Turning on the lights in Myanmar

Published on Thursday, 06 June 2013

Published by Stephen P. Groff on Thursday, 06 June 2013

A multitude of statistics underscore the challenges that the people of Myanmar face when it comes to access to electricity - many of these illustrating a lack of conveniences other parts of the world consider commonplace, ranging from water pumps to stovetop ranges. 

At the end of the day, it boils down to one simple fact: nearly three-quarters of Myanmar’s people live without the ability to turn on the lights. 

In the capital, a little less than half of residents live without the ability to plug in a television, a microwave, or a desk lamp. In Mandalay, Myanmar’s second-largest city, two-thirds cannot rely on an electric radio or flip on the washing machine and carry on with other chores. 

But of all the numbers that illustrate the insufficiency of Myanmar’s current energy architecture, perhaps the most startling is that even if electricity output doubles every five years, it will take the first of those five-year periods just to meet today’s needs. 

In the meantime, demand is projected to increase by 12% a year.

Myanmar is endowed with hydropower, natural gas, wind, solar and biomass energy potential and - in theory - has adequate capacity to deal with current peak load demand. However, inadequate maintenance, lack of investment to upgrade gas and coal power plants, and poor compression in gas pipelines has meant that gas and coal-fired plants are operating at far below nominal capacity. Hydropower plants suffer similar limitations, particularly during the dry season.

An additional challenge relates to the fact that a significant percentage of future energy supply has already been earmarked for export – deals that were signed when Myanmar still operated under sanctions, yet needed to raise revenue. This means that this portion future output cannot be applied to projected growth in demand. 

So, against this backdrop how can the country ensure it has the energy it needs to meet the future it deserves? And how can it meet this need in a sustainable and inclusive fashion?

As a starting point, the government must set appropriate, sustainable electricity tariffs that reflect the true cost of producing power.

In 2011, the average price actually paid for electricity was only six cents per kilowatt hour, far below the cost of production. Subsidies may be politically popular, but they reduce revenue for maintenance and upgrades that keep the power grid functioning. “Lifeline tariffs” are crucial to help poor families afford electricity connections, but the best way to achieve this is through targeted programs, not blanket subsidies.

The country must also expand environmental and safeguard laws to include standards for measuring environmental and social impact. Laws that were enacted a year ago don’t go far enough in articulating processes for consultation and approval, which are crucial in enabling people to protect their land and livelihoods, claim compensation, and influence the country’s development. Providing a clear avenue for voicing complaints can also help ensure that government plans to boost energy supply are widely supported as well as minimize discontent. 

Another challenge relates to technical losses caused by aging and poorly maintained equipment, long distances over which power is transmitted, and extensive theft from the distribution system. Improvements over the last several years have reduced system losses from approximately 30% in 2003-2009, to 25% in 2011. But with one-quarter of electricity produced being lost, upgrades and public awareness campaigns are urgently needed to ensure power gets to where it’s needed most. 

Through support to the National Energy Management Committee, ADB is helping to improve coordination between ministries responsible for the country’s energy.  Our vision for supporting the government in their efforts to boost electricity supply will focus on preventing technical losses, promoting off-grid rural energy access, and helping establish the private-public partnerships needed to raise the financing for transmission grid rehabilitation and expansion.  All of this will be done while paying close attention to sustainability and inclusiveness.

Government plans to repair, rebuild and expand transmission lines are steps in the right direction and should help get more households connected to the grid. But without tackling issues around the grid – from tariffs to safeguards to promoting public-private partnerships – turning on the lights will remain out of reach for many of Myanmar’s people. 

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