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.
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