Power Sector DeveloPMent

in MyAnMAr
Kee-Yung Nam, Maria Rowena Cham, and Paulo Rodelio Halili

no. 460
october 2015

adb economics
working paper series



ADB Economics Working Paper Series

Power Sector Development in Myanmar
Kee-Yung Nam, Maria Rowena Cham,
and Paulo Rodelio Halili
No. 460 | October 2015

Kee-Yung Nam (kynam@adb.org) is Principal
Economist, Maria Rowena Cham (rmcham@adb.org) is
Senior Economics Officer, and Paulo Rodelio Halili
(phalili@adb.org) is Senior Economics Officer at the
Economic Research and Regional Cooperation
Department, Asian Development Bank (ADB).
This paper was written as a background paper for the
ADB Myanmar Country Diagnostics Study. The authors
wish to thank Ron Ico, Lyndree Malang, and Lotis Quiao
for their excellent research support.



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Unreliable Supply of Electricity Constrains Private Investment and Affects the General Population Limited Electricity Access Hinders Inclusive Growth Electricity is Largely Affordable. B. Capacity and Generation Transmission and Distribution System POWER SECTOR CONSTRAINTS A. B. Poor Governance. VII. INSTITUTIONAL STRUCTURE OF THE POWER SECTOR 5 A. Primary Energy Supply Final Energy Consumption Establish the Governance and Institutions to Effectively Oversee and Manage the Sector Prepare and Implement a Least Cost Power Expansion Plan for Power Sector Development Aim for Sustainable Electrification Augment Investments in the Power Sector Improve Access to Electricity 8 8 13 15 15 16 17 19 20 20 21 22 22 22 DEMAND AND INVESTMENT GAP IN MYANMAR POWER INFRASTRUCTURE 22 A. INTRODUCTION 1 II. C. B. 23 23 Methodology and Data Results APPENDIXES 25 REFERENCES 29 . and Inadequate Funding Aggravate the Inefficient Management of the Sector RECOMMENDATIONS A. Policies and Relevant Laws Institutional Organization STATUS AND TRENDS IN THE POWER SECTOR A. Limited. but Low Cost is Unsustainable in the Long Run Absence of Systematic Planning and Programming. C. B. IV. E. VI. MYANMAR’S POWER SECTOR 2 A. 5 6 B. B. D.CONTENTS TABLES AND FIGURES iv ABSTRACT v I. D. 3 3 III. V.

7 Gigawatts in 2010 Power Investment Gaps from New Capacity and Replacement Needs. 2014–2030 9 11 11 12 12 13 14 15 15 17 23 23 24 FIGURES 1 2 3 4 5 6 7 8 9 10 Electricity Use per Capita in Selected ASEAN Countries. 2013 Distribution Losses Power Consumption in Region and State. 2000–2013 Myanmar’s Total Final Energy Consumption by Source. 2013 Transmission Losses Existing Distribution Lines and Substations. 2000–2013 Myanmar’s Total Final Energy Consumption by Sector. 2013 Unit Cost of Power Infrastructure Services Need Gaps from Projections of Power Infrastructure Stock Levels with Baseline Stock of 1. 2013 Hydropower Resources Hydropower Potential by River Basin Potential Hydropower Plants near Myanmar’s Borders Existing Transmission Lines. 2000–2012 Organization and Function of the Ministry of Electric Power Installed Capacity by Fuel Type Electricity Generation by Fuel Type Growth in Peak Load Electrification as of December 2013 Average Electricity Tariff in ASEAN Countries 2 3 4 4 8 9 10 10 16 18 .TABLES AND FIGURES TABLES 1 2 3 4 5 6 7 8 9 10 11 12 13 Installed Capacity and Generation Peak Load in Region and State. 2013 Myanmar’s Total Primary Energy Supply.

or vice versa. Myanmar. Because electricity consumption is expected to grow in emerging economies such as Myanmar.ABSTRACT While the economic literature has yet to establish whether greater electricity consumption leads to faster economic growth. and affordable supply. it is important that the government prioritize its stable. it is widely accepted that the better provision of electricity can enable pro-poor growth. Keywords: electricity access. efficient. and affordability. This paper assesses Myanmar’s electricity sector and recommends several concrete policy options to enable government to address issues such as supply security. especially for the poor and disadvantaged. supply security JEL Classification: H54. power sector development. greater accessibility. Q47 . power investment gap. Q43. The paper also estimates infrastructure demand and the corresponding investment requirements to narrow the supply gap in the power sector. L94.

lighting. followed by natural gas and coal. including renewable alternatives.I. hydropower remains the main source of fuel for electricity requirements. Section VII estimates infrastructure demand and investment requirements to narrow the gap in its supply in the power sector. constraining their pursuit of other productive activities. electricity is vital to social and economic development. and affordable supply. For example. and Section IV discusses status and trends.1 TWh). Its stable supply of power allows households to improve living conditions. in health care and education. Section V presents issues and constraints and Section VI lists short. and encourages entrepreneurial activity. increases labor productivity. and cooking needs across income levels. electricity allows health clinics to provide treatment even after sunset and children to attend school. reduces environmental damage and will mitigate the harmful effects of dirtier traditional fuel sources on poor people’s health and livelihoods. Although the country’s electricity consumption increased sharply between 2000 (3. . INTRODUCTION As a key infrastructure component. electricity produced using “cleaner” technologies. since having electricity is not an end in itself. the government should prioritize its stable.and medium-term policy recommendations. Even without the availability of such evidence. and sanitation. clean water supply. This paper assesses Myanmar’s electricity sector and recommends concrete policies to enable government to address issues such as supply security and sustained affordable access to electricity. While the country has abundant energy resources. Likewise.1 It is estimated that around 10–15 million people still have no access to electricity and around 12 million rely on traditional biomass for lighting and cooking. Its support of wide-ranging activities and services improves quality of life. Section II reviews the Myanmar power sector. or where economic growth leads to more electricity consumption. importantly. 1 Electricity consumption for 2000 is from the International Energy Agency (IEA) database (accessed 24 April 2014). efficient. The poor spend considerable time and financial resources on basic energy-related needs. Electricity needs to work with other sectors to ensure that the poor benefit as much as possible from that improved access. But the economic literature has yet to establish whether greater electricity consumption leads to economic growth. it is widely accepted that better access to reliable and affordable electricity can enable pro-poor growth. Section III looks at the current institutional set up. It frees up time otherwise spent on household and other chores and. helping to meet heating. while electricity consumption for 2013 is from ADB (Forthcoming). It is also vital to basic social services such as education. allows study after sundown. especially for the poor and disadvantaged. it is difficult to estimate the magnitude of the impact of greater access to electricity on poverty. health care. its per capita electricity consumption (160 kWh in 2013) is still one of the lowest among its regional peers. making goods and services across all economic sectors possible. Because Myanmar’s consumption of electricity is expected to grow. And it is a key input in economic production. access to affordable electricity can help developing countries meet the United Nations Millennium Development Goals. In addition.5 terawatt hours [TWh]) and 2013 (10. As such.

Figure 1: Electricity Use per Capita in Selected ASEAN Countries. Indonesia. The government has identified 92 potential large hydropower projects (each with at least 10 MW capacity) with total potential installed capacity of 46.426 2. and much less in most rural areas. World Bank.500 3. particularly hydropower and natural gas. Low electrification also hampers development of industry and even small businesses.000 1.101 MW (WEF. The country’s rivers can produce more than 100. Proven gas reserves were estimated at 20.500 Malaysia Thailand Viet Nam Lao PDR 0 ASEAN = Association of Southeast Asian Nations. 460 II. ADB. and Viet Nam.2 | ADB Economics Working Paper Series No. and Malaysia (both accessed 28 September 2015).500 2. Myanmar. . Offshore gas in the Yadana and Yetagun fields. most rural households burn firewood and animal dung for lighting and cooking. is the country’s most important source of export revenues.000 4. Lao PDR = Lao People’s Democratic Republic.org/gms-statistics/lao-pdr provide the 2013 data for Cambodia. and Accenture 2013). causing widespread acute respiratory problems. http://www.000 3. particularly in rural areas.org/data-catalog/world-development-indicators provide the 2012 data for the Philippines.000 megawatts (MW) of power once developed. The country therefore aims to develop and exploit its energy resources to increase the supply and reliability of electricity. both in the Andaman Sea. Gas is now exported to Thailand. Myanmar typifies a country saddled with “energy poverty” (IEA 2012).000 Philippines 1. Thailand.345 4. Coal reserves are estimated at around 489 million tons (ADB 2013a). And Myanmar is one of five major energy exporters in the region.worldbank. Sources: Greater Mekong Subregion Statistics. kWh = kilowatt-hour.285 241 506 672 730 Indonesia 156 Cambodia 500 Myanmar 1. particularly of natural gas. Lacking electricity. Myanmar has abundant energy resources. about 40% the country’s approved foreign direct investment of $8 billion was in the oil and gas sector (DICA).11 trillion cubic feet in 2012 (ADB 2013a). the Lao PDR. MYANMAR’S POWER SECTOR Per capita electricity consumption in Myanmar remains among the lowest in Southeast Asia (Figure 1). with huge potential for exploration. and will also be exported to the People’s Republic of China (PRC) once a gas pipeline is constructed.500 4. http://data.gms-eoc. 2013 (kWh per capita) 5. and accelerate overall economic development.000 2. reflecting poverty-level per capita incomes and an electrification rate of only 31% as of December 2013 (ADB 2013a). World Development Indicators. In 2014.

2000–2013 Biomass Source: Ministry of Electric Power. Figure 3 shows that energy consumption by fuel type is shifting toward coal.6 MTOE. an indicator of a highly vibrant sector.7 MTOE) of Myanmar’s energy supply was from biomass.Power Sector Development in Myanmar | 3 A. coal accounts for 2. B. which accounts for 78.2 Most of the produced gas is intended for export. Final Energy Consumption Overall. final energy consumption in Myanmar increased during 2000–2013 by an average of 1. or more than half of total energy supply. hydropower. More than half (54% or 9. accessed 26 February 2014.9%. In 2013. and biomass only 1.9% annually.1 MTOE to 12. 15% (2. and oil and gas pipelines are gaining ground. oil.6% (0.475 MTOE) and has been at the same level for the last 5 years. 2 Data from the International Energy Agency database. gas fields.6% annually. Coal Oil and petroleum products Gas Hydro 2012–2013 2011–2012 2010–2011 2009–2010 2008–2009 2007–2008 2006–2007 2005–2006 2004–2005 2003–2004 2002–2003 2001–2002 20 18 16 14 12 10 8 6 4 2 0 2000–2001 Million tons of oil equivalent Figure 2: Myanmar’s Total Primary Energy Supply. and 12% from gas. and biomass—was about 18 million tons of oil equivalent (MTOE) in 2012–2013 (Figure 2). Primary Energy Supply Total primary energy supply—coal. followed by 17% (3 MTOE) from hydro.8 MTOE) from oil. Natural gas grew 2. gas.8% in 2012. It generated $2. But the latter remained the main source of energy consumption at 77% in 2012–2013.6 MTOE. . which increased 11% on average annually during the period. from 10. Coal accounted for only a small share (3%). Investments in hydropower and coalpowered plants. And energy exports in 2011 were the equivalent of 8.1 billion export revenue in the first half of fiscal year 2014. Hydropower production has expanded rapidly (12% average annual increase from 2000 to 2013) whose share has since then significantly increased due to the commissioning of several hydropower plants.

during the same period. Figure 4: Myanmar’s Total Final Energy Consumption by Sector. 2000–2012 Million tons of oil equivalent 16 14 12 10 8 6 4 2 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Industry Commerce and public services Agriculture Transport Residential Nonspecified (other) Source: International Energy Agency database (accessed 28 September 2015). respectively. with 74% of the total in 2012—mainly in the form of biomass (fuel wood and charcoal). During 2000–2012. residential remains the largest consumer. Consumption in the agriculture and transport sectors contracted 3.7%.6%) and residential sectors (1. the commercial sector grew most. In energy consumption by sector (Figure 4).6% annual average. 460 Figure 3: Myanmar’s Total Final Energy Consumption by Source.6% and 0. . at 8. 2000–2013 Million tons of oil equivalent 14 12 10 8 6 4 2 Coal Petroleum products Gas Biomass 2012–2013 2011–2012 2010–2011 2009–2010 2008–2009 2007–2008 2006–2007 2005–2006 2004–2005 2003–2004 2002–2003 2001–2002 2000–2001 0 Electricity Source: Ministry of Electric Power.6%).4 | ADB Economics Working Paper Series No. followed by the industrial (3.

which sets the requirements for the electricity authority. and authorizes the Ministry of Electric Power (MOEP). (v) encourage the expansion of power transmission and distribution throughout the country and the employment of Public–Private Partnership in each sector. wind. and the principles and procedure in tariff setting and dispute resolution. (ii) conduct electricity generation and distribution in accordance with advanced technologies. To achieve energy sustainability. and enhance private participation in regional distribution activities. (iii) public–private partnerships and foreign investment for implementing renewable energy-related business. region and state governments. A.Power Sector Development in Myanmar | 5 III. the licensing and approval process for investments in the sector. which supplements the 1984 law. and leading bodies of self-administrated zones and self-administrated divisions the power to grant permits to entities to engage in electricity-related works such as generation. INSTITUTIONAL STRUCTURE OF THE POWER SECTOR Policies and Relevant Laws The following laws govern the power sector: (i) (ii) Electricity Act of 1948. (iv) restructure the power sector with the cooperation of boards. and empowers the government to grant rights to specified organizations. including foreigners to participate within the sector (Webb 2013). (iv) Myanmar Electricity Law of 2014. and the punishments and fines for various offences. transmission. (ii) awareness of alternative renewable energy sources. Nair. the duties and responsibilities of electricity inspectors. (iv) research and development of renewable energy. and (vi) reach millennium development goals in areas covering construction of thermal power plants and more hydropower plants. as amended in 1967. Lui. and regional organizations toward more participation of local and foreign investments and formation of competitive power utilities. and (v) energy efficiency. Existing power sector policies cover the following: (i) expand the national power grid for effective utilization of generated power from the available energy resources such as hydro. thereby encouraging foreign and domestic investments in power projects. and Paisner (2013) note that the 1984 law provides limited guidance on the rights and duties of the electricity license holder and is particularly silent on the responsibilities of public institutions. private companies. and distribution. It sees these as vital to electrifying rural areas and therefore promotes (i) capacity building of those involved in renewable energy generation activities. and other alternative ones to achieve sufficient electricity supply throughout the country. (iii) Electricity Rules (1985). which repeals that of 1984 and establishes the Electricity Regulatory Commission (ERC) and grants some regulatory responsibilities to the ERC. . (iii) conduct Environmental and Social Impact Assessments for power generation and transmission projects in order to minimize negative impacts. the government aims to increase electricity generation from renewable energy resources. thermal. solar. Myanmar Electricity Law (1984).

To operationalize the provisions in the new law. (iv) operation and maintenance of gas-fired thermal power generation. . 2. drafting of which may be completed by end 2015. and development of a framework or of model power purchase agreements for small and large power generation projects. The MOEP. (iii) construction. gas-fired generation. remain vested with MOEP and region or state governments. the government in January 2013 established the National Energy Management Committee and the Energy Development Committee to improve resource planning and oversee investment in electricity sector development. The Energy Development Committee. operation and maintenance of all large hydropower plants. sitting under vice president no. Institutional Organization Eight ministries are responsible for energy matters in Myanmar. the government has taken initial steps to strengthen legislation to facilitate the financing of power investments through various private sector participation schemes with the provisions in the new Electricity Law. and operation of minihydropower plants. In the absence of a comprehensive and transparent framework for increased private sector participation in the sector. has the following responsibilities: (i) development. operation. the identification and establishment of a regulatory body will play a central role in the strategic development of the sector. operation and maintenance of coal-fired thermal power plants. is responsible for implementing the National Energy Management Committee’s policies and plans. secondary legislation and implementing rules and regulations will have to follow.3 To strengthen coordination and planning among the energy sector’s institutions. Appendix 1 details the responsibilities of the other six ministries involved in the energy sector. The provisions include. the other key ministry. oversees overall energy policy in the oil and gas sector. preparation of a national electricity master plan. however. The first was responsible for coal and large hydropower generation and the second for power transmission and distribution. among other things. composed primarily of deputy ministers. As in other countries that have implemented power sector reform. identification of required institutions and their own distinct and respective functions. the overarching focal point. To date. implementation.4 The minister-level National Energy Management Committee. 460 The government also recognizes that foreign direct investment through the private sector will be one of the main vehicles to develop the power sector. B. Tariff determinations. which oversees policy formulation in the sector. while the ERC may give advice to MOEP and the region and state governments and leading bodies with respect to electricity rates but may not set the rates. (ii) development. and (v) planning. The national committee’s secretariat is 3 4 The Ministry of Energy’s list of responsibilities was taken from ADB (2013b). formulation of grid codes. The Ministry of Energy. The Ministry of Electric Power 1 and Ministry of Electric Power 2 were merged into one ministry in September 2012. implementation.6 | ADB Economics Working Paper Series No. and maintenance of the transmission and distribution systems throughout the country. over 200 MW of private sector power plants have been operational. and minihydro. formulates energy policy and plans in coordination with key energy-related ministries. implementation. And memoranda of understanding with about 50 companies covering hydro and thermal power plants are under consideration.

and the operation and maintenance of gas-fired power plants (gas turbines and combined-cycle gas turbines). implementation. and seven engineering construction companies capable of construction and installation of large hydropower projects. The MOEP has seven departments. 11 kV. It also operates the country’s only coalfired power plant.4 kV. and operation of off-grid minihydropower and diesel stations. The transmission network voltage levels under its responsibility: existing 66 kilovolt (kV). including off-grid generation and distribution. and mechanical works. The departments have the following functions: (i) (ii) (iii) (iv) (v) (vi) (vii) Myanmar Electric Power Enterprise develops and implements the transmission network. with a capacity of 120 MWs. including operation and maintenance. coordination. Yangon City Electricity Supply Board. and 0. On 1 April 2015. It is also responsible for planning. Yangon City Electricity Supply Board and Electric Supply Enterprise also implement system improvement and expansion of distribution systems. The regulatory framework and accompanying institutions specific to the sector’s regulation have yet to be established. . The Department of Electric Power is responsible for planning. and the deputy minister for energy supervises its daily operation. The government is therefore reviewing the Electricity Law with an eye to including amendments that can address issues relating to supply security. namely: 33 kV. Electric Supply Enterprise covers the supply of power to the rest of the country. The Department of Hydropower Planning is in charge of planning hydropower projects to be implemented by both the government and through the private sector. investigation works. financially independent from MOEP. and equitable access to good quality service. three mainly operating entities—Myanmar Electric Power Enterprise. and serves as staff of the MOEP. meaning that transition to a competitive market or any functional unbundling necessary to allow more efficient and reliable service has not taken place. The distribution systems consist of lower voltage levels. the YESB has been corporatized into state-owned Yangon City Electricity Supply Corporation.Power Sector Development in Myanmar | 7 composed of staff seconded from the energy-related ministries. which comprises 17 states and regions. Yangon City Electricity Supply Board (YESB) is responsible for the supply of electricity to consumers in Yangon City. and Electric Supply Enterprise (Figure 5). Full privatization is planned within the next 3 to 4 years. 132 kV. and 230 kV. international relations. however. 6.6 kV. The Department of Hydropower Implementation has four institutes responsible for design. electricity pricing. and the planned 500 kV (under construction in four phases). Hydropower Generation Enterprise operates and maintains all the MOEP’s hydropower stations and is involved in the operation and maintenance of power plants under joint venture arrangements with the private sector. low voltage distribution system.

MEPE = Myanmar Electric Power Enterprise. The Mandalay Electricity Supply Board has also been transformed into an independent publicly owned firm. Ministry of Electric Power 2013. small hydropower generation GT. a Effective 1 April 2015. to reduce running costs and national budget deficit. DHPP = Department of Hydropower Planning. wind. transmission and distribution of power on a township level will be handed over to private sector contractors. while Figures 6 and 7 show the shares of installed capacity by fuel type from 2000 to 2014. STATUS AND TRENDS IN THE POWER SECTOR Capacity and Generation Table 1 presents existing capacity and generation by fuel type. Mandalay Electric Corporation. GT. or about 36% of the installed capacity. . Sources: ADB 2012a. During the dry season. or 40% of total installed capacity due to periodic scheduled maintenance of power plants and limited availability of water storage facilities for hydropower plants (WEF. ESE = Electricity Supply Enterprise. With the restructuring of the MOEP commencing with the corporatization of YESB into Yangon Electricity Supply Corporation.8 | ADB Economics Working Paper Series No. available capacity remains limited—1. DHPI = Department of Hydropower Implementation. wind farm implementation. GT = gas turbine. A. HPGE = Hydropower Generation Enterprise. Despite the increase in installed capacity.655 MW. available capacity falls to 1. with more than two-thirds coming from hydropower (Figure 6). IV. 460 Figure 5: Organization and Function of the Ministry of Electric Power MOEP DHHP DEP DHPI Hydropower and thermal power projects implementation Hydropower and thermal power projects planning MEPE HPGE Planning Implementation YESBa Hydropower station and coal-fired thermal plant generation Transmission line. and other projects planning ESE Transmission Generation System Operator Electricity distribution (Yangon City) Electricity distribution Generation Distribution DEP = Department of Electric Power. ADB. YESB has been corporatized as Yangon City Electricity Supply Corporation which is financially independent from MOEP. Installed capacity grew by a factor of four during 2000–2014 and reached 4.422 MW in 2014. 13). MOEP = Ministry of Electric Power. and Accenture 2013. substations.560 MW (ADB 2013a). YESB = Yangon City Electricity Supply Board.

Notes: There are 23 hydropower plants in operation with installed capacity higher than 10 MW. b Firm capacity is as of July 2013. ADB Forthcoming. There is only one coal-fired power plant of capacity 120 MW. Minihydro and solar account for 0.000 2. Sources: For 2010–2011: Central Statistical Organization 2011. c Annual production is for 2013–2014. Oil accounts for about 0.100 GWh in 2000–2001 to about 12. On average. a Installed capacity is as of 2014.5 5 Estimates based on the Ministry of Electric Power as presented in ADB (2012a) and Aye (2013). Of the gas plants. For 2012– 2013: Ministry of Electric Power as presented in ADB 2012a subsequently updated in ADB 2013c. total generation increased annually by 6.500 3.500 2.794 23 … … 100 … 61 12.500 4.247 … … 100 … = not available. as presented in ADB 2012a subsequently updated in ADB 2013a. For 2011–2012: Naing 2013. 213 MW were installed by independent power producers in 2013. . Coal Oil Hydro 2013–2014 2012–2013 2011–2012 2010–2011 2009–2010 2008–2009 2007–2008 2006–2007 2005–2006 2004–2005 2000–2001 Megawatt Figure 6: Installed Capacity by Fuel Type 5.72 MW biomass.000 3.000 4.823 75 569 5 2. MW = megawatt.422 Firm Capacityb (MW) (%) 986 59 27 2 642 39 0 1 100 … … 1. Only four hydropower plants have units larger than 50 MW.236 28 Power Plants Hydro Coal Gas Minihydro and solar Oil Total 5 56 4. Hydropower’s share in total generation grew from 37% in 2000–2001 to 72% in 2013–2014. while gas includes 3. Hydropower includes installed capacity for export of 520 MW at maximum. Sources: ADB 2013d. Ministry of Electric Power.005 68 120 3 1. Central Statistical Organization 2015.000 1. ADB Forthcoming. and some 40 mini and microhydropower plants with a total capacity of 34 MW. Electricity production has doubled from 5. GWh = gigawatt-hour.000 500 0 Gas Note: Coal includes 165 MW steam.500 1.Power Sector Development in Myanmar | 9 Table 1: Installed Capacity and Generation Installed Capacitya (MW) (%) 3.655 Annual Productionc (GWh) (%) 8.11% of installed capacity.800 GWh. Gas contributed 23% and coal 5%.4% over the period. or 8.200 GWh in 2013–2014 (Figure 7).5%. Details are presented in Appendix 3.

600 1. and 2.200 1. 2015. Sources: Central Statistical Organization 2011. it increased 15% on average (Figure 8). For 2012: ADB 2013a. For 2014: ADB Forthcoming.001. Table 2 shows peak load by region and state.3 MW in 2013.200 2.000 10. some regions suffer blackouts lasting 12 to 16 hours (Sharma 2013).10 | ADB Economics Working Paper Series No.400 2. Peak load reached 1. During 2009–2014.000 1. 460 Figure 7: Electricity Generation by Fuel Type 14. .000 4.000 800 600 400 200 0 24 20 16 16 12 12 88 44 00 -4 –4 Growth. For 2013: Ministry of Electric Power. 2. frequent load shedding (usually between 8:00 am and 11:00 am) has been a common occurrence.000 Coal Oil Hydro 2013–2014 2012–2013 2011–2012a 2010–2011 2009–2010 2008–2009 2007–2008 2006–2007 2005–2006 2004–2005 2000–2001 0 Gas a 2011–2012 is estimated using the Ministry of Electric Power as presented in ADB (2012a) and Aye (2013). Worse. percentage change (%) 28 -8 –8 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Peak load. The demand for power exceeded the available capacity of the system and coupled with unstable frequency control. 2. Peak load or demand has been rising in the last 7 years.800 1.400 in 2014.000 8. megawatts Figure 8: Growth in Peak Load Load Growth Sources: For 1989 to 2011: ADB estimates.000 2.000 6.000 Gigawatt-hour 12. Ministry of Electric Power as presented in ADB 2012a.400 1.790 MW in 2012.

and their development remains experimental for now (ADB 2013c). installed capacity stands at 2.22 106.55 . respectively.9% annual average.73 51.331 MW (Tables 3 and 4).000 MW hydropower potential. Source: Ministry of Electric Power as presented in WEF.25 806. Table 3: Hydropower Resources Capacity Less than 10 MW Between 10 MW and 50 MW More than 50 MW Total Number of Potential Sites 210 32 60 302 MW = megawatt.00 2. however.02 71. at 6. Wood chip gasifiers of 30 kW and 50 kW capacities have been installed in rural areas and universities for research. Myanmar has also started tapping renewable sources such as biogas. Source: Ministry of Electric Power. and 25 kW capacities all over the country.32 10.330. followed by industrial and commercial users with 36% and 20%.52 36.3%) (ADB 2012b).660 MW. Potential Capacity (MW) 231.80 7. In addition. followed by the commercial (4. and wind power. Power consumption in the industrial sector grew most rapidly during the period. These types of renewable generation projects entail high initial investments. It has installed around 185 biogas digesters of 5 kW. and wind and solar energy technologies are being piloted to augment power generation sources. and Accenture 2013. Based on the 2010–2011 data from the MOEP. ADB. 6 Out of 10.25 13.70 358. 15 kW.9%). solar.001.000 MW of potential capacity near the country’s borders with Thailand and the PRC could be explored and developed to boost existing capacity and to expand export potential (Table 5). Augmenting power supply remains an MOEP priority.50 14.293.00 46.30 45.23 95. about 40.21 64.83 79.20 11.6 And the MOEP has identified 302 potential hydropower project sites with a combined capacity of 46. exploration and exploitation of hydropower resources has made hydropower the major source of power generation. household electricity consumption accounted for 42% of the total.Power Sector Development in Myanmar | 11 Table 2: Peak Load in Region and State.26 MW = megawatt.85 4. and transport sectors (2. In the last 50 years.24 107. 2013 (MW) Region/State Yangon Mandalay Bago Magway Nay Pyi Taw Sagain Region Ayeyarwaddy Shan (South) Mon Shan (North) Kayin Shan (East) Tanintharyi Kayar Rakhine Kachin Chin Total Peak Load 832.64 136.

Myanmar’s generation system used to consist only of isolated grids.000 Laza 1. starting in 1974. each with installed capacity ranging from 12 MW to 75 MW. Source: RTE International 2010. Eight more hydropower plants.900 Chipwinge 99 Gawlan 100 Wu Zhongze 60 Hkankawn 140 Tongxinqiao 320 Lawngdin 435 Tamanthi 1. added another 84 MW power plant with 596 GWh annual average supply. and suppliers were limited to diesel generators and minihydropower.934 MW. were commissioned between 1974 and 2005. Table 5: Potential Hydropower Plants near Myanmar’s Borders Northern Borders Project Capacity (MW) Myitsone 6.776 46.000 200 520 96 25 165 50 28 88 200 7.700 Yenam 1.101 MW = megawatt.775 MW = megawatt. Source: Ministry of Electric Power as presented in ADB 2012a.200 Nam Tamhpak (Kachin) 200 Total 21.641 720 1. with an 84 MW power plant that could supply 595 GWh of electricity to Yangon and Mandalay.000 Chipwi 3.360 600 17. another eight power plants were built.200 Pisa 2.800 Kawnglanghpu 2.821 3. with total installed capacity of 1.12 | ADB Economics Working Paper Series No.110 105 45 150 105 180 180 4. During 2005–2011.400 1. Development of larger capacity power plants only started in 2005.128 17.000 1.390 MW—Shweli-1 commissioned in 2008 and Yeywa in 2010.400 Wutsok 1. The second stage. Shweli-1 augments domestic supply with 50% of its total generating capacity and exports the remainder to the PRC. The country pursued medium-scale hydropower development in stages beginning in 1960.554 Other Borders Project Dapein-2 Kunlong (Upper Thanlwin) Naopha Mantong Shweli-2 Ken Tong Wan Ta Pin So Lue Mong Wa Keng Yang He Kou Namkha Mong Ton (Upper Thanlwin) Htu Kyan Henna Tha Kwa Palaung Bawlake Nam Tamhpak Ywathit Hutgyi Tanintharyi Total Capacity (MW) 168 1.015 1. 460 Table 4: Hydropower Potential by River Basin (including tributaries) Number 1 2 3 4 5 6 Total River Basin Ayeyarwaddy Chindwin Sittaung Thanlwin Mekong Others Number of Promising Hydropower Projects 34 8 11 21 4 14 92 Installed Capacity (MW) 21. . including two large-scale hydropower plants with a combined capacity of 1.

about 3% of total generation. Calorific value is the amount of heat released when a specified amount of a substance is burned. and manage minihydropower plants to provide off-grid power. B. Table 7 presents transmission losses during 2007–2013.1 MW supply power to villages and small industries not connected to the grid. especially in remote areas. with a variety of portal and conventional.Power Sector Development in Myanmar | 13 The government continues to build.602. the output of its nine gas-fired power plants has fallen short of expectations. The transmission lines are mostly single circuits.983. has resulted in a low calorific value. 7 8 It includes 165 MW steam and 3. But off-grid power supply is intermittent and usually provides an average of just 2 hours per day.8 In addition.859.72 MW biomass. or an average capacity factor of only 31%. Appendix 4 presents available technologies of producing electricity in Myanmar. Table 6: Existing Transmission Lines. (kilometers) 3. 132 kV. 2013 Voltage (kilovolt) 230 132 66 Total Number of Lines 47 40 163 250 Length (miles) 1.406. or 19% of the country’s total installed capacity. 32 minihydropower plants with total generating capacity of 33. freestanding towers.263.7 The high nitrogen content of gas from the country’s offshore and onshore gas fields. Combined capacity of these gas-fired plants is 678 MW.19 2. Transmission and Distribution System The transmission system consists of an interconnected overhead grid of 230 kV. adding to the inefficiency of gasfired plants.04 4. Assessment suggests the transmission lines are still in good condition. which has power plants operating well below their average capacity factor of 70%.249. Currently. however. but transmission of power over long distances through the 230 kV lines has resulted in significant decreases in voltage of up to 10%. and the structural designs mostly lattice steel towers. Tigyit. with 120 MW installed capacity.67 6.057. This is way below ideal operating capacity of 75%–80%.86 2. Although Myanmar has abundant gas resources.09 . The country operates only one coal plant. while gas pipelines lack compression. operate.18 Source: Ministry of Electric Power.33 1.19 10. again suggesting inefficiencies in operation. Some have overhead lightning protection earthwires. and 66 kV (Table 6). in the central part of the country and commissioned in 2002 generates 217 GWh to 389 GWh of electricity annually. The only coal power plant. gas-powered plants need to be shutdown frequently for maintenance.139.

On the distribution side. for example.140 kms. Again.042 6.281 6.68 7. To expand the entire network.567 9. 460 Table 7: Transmission Losses Year 2013 2012 2011 2010 2009 2008 2007 Net Transmitted Energy (GWh) 11. mostly in Yangon. Only about 47. around 66% are still 66 kV systems. plans exist to introduce the 500 kV transmission lines that will connect the majority of the country’s generation facilities.588 Energy Losses (GWh) 533 747 771 573 499 361 419 Losses (%) 4.4 kV distribution transformers.86 7. with the main load centers in the south. most of them originating around Yangon and running north. predominately located in the north.230 kV systems exist.93 GWh = gigawatt-hour. Ywama.52 7. which run along Route 1 up to Bago and then connect to Thazi.820 9. and 6.057 kilometers (kms). Another line traverses the same corridor as Route 2. running 3. The 33 kV is used to connect 33/11 kV zone substations and in the future could be used to directly supply 33/0. some have noted. and 66 kV transmission lines. The country has about 250 transmission lines. Source: For 2012–2013: Ministry of Electric Power. The majority of the existing 6.000 MW of transmission capacity will be required if the additional export of power should materialize. the system comprises a network of 33 kV. Thaketa. Cross-border connections have been established to export power from the 600-MW Shweli-1 Hydropower Plant and from the Dapein Hydropower Plant to the PRC. while the 66 kV lines are mostly in the east (See Appendix 2).812 7.386 10.853 9.167 5. For 2007–2011: Ministry of Electric Power.007 Net Received Energy Distribution Side (GWh) 10. extending 10.14 | ADB Economics Working Paper Series No.614 6. up to the Shwe Daung gas turbine. .48 5. mechanisms should be established to finance these transmission lines and to ensure they form an integral part of the transmission network. but then turning west of the Bago Yoma forest. running north. The government also plans to construct additional 230 kV. 132 kV. and of these. starting from the same point near Yangon. and Ahlone). Currently. A study of future cross-border power connections within the Greater Mekong Subregion suggests potential export from Myanmar to the PRC may reach 100 TWh. as presented in ADB 2012a.921 5.07 7. 11 kV.041 7.263 kms. authorities have made no definite decision on specific routes or the schedule of construction (ADB 2013c). and then to the town of Taungdwingyi.6 kV originating from the grid and zone substations and connecting to the distribution transformers. However. it is unclear what will be the exact routes of these transmission lines (RTE International 2010). which then supply single and three phase 400/230 volt to connected customers (Table 8).74 6. Thailand may well also import more power in the future.665 6. the same study noted that some 6. One line runs north from the four combined-cycle gas turbine stations around Yangon (Hlawga. are already outdated and need to be phased out and replaced with those capable of handling higher voltage to improve the efficiency of the distribution network and reduce losses.6 kV lines. which would require between 20–30 gigawatts of transmission capacity. The 132 kV transmission lines run mainly to the north of the 230 kV systems and cover about 2.

Per capita electricity consumption is the lowest among Myanmar’s .3 21. which will lead to high resistance connections. and the 6. more reliable.79 1.6 0. the government plans to upgrade several 6. with base and open-wire construction using concrete poles. Source: Ministry of Electric Power.4 Total Length (miles) 4.or two-pole structures.451.000 kVA and most are still in working condition.Power Sector Development in Myanmar | 15 Table 8: Existing Distribution Lines and Substations. resulting in high losses and ultimately burnout and failure of the conductor.51 … = unknown. In response. Many service connections still use impractical twisted connections. Myanmar also has yet to introduce the more efficient aerial bundled conductor. The construction of the system is generally overhead.39 Capacity (megavolt-ampere) 4.6 19. some of the transformers are installed indoors in substation buildings. Table 9: Distribution Losses (%) Year 2013 2012 2011 2010 2009 2008 2007 Losses 12.773.85 44. ADB 2012a.28 28. 2013 Voltage (kilovolt) 33 11 6.14 9.55 5. the 11 kV network by 360 kms. The sizes of the distribution transformers vary from 100 kilovolt amperes (kVA) to 1.079. the rest are either ground-mounted or on single.908.6 kV network by 250 kms (Sharma 2013). mainly in the Yangon metropolitan area. they remain in double digits (Table 9).630.2 19.17 … 11.08 1. A.81 (kilometers) 7.016.5 16.543.4 22.503.311.97 20. and efficient protection systems. Some distribution is underground. construction designs need to adopt modern. four-wire system with the neutral solidly grounded. The lowvoltage network comprises a 400/230 volt three-phase.56 838.6 Sources: Ministry of Electric Power.220.213.930. In addition. POWER SECTOR CONSTRAINTS Limited.83 12.7 19.6 kV systems to 11 kV. V. and expand the 33 kV network by 400 kms. Many of the distribution structures are also outdated and considered insufficient for present-day loads.349. In urban areas.48 15. Frequency is nominally 50 hertz. Although distribution losses have improved over the last 5 years. Unreliable Supply of Electricity Constrains Private Investment and Affects the General Population Electricity consumption for all types of consumers is low because generating plants have limited capacity to meet growing demand.

which accounts for 90% of traditional biomass used. Continued reliance on fuel wood. and poorer districts only 1 hour (WEF. with a prolonged dry season keeping hydropower plants from generating at full capacity. Even major cities like Yangon still experience power outages. has the highest electrification (78%). and the large capital requirements for implementation. of up to 500 MW (ADB 2012b). B. wealthier districts get an average of just 6 hours of power per day. Myanmar has not developed these because of concerns about environmental impact. supply is intermittent. limiting economic activity. natural gas. ADB. also threatens forests and. Extremely low rural electrification in several divisions or states is a particular concern. 28 28 25 23 23 35 33 40 39 40 78 46 60 80 100 . the government approved the National Electrification Plan in September 2014. the power grid experiences frequent load shedding during the dry season.and coal-fired plants significantly below potential capacity. Mandalay (40%). despite abundant hydropower. Limited Electricity Access Hinders Inclusive Growth The number of electrified towns and villages in Myanmar has increased slightly. with Kayah State (46%). and about 70% of the population has limited or no access to electricity. and Nay Pyi Taw (39%) following (Figure 9). High system losses from the outdated transmission and distribution infrastructure compound supply problems. Yangon region. Figure 9: Electrification as of December 2013 (%) Yangon Kayah Mandalay Naypyitaw Mon Shan (South) Kachin Bago (East) Sagaing Shan (North) Bago (West) Magway Chin Shan (East) Rakhine Ayeyarwady Tanintharyi Kayin 6 0 11 9 18 17 16 16 20 Source: Ministry of Electric Power. The current generation mix is highly dependent on hydropower (75% of the total in 2012). and Accenture 2013). emergency gas plants have been installed and more are being procured to address summer load shedding. And limited resources for upgrading and maintenance and high fuel costs keep gas. but electrification remained low overall at around 34% as of 2014. 460 regional peers. resettlement and ethnicity-related issues. Indeed. Under the national target of universal access by 2030. such as in Rakhine State (in the southwest) and areas east of Yangon and in the Ayeyarwaddy Delta. thus.16 | ADB Economics Working Paper Series No. highlighting the need for comprehensive least cost generation planning for the whole country to address deficient electricity supply (ADB 2012b). Seasonal variation in rainfall also does not help. and renewable alternatives. In the meantime. providing for an aggressive grid electrification rollout program and an ambitious off-grid program. environmental sustainability. Even for those with access to power. Yet.

000 kWh).16 (for 50.7 10.8 49. with Mandalay a distant second with 17%.10/kWh (for 501–10.001–50. accounts for 50% of total electricity consumption. and can cut time allotted to household chores.2 2.3 4.8 1.000). as the biggest city.5 1. Yangon. Rising electrification may not immediately drive industrial development.0 209.2 5. Mk100/kWh or $0.3 280.8 17. Mk125/kWh or $0. making electricity especially affordable to residential and commercial end users (Figure 10). Nay Pyi Taw.5 0.8 2. most recently with effect on 1 April 2014. and Mk100/kWh or $0. Mk125/kWh or $0.5 4.0 324.1 20. Mk40/kWh or $0. C.4 3.6 183.04/kWh (for 101–200 kWh).13/kWh (200. Electricity is Largely Affordable. freeing time for other work or leisure. Table 10: Power Consumption in Region and State. but it could spur the growth of micro and small and medium enterprises or home businesses.031. More electricity will also boost access to information.08/kWh (until 500 kWh). Mk150/kWh or $0.4 0.7 0.8 558.0 1.9 4. consumes about 6% of electricity (Table 10). and (ii) For industry: Mk75/kWh or $0. .000 kWh).9 36. and Mk50/kWh or $0.7 493.13/kWh (for 10.9 9 Current electricity tariff rates are as follows: (i) For households: Mk35/kWh or $0. It could also improve quality of life: lighting increases study time for students. 2013 Region and State Yangon Region Mandalay Region Nay Pyi Taw Magway Region Sagaing Region Ayeyarwaddy Region Bago Region (East) Shan State (South) Mon State Bago Region (West) Shan State (North) Kayin State Shan State (East) Kachin State Kayar State Tanintharyi Region Rakhine State Chin State Total Power Consumption (GWh) 5. but Low Cost is Unsustainable in the Long Run Myanmar’s electricity tariff is among Southeast Asia’s lowest. Source: Ministry of Electric Power.2 0.9 Share of Total (%) 49. The country’s capital. especially in rural areas.1 2. improves the study environment for school children.Power Sector Development in Myanmar | 17 As of 2013.5 199.8 67.740.000 kWh).001–200.0 GWh = gigawatt-hour.6 157.111.10/kWh (300.9 448.0 29. The government has raised tariffs several times over the years.001–300.4 276.6 0.0 100.3 0.05/kWh (for 201 kWh and above).001 kWh and above).036/kWh (for consumption until 100 kWh).7 2.

585 19. the estimated cost per kilowatt should be at least Mk125/kWh (Song 2013). especially those in power. The government spends around Mk185 billion annually to cover both generation and distribution costs. BRU = Brunei Darussalam. 14.760 7. The tariff has been set in response to equity objectives and thus. do not necessarily ease access to electric power. Sources: ASEAN Center for Energy 2011. which does not reflect the true cost of generation..040 1.555 13. 14.050 5.935 . but must also shoulder the initial connection fee of Mk100. MYA = Myanmar.500 5.. Off-grid consumers pay tariffs varying by the cost of generation by type of power plant..780 9. the alternative. Poch and Tuy 2012. and Ritter 2012). ASEAN = Association of Southeast Asian Nations. as noted.940 6.170 Industrial SIN THA VIE 11.090 8. MAL = Malaysia.170 7.650 9. INO = Indonesia. government sets tariffs for its services.910 13.500 9.000 (excluding the costs of internal wiring and related materials and service charges).465 12. however. Including transmission costs.670 6.18 | ADB Economics Working Paper Series No. as well as low power quality.580 10. This is considered high for most people outside urban areas. and VIE = Viet Nam. Private households applying for electricity connection not only face long waiting times. knowing that the present tariff structure will not generate enough profit. Government usually sets fixed tariffs below cost.355 6. which are provided to sustain the continuous operation of power plants. Messinger. SIN = Singapore. The price of electricity appears to be lower in Myanmar for users that consume at most 500 kWh. 460 Figure 10: Average Electricity Tariff in ASEAN Countries 20 $ cents/kilowatt-hour 16 12 8 4 0 Residential BRU CAM INO LAO MAL MYA PHI Commercial 9. These subsidies. suffer frequent planned and unplanned power cuts. Affordable tariff rates.385 6.760 6. PHI = Philippines.170 . Diesel generators. Note: Average electricity tariffs were computed for each sector.465 9. CAM = Cambodia.195 9. with tariffs ranging between Mk100 and Mk300 per kWh (or between $0. Those eventually connected to the central grid.31/kWh). leaving the sustainability of operations and upgrading of its facilities mainly .060 9. strain fiscal capacity and discourage private power producers from investing and expanding operations.310 … = not available.10 and $0. mainly because of the government-controlled pricing policy. can prove very costly in the long run (Bodenbender. preventing the agency or the government operator from modernizing and expanding operations. THA = Thailand. LAO = Lao People’s Democratic Republic. to make them affordable to the general public.785 9.360 3. compared to other countries in the region..

programming. and so on. making for uncoordinated or underinvestment in electricity infrastructure in unserved areas. and a master plan has resulted in poor prioritizing of capital investments. has held back the expansion of infrastructure investments. with no clear lines of responsibility. including state-owned enterprises involved in managing a sector. . making assignment of responsibilities illogical at times. has also been consistently raised as an important short-term issue hindering progress. Institutional overlaps and the lack of a regulatory framework impede power sector development. especially in poor and remote areas. The poor capacity of institutions in planning. Given the number of ministries and departments. including targets and options that an institution will implement over a period given the objectives. When the institutional structure of a sector is fragmented and composed of many ministries. Most importantly. and in monitoring and management of sector programs and projects. and Inadequate Funding Aggravate the Inefficient Management of the Sector 1. it considerably diminishes the impact of their respective actions and raises costs. Personnel in the power sector.Power Sector Development in Myanmar | 19 dependent on government subsidies. And the implicit subsidy is a fiscal burden for already stretched government. The new Electricity Law does not grant the ERC the tariff-setting function. These lay out the policies and strategies. especially because the infrastructure network needs refurbishment and upgrading to cater to growing needs. Lack of tariff adjustments. operating. and prioritization of capital investments. has contributed to sector inefficiencies. competition. An inadequate and inefficient infrastructure system is one result of not institutionalizing the formulation of overall sector or subsector master plans. When two government ministries or agencies lack coordination and compete or disagree over issues. Absence of Systematic Planning and Programming. programs. after long isolation. and no regular program has been instituted to upgrade their capabilities for planning. No one ministry oversees the various requirements of the entire sector. 3. Personnel must also be able to plan and conduct economic and financial-related due diligence to guide decision makers on capital related investments. 2. Poor Governance. Duplication of function creates so-called jurisdictional grey areas. which suffers through inadequate or inefficient services. for example. D. also threatens service efficiency. overlaps and redundancies cost the public. The lack of overall sector and subsector policies. strategies. with consequences if these overlaps are not addressed. The need for a separate and independent power regulator in charge of regulating issues such as tariff setting. and identifying sector needs. The lack of a comprehensive plan that identifies and implements priority investment projects. it will be difficult to gain the agreement needed to institute new policy directives. roles and responsibilities usually overlap. have not benefitted from exposure to international developments. and administrative reforms. and managing assets. Capital investment and budget decisions in Myanmar are therefore centralized and not based on any approved sector plan.

Establish an appropriate regulatory framework and create an independent regulatory body that will (1) promulgate and approve rules and regulations of the power sector. and (4) issue licenses to electricity industry participants. Streamline the ministries involved in the power sector. Formulate a policy framework for the development of renewable energy sources. more importantly. RECOMMENDATIONS Establish the Governance and Institutions to Effectively Oversee and Manage the Sector Short.  Review the mandates of each ministry and identify constraints to effective execution of functions. Institute reforms that promote cooperation and coordination among ministries. no formal public–private partnership framework exists to facilitate that participation in the power sector. with funding for upgrading. wherein it identifies and prioritizes capital and recurrent requirements. Develop a legal and institutional framework for the participation of the private sector in the power sector. And because programming of requirements is not synchronized with expected funding over the medium-term. Promote collaboration between national and regional governments in planning and implementing power development projects. A. Every developing country’s resource envelope is limited. The large financing needs of Myanmar’s competing sectors severely constrain the overall budget.and medium-term measures (i) (ii) (iii) (iv) (v) (vi) (vii) Assess current institutional structure. private sector investment has also been limited in the last few decades. Limited fiscal space has constrained capital investment in the power sector and. and operations and maintenance) have left power-related infrastructure in poor condition.20 | ADB Economics Working Paper Series No. Inadequate funding (capital expenditures. and operations and maintenance neither timely nor regular.  Develop a database of renewable energy data. The programming and budgeting framework of sector ministries is not prepared based on a medium-term expenditure framework. (2) screen and approve power purchasing agreements. the sustainability even of existing assets is threatened. State-owned enterprises still provide most electricity. Ensure that appropriate legislative frameworks are updated as needed and accompanying implementing rules and regulations are proposed and adopted as early as possible. and although there is a role for private sector in providing electricity services. 460 4. VI.  Assess technical and financial capacity of each ministry. Ensure the clarity of each ministry’s role and remove overlapping functions. 5. The new Electricity Law already provides for the establishment of the Electricity Regulatory Commission (ERC) but with limited functions. . among other regulatory functions. (3) approve tariff proposals and wheeling charges.

Establish a reliable. Consider providing subsidies during the initial phase of the renewable energy development program. research. Consider construction of coal-fired plants using clean coal technology.and long-term power demand and supply. Medium. Expedite committed construction of additional coal and gas-fired power generation plants.to medium-term measures (i) (ii) (iii) (iv) (v) (vi) (vii) Conduct a detailed and comprehensive assessment of the power sector’s performance. Rehabilitate and upgrade coal and gas-fired generation plants to augment existing supply. and (6) funding sources. and statistical capacities of ministries through regular training and the hiring of technically competent staff. Prepare and Implement a Least Cost Power Expansion Plan for Power Sector Development Short. (4) strategies to address identified needs. and produced according to international standards and methodologies. medium. Promote the development of renewable power sources. Encourage research and development efforts on renewable energy and facilitate development of appropriate technologies. wind. It may be noted that master plans for power and rural electrification have already been completed and are for implementation. and timely information database that will be available to policy makers and the public. and solar power. Promote decentralized power generation to reduce energy losses and delivery cost. Medium. Hold stakeholder consultations to better understand constraints in the sector and to gather support for needed reforms. Enhance the planning. namely hydropower. Rehabilitate and upgrade existing transmission and distribution lines. (2) projection of short-. .to long-term measures (i) (ii) Implement the power sector reform plan and monitor progress of implementation. (3) an assessment of infrastructure capacity building needs.Power Sector Development in Myanmar | 21    Map potential renewable energy projects and prioritize them appropriately. biomass. Start the construction of the high voltage (500 kV) transmission line to improve efficiency of the system. Develop new sources of generation. relevant. (5) estimates of investment requirements.to long-term measures (i) (ii) B. which should include (1) an assessment of performance of current power infrastructure. Estimate corresponding investment requirements.

The country’s infrastructure development has lagged considerably behind. (ii) Implement international standards in operating generation. (iii) Improve the implementation of energy efficiency and conservation measures. D. the government adopted the policy of achieving full electrification by 2030 to be delivered by a commercially operated power industry using private and public sector resources. This section estimates these financing needs.  Collaborate with local communities in developing and implementing rural electrification programs. (iv) Rationalize the use of the least efficient generating equipment.  Build capacity to implement energy efficiency and conservation regulations. Augment Investments in the Power Sector (i) Tap the private sector and promote public–private partnerships. Aim for Sustainable Electrification (i) Conduct regular scheduled maintenance activities of power plants and the grid system to improve efficiency. DEMAND AND INVESTMENT GAP IN MYANMAR POWER INFRASTRUCTURE Economic growth in Myanmar is expected to average at least 6. . (iii) Reform electricity subsidies. mini and microhydropower. This will raise demand for power or electricity services for consumption and production. Failure to respond will constrain growth and slow poverty alleviation. making it important to estimate the demand for electricity that will result from the expected growth in income. Consider increasing the electricity tariff for industrial users and households with high electricity consumption. wind. 460 C. transmission. ensuring a more targeted system. and distribution systems to improve efficiency and mitigate negative environmental impacts. Promote rural electrification.8% a year in coming years. ADB has initiated work on public–private partnership framework development with the MOEP. Commendably.22 | ADB Economics Working Paper Series No. Improve Access to Electricity (i) (ii) VII. and solar energy systems for rural areas.  Secure technical and financial assistance from development partners to aid in the development of an effective energy efficiency program. biomass.  Develop off-grid. Secure access to electricity of poor households through electricity assistance mechanisms (such as direct cash transfer.  Ensure effective implementation of demand-side management plans to enhance energy efficiency. Expanding basic power-related infrastructure to address additional electricity supply will require huge capital investment. given potential and the interest it has garnered from investors all over the world. E. (ii) Rationalize the tariff structure to reduce fiscal burdens and to improve the financial sustainability of power generation. provision of energy coupons) that will target vulnerable households only.

Thus.500 are reduced standard unit costs for power. Moreover.500 Unit Per kilowatt of generating capacity including associated network cost a As point of reference. b High-growth scenario refers to 13% average growth rate for installed capacity for the power sector. Note: Following Fay and Yepes (2003).5 1. projections of installed capacity up to 2030 are based on ADB estimates in collaboration with the MOEP in Myanmar. To compute the investment gap. Results Based on the projected stock levels for the power sector.4 GW = gigawatt. B.900 per kilowatt of generating capacity.2 17. Its projections are based on gross domestic product (GDP).Power Sector Development in Myanmar | 23 A. unit costs based on most recent best practice prices are applied to the infrastructure flows. including associated network cost (Fay and Yepes 2003). population. Since this cost may be outdated given advancement in technology.4 5.3 782. the unit costs of $1.7 Gigawatts in 2010 (GW. or the change in infrastructure stock levels (Table 11). urbanization.9 3. the standard unit cost of power infrastructure services is $1.029. adjustments may be necessary. Source: ADB estimates using Fay and Yepes 2003. and crude oil prices.2 188. Source: ADB calculations. calibrated from power generation.3 19. . Table 12: Need Gaps from Projections of Power Infrastructure Stock Levels with Baseline Stock of 1.2 15.0 235.7 4. The high-growth scenario has an average annual installed capacity growth rate of 13%.0 13.000 and $1. a Low-growth scenario refers to 12% average growth rate for installed capacity for the power sector. which represent the low-growth scenario averaging an annual installed capacity growth rate of 12%. Methodology and Data The demand gap is measured as the difference of projected infrastructure stock level and the current stock of infrastructure. Table 11: Unit Cost of Power Infrastructure Servicesa ($) Low 1. unless otherwise indicated) 2020 Low-growth scenarioa Stock Gap Change from 2010 (%) High-growth scenariob Stock Gap Change from 2010 (%) 2030 4. replacement costs are assumed to be 2% of the total stock value of power infrastructure. costs of maintenance and replacement of total capacity are also projected in the covered period. The investment gap measures the investment requirement of the future new capacity and replacement of existing infrastructure. Table 12 presents projected demand up to 2030. For the power sector.000 High 1.

Myanmar needs to invest $320 billion or $16 billion per year in infrastructure.2 0. High growth scenario refers to 13% average growth rate for installed capacity for the power sector. At the same time.2 Using High Unit Cost Annual 2014–2030 Average 22. This annual increase in power infrastructure spending is equivalent to 2. since Myanmar may not be able to mobilize domestic resources to fund these projects. investment gaps for infrastructure (inclusive of power.7 1. around $19. demand will increase 1. power plants.3 times in 2030 under the high GDP growth scenario.24 | ADB Economics Working Paper Series No.9 19. This is why private sector financing is very important. 2014–2030 ($ billion) Low-growth scenarioa High-growth scenariob Using Low Unit Cost Annual 2014–2030 Average 15. a huge challenge. transport. The empirical study here yielded more or less similar results as other projections of Myanmar’s infrastructure requirements. For example.0% of GDP based on 2012 GDP level of $55. Under the high-growth scenario.10 About $2 billion in power investments is currently under implementation. 10 11 In this Myanmar study. and road and rail networks. With this amount.7 billion annually will be required. b To become competitive and expand its production networks.3 29. Source: ADB calculations. .2 billion to $1. To attract private sector financing. 460 Based on the 2010 levels of power infrastructure stock. water treatment plants. amount to $21.6 1.7 billion to $29.2 billion to $22.7 billion.9 billion to $1. about 58% is needed for power (Bhattacharyay 2010).7 billion for 2010–2020 or $2 billion per year. it is important for the country to develop innovative financing mechanisms and modalities to be able to fund these huge requirements. or $1. Myanmar’s investment gap is $15. transport. translating to around $0.7 1. Table 13 presents investment gaps for new capacity and replacement needs in the power sector. between 2010 and 2030. During 2014–2030. and institutions that manage these infrastructure sectors such as power are able to efficiently contribute to the country’s output. these power projects need to be translated into financially viable and bankable projects.11 But the above estimates do not include the financing requirements needed for operation and maintenance of new infrastructure projects. Myanmar’s total estimated investment needs in power.6 billion. excluding internet but including water and sanitation.9 times in 2020 and 7.3 billion annually under the low-growth scenario. Nevertheless.4 times in 2020 and 10. which includes residential and commercial real estate. despite some differences in sectors selected.8 times in 2030 under the low GDP growth scenario and 2. Myanmar will need adequate and efficient supply of electricity. and information and communications technology sectors) could total as much as $80 billion by 2030. if the economy is to achieve 8% growth a year.7 a Low growth scenario refers to 12% average growth rate for installed capacity for the power sector. Table 13: Power Investment Gaps from New Capacity and Replacement Needs. telecommunications.8 billion (IMF 2014). the government is responsible for ensuring that policies and the regulatory environment remain stable.1%–3. Per McKinsey Global Institute (2013).

From WEF. as well as approving electrical connections for businesses and industries (this may change with the approval of the new Electricity Law). ADB. and Accenture 2013. 6.APPENDIX 1: ENERGY-RELATED GOVERNMENT INSTITUTIONS AND THEIR RESPONSIBILITIES1 1. and environmental standards and safeguard requirements. 3. 2. . Ministry of Industry: energy efficiency and off-grid rural energy access (it contains the Rural Energy Supporting Development Committee). 1 Ministry of Environmental Conservation and Forestry: fuel wood. but not social ones. climate change. Ministry of Mines: coal production. Ministry of National Planning and Economic Development: takes part in the formulation of national development plans and contributes to the economic development of the state. Ministry of Agriculture and Irrigation: biofuels and microhydropower for irrigation purposes. Ministry of Science and Technology: research and development related to renewable energy technologies. 5. 4.

26 | Appendixes APPENDIX 2: MYANMAR’S TRANSMISSION SYSTEM kV= kilovolt. . Source: Ministry of Electric Power as presented in ADB 2012a.

621.93 2.771.86 80.675.117.16 6.66 4.352.21 82.22 1.33 5.92 2.881 133.24 6.64 5.29 1.608.79 26.164.68 1.94 3. Source: Central Statistical Organization 2011.36 6.618.78 .630.37 3.18 4.09 4.71 25. Note: Electricity production is estimated at 10 terawatt hours in 2011–2012 (WEF.267.262.993.940 111.49 0.78 6.909.221 13.701.27 8.163.20 2.00 138.14 1.84 1.57 62.06 22.98 155.892 1.36 114.38 81.75 101.15 6.354.16 1.08 Cost of Production (MK’000) 812.941.157.438.437.99 4.715.625. and Accenture 2013).75 1.747.21 1.643.Appendixes | 27 APPENDIX 3: PRODUCTION OF ELECTRIC POWER Year 1990–1991 1995–1996 2000–2001 2004–2005 2005–2006 2006–2007 2007–2008 2008–2009 2009–2010 2010–2011 Generation (GWh) 2.398.007 GWh = gigawatt-hour.28 1.936 125.064.964.762.362.610.648.727.703.77 25.767. Unit Cost (MK) 0.17 26.18 153.336.26 4.81 Departmental Use (GWh) Net Production (GWh) 33. ADB.312.855.05 3.627 9.76 6.47 3.821.11 Unit Loss (GWh) 934.341 22.809 99. MK = kyat.02 6.959 162.

0 370.5 0 14.45 3 x 18.0 300.0 2.0 120.28 | Appendixes APPENDIX 4: ELECTRICITY PRODUCTION BY TECHNOLOGY Type Hydropower Power Station Baluchaung BHP (1) Baluchaung BHP (2) Kinda Sedawgyi Zawgyi (1) Zawgyi (2) Zaungtu Thaphanseik Mone Paunglaung Ye’new Khabaung KengTawn Shweli (1) Yeywa Tapein (1)b Shwegyin Kun Kyee ON Kyee Wa Location Kayah Kayah Mandalay Mandalay Shan Shan Bago Sagaing Magwe Mandalay Bago Bago Shan Shan Mandalay Kachin Bago Bago Magwe Operation Start Date 1992 1974 1985 1989 1995 1998 2000 2002 2004 2005 2007 2008 2008 2008 2010 2011 2011 2011 2012 Installed Capacity (MW) 2 x 14 28.0 630.0 38.0 134.946.0 2 x 10 20.0 377.0 70.6 60.0 300.3 3 x 33.0 6 x 100 600.5 300.0 50.0 262.0 12.35 70.660.7 44.0 6. The total capacity of gas at 714.0 3 x 25 75.8 75.2 97.0 4 x 18.5 31. the sector also has 63.25 1 x 18.0 13.0 4 x 60 240.45 2 x 16.2 1.022.0 238.550.2 91. a Capacity as of August 2012.9 34.0 165.72 MW biomass. All these sum up to 3.0 5.25 2x6 MW = megawatt.0 Firm Capacitya 140 20.0 3 x 18 54.0 175.0 15.0 Subtotal hydropower Coal-fired Subtotal coalfired Tigyit Gas turbine Kyunchaung Mannc Myanaung Magwe Magwe Ayarwaddy Shwedaung Ywama Bago Yangon Thakayta Yangon Ahlone Yangon Hlawga Yangon Thaton Mon Mawlamyaing Mon Subtotal gas turbine Total Shan 2005 1974 1978 1975 1984 1984 1980 2004 2004 1990 1997 1995 1999 1995 1999 1985 2001 1980 2 x 60 3 x 18.0 714.0 2x6 12.495.4 3 x 19 1 x 35 3 x 33.561.5 25.3 1 x 54.0 190.0 990. .0 2 x 37 74.0 30. Source: Ministry of Electric Power as presented in ADB 2012a.814.5 25.0 30.95 40.0 26.9 MW includes steam of 165 MW.0 427.3 1 x 18.45 1 x 24 1 x 9.3 1 x 54.0 3x6 18.45 2 x 18.3 36.0 6 x 28 168.190.0 4 x 70 280.0 2 x 12.0 1.0 20.2 3 x 20 60.0 68.0 30.02 MW oil and 3.958.0 26.0 117.0 154.0 0 200.0 3 x 10 30.8 120.0 92.0 3.0 55.0 2 x 15 30.0 190.5 568.0 2 x 12.0 4 x 197.0 17.0 76.9 3.0 120.0 1.0 54.267.0 911.0 35.0 Annual Production 200.0 20.0 3.45 1 x 16.0 35.0 990.0 15.0 123.0 1.5 790.495 MW above. b Temporarily out of service.0 2 x 28 56.065.504.1 2 x 18.74 MW.6 4.2 330.7 600.3 36.7 600. Notes: In addition to the 3.0 3.0 12.0 154.0 15.0 38. c Production stopped in 2005.

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greater accessibility. grants. The paper also estimates infrastructure demand and the corresponding investment requirements to narrow the supply gap in the power sector. it remains home to the majority of the world’s poor. guarantees. ADB is committed to reducing poverty through inclusive economic growth. Its main instruments for helping its developing member countries are policy dialogue. About the Asian Development Bank ADB’s vision is an Asia and Pacific region free of poverty. especially for the poor and disadvantaged. including 48 from the region. Philippines www. and regional integration. ADB is owned by 67 members.adb. Based in Manila. equity investments. and affordability.Power Sector Development in Myanmar This paper assesses Myanmar’s electricity sector and recommends several concrete policy options to enable government to address issues such as supply security. Despite the region’s many successes. environmentally sustainable growth. AsiAn Development BAnk 6 ADB Avenue. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their people.org . loans. Mandaluyong City 1550 Metro Manila. and technical assistance.