Stimulating developments in renewable power generation, particularly hydropower

As Myanmar works to promote renewable energy to complement its insufficient electricity supply, new opportunities within the sector have opened up for foreign investors who can help to boost the country’s power generation. In November 2014, the US-based ACO Investment Group announced that it was developing two 150-MW solar energy plants in Myanmar, valued at $480m. The plants are expected to contribute about 10-12% of Myanmar’s power generation upon their completion in 2016.

Natural Resources

The Ministry of Science and Technology is responsible for research and development into renewables. The ministry's policy is to have 15-20% of its energy be supplied by renewables by 2020. In doing so, Myanmar’s vast natural resources have allowed it to capitalise and tap into available renewable energy resources, particularly solar, wind, small hydropower, geothermal and biomass, with new investments being pumped into this sector, especially hydropower and solar resources.

In the past, the generation of renewable energy was confined to rural villages and settlements. Private providers and state agencies pioneered the generation of renewable energy for local villagers, as power generated from diesel-powered generators was sold at a high price to locals. NGOs later started providing renewable energy supply at a more affordable rate, while private enterprises, some of whom were backed by foreign investors, also started developing a solar power supply chain for villagers.

Solar Suppliers

At present, other than a limited number of commercial ventures undertaken by foreign companies, the country’s solar energy suppliers are generally small enterprises catering to local areas. Two solar power technologies are currently in use: solar photovoltaic technology, which is used as a light source; and solar thermal technology, which is used as a heat source – albeit to a far lesser extent. Photovoltaic power systems can be used to electrify rural areas that are not linked to the national grid, which benefits schools, universities and clinics. However there is a growing private market in rural areas for solar energy. “Myanmar needs a lot of improvement in the commercial application of solar renewable energy,” U Aung Myint, the general secretary of Renewable Energy Association Myanmar (REAM), told OBG. REAM is involved in providing affordable solar energy to cater to basic grassroots needs, with their cheapest panel costing MMK2000 ($2) per month for 12 families and supplying power for four hours per day.

Tapping Potential

With access to four main river basins, hydropower potential is currently estimated to be at more than 100,000 MW. Indeed, a World Bank study in 1995 demonstrated that Myanmar’s rivers could potentially host 266 dams with a total output of up to 108,000 MW. That compares to the 20 dams that were operating as of 2013 with a total capacity of 2780 MW. While more than 73% of Myanmar’s electric supply is generated from hydropower plants, renewable energy is also being tapped using micro-grids and turbine generators.

According to the Ministry of Energy, these off-grid power sources can contribute to local electrification, as in Paletwa township, where residents can now have access to electricity for 24 hours a day through a diesel generator station with an output of 75 KW that operates for three hours per day. The majority of hydropower potential is found in the eastern regions of Myanmar, in Kayin State (with a potential of 17 GW), Shan State (with a potential of 7 GW) and Kayah State (with a potential of 3.9 GW). Moreover, in May 2014, the Ministry of Electric Power (MOEP) granted approval to local company Asia World and China's Hanergy Group Holding to develop a 1400-MW hydropower plant along the Thanlwin River.

Joint Ventures

This plant is one of the 32 hydropower plants which MOEP will construct in joint ventures with foreign companies, most of which are Chinese firms. Following this, in November 2014, the Norwegian Water Resources and Energy Directorate offered to provide hydropower consultancy services to the Myanma government. The government is in need of expertise as it hopes to utilise the hydropower energy to generate around half of its power supply in 2016, with the remainder coming from other sources, including solar panels and coal.

Biomass Sources

Long before advances in technology helped devise solar energy and hydropower resources, rural villagers in Myanmar had found their own source of energy in biomass, which was able to generate energy for a limited use. Such biomass energy generation was both relatively cheap and also had minimal adverse effects on the wider environment. Biomass sources used include fuel wood, charcoal, agriculture residue and animal waste.

Moreover, the government is currently studying rice husk gasification technology to generate renewable energy. As it stands, rice mills are using husks as fuel to generate steam for steam engines. Biomass energy matters fall under the purview of the Ministry of Environmental Conservation and Forestry, and the Ministry of Agriculture and Irrigation. According to these ministries, there are 21 potential biomass energy sources available throughout the country: bioethanol (sugarcane, maize, cassava, sorghum, sweet sorghum, potato, toddy palm, nipa palm, root crops); 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); and biogas (livestock wastes). According to government reports, although the raw materials were easily available, the number of biogas plants that could generate power in a large quantity remained small in number, largely due to the high investment cost. Biomass energy is generally used on a small scale in rural areas, and plants do not have the capability to absorb high technological methods to produce extra energy.

Wind Energy

On top of this, Myanmar is in the process of promoting wind energy and is seeking investors to develop this energy source. Among the small wind farms currently in operation are a 1.2-KW wind turbine in Kyauske Township, a 1.2-KW plant at the Government Technical High School in the Ayeyarwaddy region and a 3-KW wind turbine that belongs to the Ministry of Science and Technology. In late 2013 power producers from China and Thailand revealed that they were doing feasibility studies for generating windmill-generated electricity in nine locations across Myanmar. According to MOEP, Thailand's Gunkul Engineering Public Company will generate 2930 MW in its plants while Three Gorges Corporation of China aims to have a capacity of 1102 MW. The farms are expected to be operational in 2015 and will reach their maximum capacity by 2018.

The government has also identified 93 geothermal locations throughout Myanmar, with the Electric Power Development Company of Japan playing a role in testing these sites. Singapore-based Emerging Markets Energy has started to conduct a feasibility study for the development of geothermal power plants in Shan State and the Tanintharyi, Sagaing, Magway and Mandalay regions. MOEP stated that the Chindwin River in the Sagaing and Magway regions, Mount Popa and Singu Hill in the Mandalay region and hot springs near Maungmakan Beach in the Tanintharyi region have the best prospects for power generation through geothermal. Despite Myanmar’s promise, however, several challenges continue to stand in the way of renewable energy achieving its full potential.

Notably, the lack of a proper legal framework, limited finances and a shortage of trained personnel have all combined to hinder the development of the sector, according to the Asian Development Bank. “There is no legal clarity and no proper process in place. It is risky and does not aid the government’s image,” Allen Himes, managing director of Indigo Energy, told OBG. There is no proper regulatory regime, and there also remains a need for greater legal clarity as well as increased inter-governmental cooperation to properly handle the generation of renewable energy.

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The Report: Myanmar 2015

Energy chapter from The Report: Myanmar 2015

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