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Myanmar Energy Sector Assessment, Strategy, and Road Map
This sector assessment, strategy, and road map
documents the Asian Development Bank’s (ADB) current assessment and
strategic investment priorities of the Government of Myanmar in the...
...
Myanmar’s Energy Sector: An Overview
by Alissa Nicole Thompson
Abstract
Myanmar
is straddling a new national development plan. Since the new civilian
government took office in 2011, reforms were necessary after the changes
resulting from the sanctions previously imposed on the country. Energy
will undoubtedly play a role Myanmar’s growth, and the country is
expected to receive significant amounts of foreign direct investment to
jumpstart the economy. Using energy as a strategy to emerge from
isolation, Myanmar is striving to take advantage of new technologies and
foreign investments, in order to reach its developmental goals under
the new government. This paper looks at plans for improving living
standards by promoting the wider use of renewables, increasing energy
efficiency and conservation, and promoting the use of alternative fuels
in household use to meet energy demand predictions. The findings of the
various implemented measures show stagnation. The paper concludes that
the government must first make internal adjustments to enable effective
policies and achieve their goals.
Key words: Myanmar; economic development; biomass; renewable energy; solar; hydro; wind.
Myanmar, after a static
period of isolation and with sanctions in place since the late 1980ies,
is undergoing a serious transition. The country’s new civilian
government took office in March 2011 with a goal of integrating into the
modern world through economic development. The new national development
plan has a goal to implement positive changes.
However, this comes with
no easy formula. In 2012, Myanmar was ranked 161 out of 180 in the
International Monetary Fund’s listing of the poorest countries, and was
ranked 149 out of 187 in the United Nation’s Human Development Index.[1] This reflects the poor standard of living amongst the population of 53 million, the fifth most populous country in ASEAN.
As a result, we find a
country trying to overcome their domestic energy deficiency while taking
advantage of foreign investment, the majority of which is funneled to
the energy sector.
Myanmar’s Energy: Assets and Challenges
Considered by many to be
the ‘last frontier’, Myanmar has great potential to develop into a
relatively important country within the region. From its reputation as a
pariah state through Ne Win, the country isolated itself from
energy-intensive globalization, as the outside world was withdrawn from
access due to U.S.-led sanctions, giving way to a xenophobic government
that formed a special friendship with China due to their mutual offenses
during the violence of protests in Myanmar and the Tian’anmen Square
protests a year later.
Today, under Thein Sein’s
leadership, seen as a transitioning bridge between the military and
civilian government, the country has regained a certain degree of
respectability amongst its neighbours, evident during the 2014 ASEAN
Regional Forum in Nay Pyi Taw, as well as with the United States, when
in 2011, Hillary Clinton become the first U.S. Secretary of State to
visit in over 50 years, and in 2012, Barack Obama became the first
sitting president to visit Myanmar. Likewise, Thein Sein was received in
Washing- ton, D.C., the following year.
Additionally, this
reformation period is seen in Myanmar’s foreign relations. Even though
the Shwe project, exporting Myanmar oil and gas to China, was completed,
China cut direct investments in the country by 90% from 2011 to 2012.[2]
The renewed interest in Myanmar was evident in the U.S., when Derek
Mitchell became the first U.S. appointed ambassador to Myanmar in over
20 years. This has lead from previous loophole sanctions in the energy
sector, enabling international companies such as Chevron and Total to
continue business, in addition to regional companies such as PTTEP,
Petronas and Daewoo to have dominance in the field, to total legitimate
development, opening a portal of opportunity for foreign investments.
Myanmar understands energy will be an inevitable element of the
expansion of their economy.
Figure 1. Energy use (2011)
Source: World Bank.
Figure 2. Energy use (2011, kg of oil equivalent per capita)
Source: World Bank.
The exploitation of natural resource deposits are
the cornerstone of development of Myanmar. The official estimates are
humble, at 50 million barrels of oil and 8 billion cubic meters (bcm),
according to the Economist.[3]
Nevertheless, it is the unofficial estimates and great potential
for
new reserve discoveries that secure new investments.
In terms of energy consumption,
Myanmar is a relatively small player – comparable with Sri Lanka, Nepal
and Bangladesh (Figure 1). Per capita energy use in Myanmar is lower
than Sri Lanka, Nepal, Cambodia, Philippines, and is comparable with
Bangladesh (Figure 2). Myanmar especially appears underdeveloped in
terms of energy use and energy access in comparison with Thailand and
Indonesia – its two neighbours, who together consume 58% of ASEAN’s
energy.
Myanmar’s total primary energy mix,
according to the IEA
in 2013 (Figure 3), presents a rudimentary image.
The majority at 65.3% is from traditional biofuels and waste; 90% of
this is fuel wood, an issue that promotes deforestation and continued
illegal timber trade. This is a very high share, especially in
comparison with both Thailand’s and Indonesia’s share of biofuels and
waste in their fuel mixes. The oil share comes in second at 16.8% of
total primary energy mix. Domestically produced natural gas contributes
to a 11.1% share in the fuel mix. Much of this is transformed into
electricity, of which 60% goes to gasfired power plants, specifically
towards the industry, transport, and chemical/petrochemical sectors (12%
for fertilizer production). Hydropower is modest at 4.6%, contributing
2,520 MW. This is a particular feature of Myanmar’s natural renewable
energy availability, as both Thailand and Indonesia have very low shares
of hydro. The least of all
the shares is coal at 2.2%. Myanmar
typically uses lignite and other bituminous coal for electricity
generation and the industry sector.
Exports and imports of energy resources. Myanmar
imports refined sources such as motor gasoline, jet kerosene and diesel
to be consumed within the industry, transport,
and agricultural
sectors.
The majority of Myanmar’s
natural gas is exported, Myanmar has been providing natural gas to
Thailand since 1998 from the Yadana gas field, eventually expanding
to
the Yetagun gas field in 2000, then the Zawtika gas field that commenced
production in 2014. This natural gas, which is the 2nd largest share after oil, accounts for 53% of the 28.4% of Thailand’s share of total primary energy supplies in 2013.[4]
Figure 3. 2013 Myanmar total primary energy mix
Source: IEA.
Figure 4. 2013 Thailand total primary energy mix
Source: IEA.
Figure 5. 2013 Indonesia total primary energy mix
Source: IEA.
Overall, there is a great need to (1) improve the
domestic energy mix and (2) develop the infrastructure. The energy grid
concentrated in urban areas allowed 26% of the population connection and
is unbeneficial to the 70% living in rural areas, where average
electrification rates are 16%.
Current Energy Initiatives
Energy is a significant element within Myanmar’s
national development plan. The interest of fulfilling their energy
potential both locally and in trade is in line with in Myanmar’s new
energy policy goals.[5]
The new civilian government, motivated by potential of the energy
sector to become a catalyst for Myanmar’s economy expansion, finally
integrated the nation’s energy sub-sectors under one umbrella. In doing
so, they have formed new committees for the main purpose of increasing
coordination: the National Energy Management Committee (NEMC) is tasked
to formulate energy policies and arranges cooperation between energy
ministers, while the Energy Development Committee (EDC) will implement
these policies.
The overall goals of Myanmar’s energy policy, according to the Asian Development Bank’s Initial Energy Sector Assessment,[6] center on:
- Maintaining energy independence;
- Promoting wider use of renewable sources of energy;
- Promoting household use of alternative fuels;
- Promoting energy efficiency and conservation.
It seems that the ultimate goal of maintaining energy
independence is to be achieved through the aforementioned three
supportive goals. This is the basis of the structuring of this section,
where the goals of Myanmar’s energy policy will be evaluated in the
current measures the government is implementing to achieve these goals,
to lead to the overall concluding goal of whether maintaining energy
independence is feasible.
Promoting wider use of renewables. Renewable
sources
of energy are currently key in two dimensions of Myanmar’s
energy system: their role in electricity generation (and improvement of
access to electricity), as well as in direct final use. Direct final use
is a massive segment – wood
and waste are used in the residential
sector for heating and cooking. Consumption of primary solid biofuels,
based on gross calorific value, is close to the volume of natural gas
production of the country (453107 versus 483794 TJ respectively). This
segment will be discussed in the next section, while here I will focus
on the power generation sector.
Myanmar’s current level of electricity production,
according to the IEA statistics, is at 11,890 GWh, and 8878 GWh is
provided by the hydropower sector. On the one hand, renewable energy (in
the form of hydro) is a major share pf electricity generation mix
(Figure 6); on the other, it is the only renewable energy source that is
actually used in the country’s electricity generation (Table 1).
Figure 6. Myanmar electricity production
Source: International Energy Agency, (2013), Myanmar: Electricity and Heat for 2013. Available at: https://www.iea.org/statistics/statistics-search/report/?year=2013&country=Myanmar&product=ElectricityandHeat [Accessed 1 December 2015].
Gross electricity generation (GWh)
|
|
Municipal waste
|
0
|
Industrial waste
|
0
|
Primary solid biofuels
|
0
|
Biogases
|
0
|
Liquid biofuels
|
0
|
Geothermal
|
0
|
Solar thermal
|
0
|
Hydro
|
8878
|
Solar PV
|
0
|
Tide, wave, ocean
|
0
|
Wind
|
0
|
Table 1. Electricity generation in Myanmar from renewable energy sources, 2013, GWh
Source: International Energy Agency, (2013). Myanmar: Renewables and Waste for 2013. [online] Available at: https://www.iea.org/statistics/statisticssearch/report/?year=2013&country=Myanmar&product=RenewablesandWaste [Accessed 1 December 2015].
Overall, to ensure
sustainable and environmentally clean energy development in the long
term, Myanmar seems
to be focusing on long-term growth through the
usage
of renewable sources of energy, rather than short-term
electrification through hydrocarbon resources. Myanmar possesses the
resources to develop renewables, such as hydro, tidal, wind and solar,
making renewables in general a feasible option for the development of
the energy system.
Renewables, among other things, can assist in
solving
a problem of access to electricity and electrification.
Currently, for local consumers, connections to energy grids nationwide
start at 595 USD, leaving many villages without access to electricity.[7] To counter purchasing connections, renewables can be used within the small-scale systems (‘distributed generation’).
Hydropower is a
major source of energy for Myanmar, but there are two major factors
impeding its expansion. Firstly, during the dry season, the amount of
hydropower generated decreases drastically. As it is unpredictable,
sometimes it is reduced to nothing. Secondly, hydropower projects are
unpopular nationwide due to the forced relocation of villagers, as well
as the environmental degradation it could bring through erosion and
unnatural flooding of previously dry areas.
A viable source of energy in Myanmar is tidal energy
in
coastal areas: the tide rises and falls twice a day,
and powerful water
currents reaching up to eight knots. The schedule of the tides is
reliable and predictable.
Another type of renewable energy that follows from Myanmar’s large coastal areas is wind energy.
With a coastal strip of 2,832 kilometres and southwesterly wind for
nine months and northeasterly wind for three months available, the wind
energy in Myanmar has a potential of 365 terra-watt hours (TWH) per
year.[8]
Three areas stand out as promising for wind harnessing: the regions of
Chin and Shan states, southern and western coastal regions, and central
Myanmar.
Solar power is at
early stages of its development in Myanmar as well. Solar power within
Myanmar has a poten
tial of providing 51,973 TWH per year.[9]
At the moment, solar power is harnessed through photovoltaic cells used
for battery-charging stations and water pumping for irrigation. One
challenge solar development faces is the lack of trust for this
technology by villagers, due to the prevalence of low-quality solar
products, which has led to poor experience. Currently solar stand-alone
systems have been installed at more than 200 places nationwide.
Project
|
Capacity
|
Companies involved
|
Notes
|
Chaung Thar Hybrid Power Supply System Project
|
Includes 40 kW wind power system
|
Japan’s Fuji Heavy Industries Ltd
|
Hybrid system
· Street lighting for a safer environment
· Night lighting to increase productivity of the village
· Clinic lighting to allow more power for medical equipment usage and vaccine refrigeration
|
Wind power plant in Mon State
|
32 MW
|
Zeya & Associates Co., Ltd., Vestas Wind Systems
|
Wind system
|
Magway region
|
Up to 220 MW
|
Black & Veatch
|
Solar system
Will supply electricity for local communities and
industry, and the construction is scheduled to start in 2016.
Southeast’s Asia’s largest solar power plant
|
Table 2. Summary of selected renewable energy projects in Myanmar
Source: Asia Biomass Office, 2015. Current Status of Wind Power in Myanmar. [online] Available at: https://www.asiabiomass.jp/english/topics/1509_05.html [Accessed
1 December 2015]; Zeya & Associates, 2015. ZEYA & ASSOCIATES
SIGNS MOU WITH VESTAS
FOR COLLABORATION ON WIND POWER PROJECTS IN
MYANMAR [online]
Available at: http://www.rgkzna.com/content/zeya-associates-signs-mou-vestas-collaboration-wind-power-projects-myanmar [Accessed
1 December 2015]; Black & Veatch, 2015. Black & Veatch starts
work in Myanmar on Southeast Asia’s largest solar power plant [online]
13 October. Available at: http://bv.com/home/news/news-releases/black-veatch-starts-work-in-myanmar-on-southeast-asias-largest-solar-power-plant [Accessed 21 December 2015].
The Ministry of Science and Technology’s research
and development department has also been designing hybrid renewable systems with capacities around 30 kW based on biogas and solar energy.
The commercial potential of both wind and solar is
overall underutilized, but the current implementation of these sources
is usually catered towards areas without access to the national grid.
The summary of the projects is provided in the table below (Table 2).
A mere 30% of the population has access to
electricity, leading to the country being the lowest amongst ASEAN
in
terms of per capita electricity consumption. This is all
a result of
inadequate maintenance of generation capacity, the lack of investment to
upgrade gas and coal power plants. This means a significantly lowered
potential capacity. Even in urban areas blackouts are frequent and a
common occurrence; In Yangon, 60% have access to electricity.
Promoting household use of alternative fuels. In
implementing the policy of wider use of renewables, promoting household
use of alternative fuels should be considered a consequential task.
This section will provide the details of alternative fuel potential,
specifically the development of modern biomass in Myanmar, both for
household and industrial usage.
The population in rural areas relies on off-grid
sources such as fuel wood (or ‘traditional biomass’) and kerosene. The
Ministry of Agriculture and Irrigation is considering substituting
gasoline and diesel consumption with modern biofuels; gasoline is to be
substituted by bio-ethanol, and diesel is to be substituted by
diesel-blends and bio-diesel. In doing so, the possibility of biofuels
competing with food production needs to be evaluated. To counter this,
the government has claimed almost six million hectares can be used for
biofuel crops without displacing 11 million hectares dedicated to food
and industrial crops. Although this seems harmless, it also means the
5.9 million hectares of uncultivated land will be deforested in order to
grow fuel crops.[10]
Apparently, the production of biofuels will ensure rural energy
security, which is true, and create jobs, since rural-to-urban migration
is expected, as jobs move from the agricultural sector to services.
Various feedstocks are being considered – the potential biomass energy
sources is summarized below (Table 4).
Project
|
||||
Bio-ethanol
|
Sugarcane, maize, cassava, sorghum, sweet sorghum, potato, toddy palm, nipa palm, root crops.
Since 2002, the Myanmar Chemical Engineer’s Group
constructed four ethanol plants to produce 7.4 million liters annually.
In 2008, the Myanmar Economic Cooperation built two ethanol plants,
adding a capacity of 6.8 million liters annually. Beyond the public
sector, private companies such as Great Wall have constructed two
ethanol plants, based on sugarcane and cassava.
|
|||
Bio-diesel
|
Palm oil, rapeseed, jatropha, coconut, niger, neem seed, cotton seed, soy bean, sesame, peanuts
|
|||
Gasification
|
Rice husk, sawdust, waste of forest products, agricultural waste, urban waste
|
|||
Biogas
|
Livestock wastes
|
Table 3. Myanmar’s potential biomass energy sources
Source: Ministry of Agriculture and Irrigation.
Since 1986 a compressed natural gas and natural gas
vehicle program was implemented. By 2011, 27,000 buses and cars were
converted.[11]
The number looks impressive, yet once compared to the 356,580
registered passenger and commercial vehicles in the country in 2011
(summing up the number of cars and 4-wheeled light vehicles, buses, and
trucks),[12]
this is merely 7.6%. Furthermore, the past government’s Jatropha
Plantation Project in 2006 to pro- duce 40,000 daily barrels of
bio-diesel to replace oil imports failed, as costs were too high and
yields were too low.[13]
Nevertheless, it seems the failure is to be blamed on dependent
variables such as weak implementation, that can be improved in the
future through better planning and cooperation, rather than independent
variables, allowing
a positive outlook to remain on other biomass
potential.
In addition, due to the strong, already existing
agricultural sector within the nation, modern biomass has the greatest
commercial prospects.
In addition to energy crops, other sources can be
produced into biomass, such as agricultural waste, industrial waste,
livestock waste, and municipal solid waste. Biogas has multiple uses
that make it attractive to develop, including cooking, lighting,
preservation of grains, preparation of fodder, and driving internal
combustion engines. This essentially constitutes the energy needs of a
household.
Biomass usage in villages is implemented through
biogas plants and biomass gasifiers. An example can be demonstrated by
the 33 million tons of rice Myanmar produces annually. The rice mills
that function continuously all year excrete large amounts of rice husks
that can then be used to generate steam for steam engines, or in motors
or diesel engines.
In fact, Wuxi Teneng Power Machinery Co., Ltd.,
installed a 1000 Kw biomass gasification power plant using rice husk in
2014, at one of Myanmar’s largest rice mills.
On the household aspect, a
village-scaled rice husk gasifierenginegenerator system with 50 kW
capacity was constructed in Dagoon Daing village, distributing
electricity to 304 houses in the population of 1,496 people.
Subsequently, a similar model has been developed for the utilization of
rice husk by Indigo Energy (Figure 7), “a company dedicated to improving
the reliability of electricity in Myanmar and the three quarters of the
country who do not have it.”[14]
Figure 7. System if using Rice husk in the process of energy production
Source: Indigo Energy, 2015. Our Company. Available at: http://www.indigoenergy.net/our-company/ [Accessed 22 December 2015].
However, construction of this model has yet to be
completed. In 2012, the U.S. company, Viaspace signed an agreement with
the government to bring King Grass to Myanmar. King Grass is a high
yield biomass clean energy crop and low-carbon fuel, enabling it to
supply clean electricity generation. In 2013, an update stated King
Grass was growing well locally and two projects were being worked on: an
1 MW anaerobic digestion power plant to serve as a nationwide model for
rural areas, and a larger direct combustion power plant to be connected
to the national grid or to provide electricity for industrial purposes.
In 2013, a joint project between the Asian wing of Nation First
Economic Development and Myanmar’s Hisham Koh & Associates was
signed to develop algae farms within the country. Algae can be produced
for biofuel or commercial animal feeds, making it a worthwhile
investment.
The fact that statistics are hard to find in these
new development projects reveal that modern biomass production in
Myanmar is still in a preliminary stage, perhaps even at a discouraging
sight, as the initially hopeful projects seem to have stagnated in their
updates. Another element to be blamed is the fact that a national
biofuel plan with clear targets and a road map for their achievement has
not yet been properly designed.
Energy Efficiency and Conservation.
According to the Asian Development Bank, the lack of energy efficiency
in Myanmar is a result of the lack of a legal and regulatory frame-
work, also there are no institutions dealing with the issue of energy
efficiency.
Improvements are being made locally. Some sporadic examples include:[15]
- New building codes and standards to improve energy use by buildings in Yangon (Yangon Master Plan with the Japan International Cooperation Agency’s assistance);
- The use of PE-coated pipelines to supply Yangon’s power plants and gasfired factories (improved longevity of these pipelines of at least 15 years, as there is better protection against rust);
- Improvement of coalfired power plants’ efficiency to above 40% (the use of ultra supercritical boiler technology imported from Indonesia, which promises very high efficiency levels and lower emissions).
Nevertheless, not one sector has overall
responsibility regarding energy efficiency, and as a result, there is
very limited progress. For example, there is no analogue of Thailand’s
Department of Alternative Energy Development and Efficiency, which is
within the Ministry of Energy.
Energy should be recognized as a scarce and valuable
resource. This will transform the culture of energy conservation.
Overall, there is great need for energy efficiency regulation and proper
rehabilitation of existing facilities.
Conclusion: The Path Forward
Through observing Myanmar’s energy policy goals and
measures, we can deduct that hydropower and biomass energy is seen as
the government plan’s core potential power source, whilst solar power
and wind energy has less aspirations due to its unreliability and, as of
now, poor commercial aspects and short-term factors. As a result,
Myanmar has shifted towards trying to control household energy
consumption through promoting alternative fuels as the primary source of
civilian energy resource to reduce any substantial growth and cost in
energy imports, reducing energy dependency.
The government’s ultimate goal of maintaining energy
independence can be rationalized by xenophobic tendencies, and to avoid
any devastating consequences of possible external pressures. In
addition, perhaps it is meant to avoid the “resource curse” and the
potential in becoming a “petrostate.” In both these matters, there
appears to be a popular idea to prevent the population’s dependence on
foreign fuel imports, as well as on their own hydrocarbon resources.
This could be rationalized in another perspective for the sake of
economic purposes, as the government hopes to maximize the profit of
selling their natural resources, instead of using it domestically, in
turn opting for using
the initial revenues towards existing alternative
fuels aspirations, and newer renewable resources development
to satisfy
their local energy consumption.
However, the expansion of Myanmar’s economy also
means that citizens are going to start earning more and consuming more,
increasing the amount of energy consumption per capita. In regards to
their overall progress so far, alternative resources and fuels cannot
meet these needs. Myanmar will confront many hindrances to achieving
their energy policy goals. The country lacks human and technological
capacity. The institutional foundation is not strong enough to lead to
reasonably consistent cooperation for reliable results. This means the
ultimate goal of maintaining energy independence will not to be achieved
until these improvements are made; perhaps for some time to come, as
although democratic hope is brimming due to Aung San Suu Kyi’s National
League for Democracy party, even the installation of a democratic
civilian government
is not a precursor of miraculous development.
Realistically, we are looking at a change that will only begin to show
after at least ten years.
For now, the government should focus on removing
these barriers while at the same time, focus on construction
and
maintenance of local gas pipeline infrastructure. This contradicts the
idea of focusing on long-term growth, rather than shortterm
electrification through hydrocarbons; however, it is a likelier source
to satisfy the predicted increase in local energy needs, to make sure it
can deliver consistent amounts with high efficiency, as renewables
development in the country does not yet have the means to prosper and be
fully implemented, since many of these projects are still in research
and development stages.
REf:https://enerpojournal.com/2016/06/24/myanmars-energy-sector-an-overview/
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