Achieving Burma’s Energy Goal Will Be ‘Very Tough’: Report

By William Boot 11 July 2014

Burma faces a “very tough task” to achieve the Ministry of Electric Power’s ambition to develop a modern national energy infrastructure in the next 15 years, an industry report said.

The ministry has outlined plans to increase Burma’s power-generating capacity to nearly 25,000 megawatts by 2030. At present, the national capacity is only 4,360 megawatts—barely one third of the capacity of tiny Singapore, which has a population of 5.3 million.

“Asia’s new economic frontier Myanmar, seeking to attract tens of billions of dollars in investment, is also one of the darkest places in the world with an electricity capacity which reaches only one in five of the estimated 60 million population,” said Asia Power Monitor, an international energy industry weekly newspaper.

“The Ministry of Energy has outlined vague plans for 40 power projects across the country to achieve the 2030 generating target—which is less than neighboring Thailand’s today with a similar population,” it said this week.

“Myanmar faces a very tough task in reaching its 2030 electricity goal without a huge injection of financial largesse from traditional donor countries like Japan and the string-attached loans of others, like China.”

Last December, the Asian Development Bank provided a loan of US$60 million to help pay for grid infrastructure repair and refurbishment, and the World Bank has provided $140 million in credit to finance refurbishment of a 106 megawatt gas-fueled plant in southern Burma’s Mon State.

The ministry has acknowledged that up to 20 percent of power generated is lost in transmission through decrepit equipment.

Even in the most populated Rangoon-Mandalay corridor, where much of the existing dilapidated transmission grid is installed, blackouts and restrictions are frequent, forcing thousands of businesses and factories to use back-up diesel generators. Large swathes of the country have no access to mains electricity and have to rely on age-old natural resources for energy.

“Traditional biomass and waste consisting of wood, charcoal, manure, and crop residues is widely utilized and accounts for about two-thirds of Burma’s primary energy consumption,” said a June report by the US Energy Information Administration.

“Such a poor level and standard of electricity is hampering efforts by government departments to attract big-name, big-ticket investors into the country,” said the Asia Power Monitor report. “A number of large foreign companies—from Japan to Indonesia—have voiced interest in investing in Myanmar, but after assessing prospects many have fallen silent.

“Beyond Myanmar’s traditional backer, China, and the generosity of Japan, it’s hard to see where the investment will come from to build capacity—and a new grid transmission infrastructure,” the report said.

The Ministry of Energy proposes a mix of energy resources, including coal and gas and renewable systems, but still with a considerable emphasis on hydropower dams, which are very unpopular in the country because of land losses and population relocation.

The ministry suggests that 37 percent of the 25,000 MW would come from hydropower, 20 percent would be fueled by natural gas, 33 percent by coal and the remainder from renewable energy sources.

At present, about 70 percent of Burma’s power is generated by river-based hydroelectric turbine systems. There are plans to build more such systems which would add 10,000 MW of capacity.

Work on one massive hydroelectric project with a capacity of 6,000 megawatts, at Myitsone on the Irrawaddy River, which feeds a large rice-growing delta, has been suspended by the President Thein Sein, at least until the end of his term in 2015.

The Myitsone project, in northern Kachin State, was commissioned by the last military regime in a secret deal with Chinese state-owned China Power Investment Corporation (CPIC), in which about 80 percent of the electricity would be transmitted out of the country to China’s Yunnan Province.

Similar large hydropower dams proposed for the Salween River in eastern Burma involve Thai firms who want to pump most of the electricity generated into Thailand.

“CPIC continues to press for a resumption of the Myitsone project, having already spent millions of dollars in land clearance, but in a more liberal environment after the military era vocal public opposition grows,” said Asia Power Monitor.

“The Naypyidaw government has already signaled that much more of the country’s future energy resource production, notably offshore natural gas, must be retained to fuel domestic economic revival, but it must also be careful not to offend China, one of its biggest backers. China has bought virtually all the 50 billion cubic meters of gas due to be pumped out of the Shwe field in the Bay of Bengal, and Thailand buys most of the gas from two other productive offshore fields.”

A recent study by London-based analysts Business Monitor International (BMI) concluded that much future investment in Burma is “significantly dependent” on the successful completion and smooth operation of the Thilawa Special Economic Zone.

Burma is suffering from a “severe deficit in infrastructure,” BMI said, and many overseas businesses are waiting to see how successful the Thilawa project turns out to be.

So far, the Burmese government has opted for quick-fix power boosts in the form of rented mobile units, such the 100-MW temporary gas-fueled power plant installed in the Mandalay region in June by APR Energy of Florida. The APR contract to supply electricity is for two years only, after which the equipment will be dismantled unless the contract is renewed.

A similar temporary boost to electricity supply is now planned for Kyaukphyu—the site of another planned special economic zone—where the government has just invited bids to supply a 50-MW gas-fueled mobile plant.