Private sector encouraged to help strengthen power generation

Private sector encouraged to help strengthen power generation

Officials from the Ministry of Electricity and Energy have said that there
are long-term and short-term projects planned in order to meet growing
electricity demand in the country.

Myanmar's demand for electricity has increased annually, but power supply
has been insufficient. 6.5 million out of 10 million households have no
access to electricity, and barely 3.5 million has received standard
electrical supplies. Although electricity consumption has skyrocketed by
over 100 percent, there are still cities with little to no electricity. For
the next three to four years, more than 4500MW of electricity are estimated
to be consumed, and usage for this summer could increase by 3300MW or
3500MW, said Dr Tun Naing, deputy minister of the Ministry of Electricity
and Energy.

"We have to increase generating electricity to about 500MW annually and
integrate that into the national grid. That amount of input has to be
increased every year," he said.

From 2015 to 2019, there are plans to link energy to 1.7 million households,
and to supply eletricity to about 66pc of the total households by the year
2030 - which would require an estimated budget of US$5.8 billion.
Additionally, there will be power stations to be expanded with the national
budget, and also a five-year plan to power new villages by buying
transformers and connecting 11kV power lines with a $310 million loan from
the World Bank.

However, not all regions and states have access to the national grid. The
Asian Development Bank had estimated that in order to power the whole
country in 2030-2031, about 1500MW would be needed and that it would require
a budget between $39 million and $47 billion.

Former deputy minister for electrical power U Aung Than Oo stated that from
1960 to 2015, Myanmar had produced a total of 5011.272MW from hydroelectric
and thermoelectric generators. About 90MW were accumulated annually in
addition to the total energy produced, but the nation's demand for
additional energy was between 400MW and 800MW annually.

More power stations have to be constructed, and natural gas should be an
alternative source of energy supply. Liquefied natural gas (LNG) should be
used to produce energy if the current source, natural gases, are depleted,
the former deputy minister added.

He also urged that there should be plans to galvanise public opinion on
using coal power. Other plans signed in the memoranda of agreements, or
MoAs, include plans to initiate three solar projects, reviewing the price
charges of wind energy and other power-generating services, having private
sectors contribute in reforming the utilities, enhancing long-term
operational capacity, and the maintenance of state-owned power stations.
There is also an emphasis on hydroelectric projects in order to reduce
environmental damage and pollution.

Long-term and short-terms plans are fundamental to complement each other in
order to meet energy demand, and troubles will arise if the current model of
generating power is not changed. For such actions to occur there should be a
public-private partnership (PPP) model established by the government and the
private sector, a mandatory long-term plan that reviews electricity-related
laws and update the legislations. Such laws and regulations should be
amended and repealed by the Hluttaw, said Daw Nilar Kyaw, regional minister
for transportation, infrastructure and electricity for Yangon Region.

She added that, as foreign investments flow into the country and as national
industries develop, so does the national electricity demand. The energy
sector should consider importing oil from outside Myanmar. International
firms should be encouraged to invest in the energy sector and import oil
from abroad.

The energy sector is essential for the national economy. Efforts should be
made to resolve the issue of system breakdowns, which disrupt operations and
daily lives of the public.

In order to minimise environmental risks, construction of power stations
should not be rushed. Currently, the government has proved unable to supply
power to the public and industries sufficiently. Thus, investments are vital
to generate an additional 500MW annually to meet the national demand and to
install high-voltage power transmissions, said Dr Tun Naing.

He continued that hydroelectric, natural gas and coal should be used to
generate electricity. Power stations must be operational within 10 years;
otherwise, the energy situation will become rather grim.

In terms of state finance, there will be difficulties. Finances have not
been sufficient to fund the completion of hydroelectric station in time,
said U Aung Than Oo.

Expanding electric grids and sub-electrical power stations is essential, but
there are fiscal challenges, and investments are inadequate in this sector.
New demands for power cannot fulfil the demands of rising industrial zones,
he said.

The underlying problem is that factories do not have enough gas to generate
power using diesel at peak consumption hours.

A short-term solution would be using local electricity generated from Shwe
Li 1, Tar Bein 1 and Chi Phway Nge power stations. These three stations can
generate 939MW. There are too few power grids and power stations. If all
procedures are completed, Myanmar does not need to build more stations
within these two years, and energy production can increase by 150MW in
summer, according to U Maw Thar Htwe, former deputy minister for electric
power.

He added that Myanmar can purchase electricity from Laos and China when
necessary. During the summer of 2016, system breakdown happened once every
five days due to operational overloading.

"Overloading is too dangerous," he said.

Overloading results in system breakdowns, and hence is not conducive to
achieving stable power production in stations. Developments and system
improvements should focus in Yangon Region since the region accounts for
more than 50pc of the national electricity consumption.

"Thar Bway 1 and Shwe Li 1 were made with [companies from] foreign countries
. If all grids are made, megawatts can increase for two years . if the plans
are being continuously performed.

"There are two projects that have still not started [but] they can be
completed in five years . I think we can reduce one percent of electric
power wastage yearly," said U Maw Thar Htwe.

The ratio of revenue to expenditure for the electricity sector is
unbalanced. The state paid K470 billion for Yangon Region in the last fiscal
year and K900 billion could be consumed by Yangon Region in the coming
fiscal year, said Daw Nilar Kyaw.

"If this kind of situation is ongoing . more money will be lost ... it is
very important to have transparency [for energy projects] for the public,"
she said.

The solution for the tripled electricity charge should be to discuss
different strategies based on sound reasons and accurate numbers. Any
conclusion should be based on facts, she said.

The expenditure for generating hydroelectric power is K71.5 and distribution
expenditure is K89 per unit. In contrast, for natural gas, production
expenditure is K143 and distribution expenditure is K178 per unit.

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Link to Original Article:
http://www.mmtimes.com/index.php/business/25232-private-sector-encouraged-to
-help-strengthen-power-generation.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com