US has opportunity to solve Myanmar's energy dilemma (Opinion)

US has opportunity to solve Myanmar's energy dilemma (Opinion)

Unable to meet soaring domestic demand for energy, Myanmar's government is
said to have entered preliminary discussions over a deal to buy electricity
from China. At the beginning of this month, sources close to the talks told
Reuters that three state-owned Chinese companies had submitted proposals
outlining how they could help Myanmar fill its widening energy gap, which
regularly results in extended blackouts.

The plan is to plug the country into the electricity network that powers
Yunnan, a province in southwestern China. But while any such deal could
temporarily solve Myanmar's energy crisis, it would also amount to a major
surrender of sovereignty.

Indeed, while many Myanmar residents would undoubtedly welcome a deal
resulting in a reliable supply of electricity reaching their homes and
businesses, the talks raise serious concerns over China's growing economic
influence.

Officials are also wary of extending China's power in the region, noting
that Beijing has already pushed for access to the strategic deep-sea port of
Kyaukpyu in southern Myanmar as part of the One Belt, One Road program.

But what if there's a better way than jumping into bed with Beijing?

A country in the dark

Only 32% of Myanmar's 53-million-strong population has access to
electricity, and even those who do have power only register annual
consumptions of 156 kilowatt-hours on average (compared with 3,900kWh for
China and 13,000kWh for the US).

Like most of its neighbors, Myanmar's government has zeroed in on coal as
the most efficient way to address the energy shortfall. Last month,
Naypyidaw unveiled plans to build a new US$3 billion coal-fired power plant
in the eastern state of Kayin. This plan backfired, as a coalition of
activist groups called for the planned plant to be scrapped in favor of
developing renewables.

While it is true that Myanmar has much untapped hydropower potential,
building dams and managing water throughout the Mekong region is a
protracted and immensely complicated task that will require years to resolve
- and involve important concessions to Beijing. As for solar and wind, they
continue to be simply too expensive to deploy at the scale necessary to
power the whole country.

With Myanmar's demand for electricity rising by 13% every year, the
government is quickly running out of time. In the words of Win Htein, one of
the top leaders of the National League for Democracy, "If we have to choose
between the dilemma of coal and the development of the country, we
prioritize the development."

Enter the US

Ironically, Myanmar's particular quandary makes a strong case for the Donald
Trump administration's polemical decision to demand that Washington finance
"clean coal" projects in developing countries. Removing barriers to the
funding of coal projects launched by emerging economies would allow the US
to sell more of its coal to developing countries - and build much-needed
strategic bridges in regions such as Southeast Asia.

What's more, Japan - which is Myanmar's largest supplier of official
development assistance - has also jumped into the mix and has offered to
help the country build clean-coal plants.

Even if in some Washington quarters coal is frowned upon, a realist approach
to the challenges facing developing countries like Myanmar shows that the
fuel is still the most effective way to meet their energy needs. That
energy-poor Myanmar is now building bridges with a major US rival over its
need to increase electricity access serves as a stark reminder of that
reality.

While Trump's Asia policy is a flaming train wreck - toying with striking
North Korea, scrapping the Trans-Pacific Partnership, raising doubts about
Washington's commitment to regional security, endangering strategic
alliances, threatening shortsighted trade wars - on energy his
administration might be on to something. Indeed, seen from a Southeast Asian
vantage point, the Trump administration's announcement to use the so-called
Green Climate Fund to provide developing countries with the funds for
utilizing coal could act as a major diplomatic driver.

The story goes back to a 2013 World Bank decision to ban the financing of
coal power plants, which was encouraged by the administration of US
president Barack Obama. While the thinking behind it was that renewables
would gain ground, the decision didn't factor in the fact that for many
developing countries solar and wind are too expensive and unreliable to be
taken into account.

Since Southeast Asia is not just a developing economy but an export
juggernaut, electricity prices are of major concern for energy-intensive
industries that would have a hard time accommodating higher renewable
prices. This explains why, despite having signed the Paris climate deal,
Indonesia, India, Japan, Malaysia, the Philippines, South Korea, Thailand,
Taiwan and Vietnam are all planning either to upgrade their coal power
plants or to build new ones.

To varying degrees, these countries are compelled by booming populations,
low rates of access to electricity and political pressures to take concrete
action. Shunned by Western constraints, many have turned to Beijing for coal
technology - but, as Pakistan found out, Chinese-financed coal plants are
being built using severely outdated technology.

And this is where Trump's energy plans come in: His administration is trying
to boost the export of US clean-coal technology - such as supercritical and
ultra-supercritical plants - that could be an avenue to counter China's
dominance again.

Next, Washington is seeking to reverse the World Bank's course by using its
voting power to push for international banks to open funds for the promotion
of carbon-based energy plants abroad.

Not only would countries such as Myanmar benefit from an alternative
financing channel to the China-controlled Asian Infrastructure Investment
Bank - and its $250 billion war chest for infrastructure projects - US
technology is more advanced than what Beijing has on offer.

China has understood that the best way to patch relations with its Southeast
Asian neighbors is by providing assistance that the West won't - and
building coal power plants ranks close to the top of the list. The Trump
administration's bid to loosen World Bank financing conditions for fossil
fuels would deal a major blow to Beijing, and could restore some of
Washington's clout in the region.

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Link to Original Article:
http://www.atimes.com/us-opportunity-solve-myanmars-energy-dilemma/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com