Can wind, sun and hot springs solve Myanmar’s electricity crisis?

Renewable energy resources offer Myanmar a cheaper and more cost-effective way out of the country’s dire electricity shortages than coal or gas and diesel, an international business analysis company believes.

“Power supply is one of the biggest hindrances for economic progress and foreign investment to Myanmar… Since the beginning of the year, manufacturers in Yangon and Mandalay have complained that electricity shortages due to drought were causing operating costs to increase and putting the viability of some industries in the cities at risk,” says Business Monitor International (BMI) in a study on the country’s energy problems.

It notes that Myanmar is over-reliant on hydro-dam systems on rivers and other water-flow systems, most of which are under-productive during the dry season.

Wind and solar “farms” offer more reliable and less costly alternatives, said London-based BMI.

“The country is heavily reliant on hydropower for electricity generation – 70 percent in 2010 – and this reliance has grown in recent years. However, the country experiences several dry periods throughout the year. This resulted in lower utilisation rates for hydropower capacity, exacerbating the existing energy shortage.

“Meanwhile, the share of gas used in power generation has fallen from 62 percent to 31 percent, primarily due to the fact that gas supplies are being targeted for lucrative exports to Thailand and China.

“By developing wind energy, the government could reduce its reliance on hydropower, as well as free up more natural gas for exports.”

Provisional agreements have been signed with Thai and Chinese firms to develop or assess potential to develop both wind and solar power projects in several areas of the country.

Green Earth Power of Thailand signed a deal with the Ministry of Electric Power to build a 50 megawatt (MW) project at Minbu 300 kilometres north of Yangon. It is scheduled to be completed for operation by late 2015, said a report in the official newspaper, The New Light of Myanmar, last week.

Meanwhile the US firm ACO Investment Group of New York signed a deal with the ministry for a 250 MW solar project also in central Myanmar, at Nabu-aing near Mingyan.

Both plants are earmarked to hook into the country’s electricity grid, which mainly operates in a corridor between Yangon and Mandalay.

Earlier reports had said Green Earth was planning a much bigger project of 210 MW at a cost of US$275 million.

No reason for the reduction in size of the Green Power project was given by the newspaper. However, financial difficulties this year have prevented construction of several planned new power plants, the Minister of Electric Power Khin Maung Soe told The New Light of Myanmar in a separate report last week.

“Distributed solar energy generation has the potential to be more cost-effective and robust than other forms of distributed generation, particularly diesel generation, BMI said.

The minister admitted that Myanmar is currently suffering an electricity capacity shortfall of more than 5,000 MW, the worst gap in supply and demand since the country began opening up two years ago.

Electricity demand is 8,929 megawatts but capacity this year is only about 3,600 MW, the minister said. About half of Myanmar’s generating capacity comes from hydro-dam systems which under perform in the dry season. The government has said it is trying to diversify energy resources to reduce dependency on hydro-dams.

Another Thai company, Gunkul Engineering, and the China Three Gorges Corporation, are separately conducting feasibility studies for wind power plants in several regions of Myanmar.

Only about 25 percent of Myanmar’s population of around 55 million has access to mains electricity and this is often limited to a few hours per day.

At present, China Three Gorges (CTG) is conducting surveys in Chin and Rakhine states as well as Ayeyarwady and Yangon regions, while Gunkul Engineering is assessing the feasibility of wind power in Mon, Kayin, Shan and Kayah states and Tanintharyi Region.

“According to Khin Maung Win [deputy director general of Electric Power under the Ministry of Electric Power], Gunkul and CTG are planning to build wind power plants with a total capacity of 2,930MW and 1,102MW respectively,” said BMI in its assessment of Myanmar’s energy problems.

“The feasibility studies are scheduled to take one to two years “so that both companies can accurately determine the amount of wind potential and optimal locations for projects.”

However, nothing is going to happen very quickly, leaving the country dependent on rainfall for hydro-dams and diesel generators in the short term.

The Thai company has suggested it could have its wind projects operating by 2015, reaching maximum electricity generating capacity by 2018.

But BMI thinks it’s worth the wait: “We believe that the decision by CTG and Gunkul to develop wind energy in Myanmar is a strategically sound move. The country faces a clear deficit in electricity generation.”

Separately, the Singapore firm Emerging Markets Energy Limited has undertaken a project to search for underground geothermal energy in several areas of the Myanmar.

The firm said it will carry out research into whether there is sufficient energy from underground hot rocks and hot springs to harness the energy for electricity generating projects. The research is being focused in Shan state, Tanintharyi, Sagaing, Magway and Mandalay regions, the Singapore firm said.