Myanmar wants to turn the lights on for everybody.
Just after winning the 2015 election, its ruling National League for Democracy party made a commitment to power access for the entire population.
While the statement was brief, Myanmar’s power problem is vast, complex and, most importantly, expensive.
The Myanmar government aims for total power coverage by 2030, but while access to the national grid has improved from 22.7 percent in 2005, just under 60 percent of the country’s population is still without power.
Although 90 percent of these powerless communities live less than 10 kilometres from the national grid, they still largely rely on wax candles, gas-burning stoves, and diesel generators.
This mix is changing: in 2005, 20.3 million people were using candles and kerosene for lighting, which had fallen to about three million in 2017. Meanwhile, in 2017, just over a quarter of all households used a solar system to light their houses, compared to a baseline of zero in 2009.
Connecting isolated populations with new transmission lines and distribution networks is expected to cost US$6 billion.
Meeting the surging demand for power, which the Ministry of Energy and Electricity expects to triple in the next 15 years, will meanwhile require quintupling the government’s power generation capacity through tens of billions of dollars of investment.
The cost of connecting
The road connecting a house to the power grid is long and winding.
It begins with generation by wind turbines, nuclear reactors, coal burning or any other energy source.
Distribution, through the high-voltage lines, power stations, transformers and other infrastructure involved in getting electricity to the population, is an entirely separate issue.
Myanmar is forming separate plans for power distribution (the National Electrification Plan, or NEP) and energy supply (the National Electricity Master Plan, or NEMP).
Each will require its own distinct investment schemes, timeframes, and bureaucratic challenges, but both plans have one thing in common: they will be very expensive.
The estimated $6 billion price tag on the NEP only covers the cost of connecting population centres to the grid and not the individual structures within them, which may cost another billion dollars.
Building this power infrastructure will fall largely on the government’s shoulders. Economic development organisations have shown a willingness to help, but so far the government has secured less than $1 billion, mostly in interest-free loans from German development bank KfW, the Asian Development Bank and the World Bank, which approved of a loan of US$400 million in 2015.
The power supply frontier
The generation side—supplying the demand for electricity which is expected to almost triple by 2030—will be much more expensive, requiring as much as US$40 billion dollars, according to a 2015 ADB estimate.
That money will come mostly from the private sector, with investors in natural gas, coal, hydropower and other major energy sources already lining up for a seat at Myanmar’s power generation table.
Yet the roadmap to Myanmar’s energy supply goals is still a work-in-progress. After the election, the NLD government consolidated its power and energy arms into a single entity, the Ministry of Energy and Electricity, which has been offered three competing energy sector development master plans by the ADB, the World Bank, and the Japan International Cooperation Agency (JICA).
The JICA-developed plan, the National Electricity Master Plan, was eventually selected, and JICA is taking a formative role in shaping Myanmar’s energy future. The latest draft of the NEMP, submitted in February 2018, called for an energy mix of 38 percent hydropower, 34 percent coal, 20 percent natural gas and 8 percent renewable sources.
Yet the Ministry rejected the draft, citing an overreliance on coal and a neglect of renewables. Myanmar’s energy mix for 2017, according to an MOEE report, included 61 percent hydropower and only three percent coal.
JICA has promised an update, but Myanmar’s final vision for its energy future is still up for debate and the process of powering Myanmar, in both generation and distribution, will almost certainly remain in flux.
As the public sector modernises, new research collection methods and data may overturn taken-for-granted premises and market trends. Economic development, the population’s actual power consumption, and other variables can change wildly over the next decade.
While Myanmar may indeed achieve total electrification by 2030, the steps it takes to get there will need steady support from private sector investments.