Turning on the lights: Establishing a stable supply is crucial as the country is at the centre of plans for a regional power grid

New projects are welcome given the country’s weak domestic grid and isolation from regional power supplies. With the exception of electricity being sold across the border to China, Myanmar is largely cut-off from its neighbours. While its main grid may lack connections to others, the country is in a very good position to begin linking up with regional power systems. The development of a cross-border electricity trade could do a lot to alleviate domestic power problems and at the same time possibly lead to exports.

The trend toward regional grids and cooperation in power is on the rise. For years, Asian countries were reluctant to trade in electricity; now they are actively looking to establish the necessary infrastructure and the regulatory underpinnings to encourage a freer flow of power. Countries have gone from keeping their domestic electricity markets relatively closed, or simply buying what they need from other countries, to enthusiastically seeking to develop a large and efficient transnational market in power.

At the moment, a number of Asian grids are being discussed and planned, and Myanmar stands to benefit. Some of these power networks will be extended to Myanmar, and in some cases, because of where the country is located, the networks will need Myanmar’s participation. It is very much at the crossroads of Asia in terms of power and for this reason alone it must be included in many of the larger proposals.

The Bigger Picture

Some rather imaginative proposals have been suggested. The Asia Super Grid Initiative, sponsored by the Japan Renewable Energy Foundation, involves connecting Japan and India, as well as everything in between, passing through Russia, Mongolia, South Korea, China, the Philippines and Indonesia. Myanmar will also play a vital role as the grid must cross its territory in order to connect India to South-east Asia. The even more ambitious Pan-Asian Energy Infrastructure, which proposes much of the same with the addition of sun-rich areas of western China and Australia, also includes Myanmar. The Asia Energy Highway, a more modest plan, envisions using high-voltage direct current (HVDC) transmission lines to connect existing grids in Australia, South-east Asia, China and Japan, includes a spur line to Myanmar.

In addition to some of these grander visions, which may or may not result in any real infrastructure being completed, a number of intermediate and ongoing projects are under way that will almost certainly bring Myanmar into the transnational grid. ASEAN is pushing towards the development of a single market for electricity by 2020 – and some are suggesting an earlier date is possible given that many necessary links already exist. Cross-border connections have been made between Vietnam and Cambodia, Thailand and Laos, Thailand and Cambodia, Thailand and Malaysia, and Malaysia and Singapore. A connection between Thailand and Myanmar has already been discussed, and the Thai government has committed to developing five hydro plants in Myanmar and importing power.

GMS, China & India

In addition to ASEAN initiatives, is an effort to create a Greater Mekong Subregion (GMS) grid, which will also include China. The GMS includes countries through which the Mekong River flows, namely, Cambodia, Laos, Myanmar, Thailand, Vietnam and Yunnan province in China. This plan has support from the Asian Development Bank and all the member countries, and Myanmar has been central to the development of the programme since the beginning. The Subregional Electric Power Forum meeting, which marked the first time all six countries met to cooperate in this sector, was first held in Yangon in 1995.

Independent of all of these initiatives, China is also working to become better integrated with the electricity grids of all of its neighbours. It has already started trading power with Myanmar, Laos and Vietnam, primarily buying from Myanmar and selling to the other two. China hopes to better link Yunnan province with South-east Asia in terms of transportation, resources and trade. The development of a cross-border grid is just one element of this larger, long-term strategy.

Meanwhile, India is hoping to push east and has already made headway in that respect. In October 2013 an HVDC line running from the eastern grid of India to the western grid of Bangladesh came on-line. More connections could be on the way. India has proposed extending an HVDC line into Nepal and Bhutan. It has also discussed expanding its network to Pakistan and Afghanistan in one direction and to Myanmar and the rest of the ASEAN in the other direction. With China making headway on one side and India on the other, Myanmar could find itself as the key link between two major Asian powers. Without or without the mega Asian grids, most of the component parts of these grids appear to be developing on their own, and Myanmar is participating in one way or another.

Challenges

Realising these plans will not be easy, even the more simple proposals. Potential challenges include technical, institutional and political issues. Disparate grids have to be connected and synchronised, pricing and service agreements have to be figured out and age-old disputes have to be solved or set aside. Desertec, which was intended to link Europe with alternative energy sources in North Africa, failed in 2013 as it was unable to overcome challenges of this sort.

And the fact is, while much has been discussed and work has been done, the work accomplished so far is relatively unsophisticated. Most of the trading is done via medium-voltage lines and only one high-voltage connection exists between Nam Theum 2 hydropower plant in Laos and Thailand. Indeed, most of the electrical lines flow one way. The agreements developed so far are bilateral, but they are primarily agreements to purchase. The region has yet to bring about a real open trade of electricity or to create a real market in power. Institutionally, the countries in the region are far from ready. None have true free power markets internally, so trading of electricity would be complicated should trading be opened up to foreign partners.

For Myanmar, the main issue is the fact that its domestic grid is not ready to take full advantage of outside connections. The country does have generation problems, so having access to Thai, Indian or Lao power sources will be helpful, but it also has distribution issues. It needs to get its own grid working as it makes connections with larger markets if those connections are going to address the country’s overall power needs.

Positive Developments

The attitude toward regional power linkages in Asia has evolved over time, and nations are now coming together in a more positive way. Connections were first discussed, especially by Thailand, as a way of getting cheap and abundant electricity from neighbouring countries, especially those where environmental restrictions would not prevent the building of new large-scale hydropower plants. However, attitudes have shifted. Countries are now looking to build grids that maximise the use of overall resources regionally and allow electricity to move freely to meet changes in supply and demand over time. The projects are now more about participating than simply acquiring supply, and this suggests that projects, big and small, have a better chance of succeeding and ultimately operating in a sustainable manner.

This is especially the case when it comes to Thailand and Myanmar. The earlier memorandums of understanding regarding hydropower were signed when the former was growing rapidly and was simply looking for sources of cheap abundant power. Now, Thailand sees its future in places like Myanmar and knows that without power that country’s economic growth will be slowed. Myanmar is no longer simply a source, but an economy on which the region’s future is dependent.

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The Report: Myanmar 2014

Energy chapter from The Report: Myanmar 2014

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