
operating the gasifier, managing the electrical network and tariff
collection.

There is an electricity committee at Hlaing Phone which supports the RHL
team in managing the system. Of 250 households in the village 200 are
already connected to the electrical mini-grid, with the remaining households
continuing to use their solar home systems or unable to afford about $ 30
required for purchasing the meter and carry out internal wiring. A previous
gasifier based system is defunct now. The electricity supply is much more
reliable currently with the current system without voltage and frequency
variations which in the past have resulted in damages to electrical
equipment. The electricity consumption is metered and collected on a monthly
basis by RHL with an average monthly household level consumption of about 40
Kwh with the major applications being lighting, television and radios, rice
cookers. Some households also have refrigerators, air conditioners, washing
machines etc. The electric supply is for 17 hrs daily from 6 AM to 11 with
an average monthly household expenditure on electricity being $ 18/month.
This is primarily because, the local electricity tariff is rather high at $
0.44/kWh however there was a complete willingness to pay these higher
tariffs for electricity which was reliable and of better quality.

Once we left the village hall and the electricity committee, we could see
electricity making a significant difference at homes and at the village
market place.

Shops are able to increase sales of beverages through refrigeration and
women owned cloth shops able to make embroidered Longyis using electric
sewing machines increasing incomes. Homemakers seemed very happy with the
reliable electricity and use electric rice cookers and electric frying pans
and reiterated that the higher tariff was not a problem compared to the
convenience of electrical appliances. Some households also use refrigerators
and washing machines all of which seemed to benefit women significantly. The
most significant aspect of the mini-grid was that it was completely financed
by the community and the private enterprise, and operated in the absence of
government support and regulatory oversight. There were no international
collaborators involved and a clear case of a locally developed appropriate
technology operating in a decentralised and geographically remote location
with private investments and private operation in partnership with a happy
and satisfied community. I understand from U Aung Mynt and Dipti that there
are 1000s of such local mini-grids all over Myanmar which follows similar
financing and business model using hydro and biomass gasification
technologies.

The following week, I was in Nay Phi Taw, the capital of Myanmar and a very
different setting to Hlaing Phone where I had the privilege of listening to
several global key experts convened by the World Bank on financing,
business, policy, regulatory and technology aspects of mini-grids, discuss
global best practices. I was impressed by the level and range of experience
in the space and was pleased to understand the commitment and resources
being offered by development agencies to help Myanmar achieve universal
electrification by 2030. With the right approach and an orderly development,
Myanmar should be able to provide reliable and affordable energy to all of
its population leveraging the existing technology, finance and business
ecosystem which currently exists in the country in the mini-grid space. My
thoughts on some of the aspects to consider in a future accelerated
electrification drive in Myanmar could be:

Existing mini-grids and mini-grid operators as well as the support ecosystem
should be leveraged in electrification plans and efforts should build on
existing private sector led electrification experience. You have a unique
opportunity to have a bottom-up model of rural electrification in Myanmar;

While relatively difficult to implement in Myanmar, financing should be
based on cost-recovery principles and should incentivise electricity
generation business models than subsidise capital expenditure of future
mini-grid and off-grid systems. This is important as large offerings of
subsidies may encourage traders to benefit more than the private sector,
communities and financiers;

There is a need for cross-subsidy mechanisms or incentive mechanisms to
moderate the high cost of generated electricity in decentralised mini-grids
as well as finance the initial cost of initial electricity access. There is
scope for energy policy and regulation to play a facilitating role here;

There is a need for an independent regulatory agency which will be able to
regulate the electricity sector including grid extensions, mini-grids and
off-grid electrification with the objectives of affordability, quality and
safety. There are a number of sustainable energy regulatory instruments,
toolkits and examples to help underline the importance of the role of
independent infrastructure regulation in delivering quality and affordable
services to consumers;

The rural electrification framework could be technology neutral and could
allow private sector and public-private partnerships to choose technology
options for electrification based on levelised cost of electricity supply.
All options including renewables, fossil fuels, hybrid systems and grid
extensions should preferably be considered in the technology mix;

An integrated approach that covers both thermal and electrical energy where
cooking and cooling energy needs in Myanmar are simultaneously addressed by
the mini-grid enterprise or distribution operator through electrical
appliances or cleaner fuels such as Liquefied Petroleum Gas (LPG) is likely
to address rural energy access and indoor air pollution effectively while
increasing the viability of the electricity business;

A robust framework for quality control and testing should be placed on
electricity conversion systems and electrical network equipment to ensure
superior technical performance and avoid manufacture, import and use to
inferior equipment. Consideration should also be given towards and appliance
energy efficiency and labelling scheme that covers key electrical
appliances;

I am sure that many of these aspects are already being considered by the
Myanmar government and other key stakeholders in planning and implementing
rural energy efforts. I hope to remotely follow these developments and to
return some day to find more Hlaing Phones where electrification is done on
a PPP mode within a progressive policy and regulatory framework.

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Link to Original Article:
https://sustainableenergyassociates.wordpress.com/2017/03/01/gasifier-powere
d-mini-grid-in-myanmar-a-successful-public-private-partnership-driven-by-pri
vate-investments/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com