One of the major challenges facing Myanmar when developing its economy and attracting new investment is insufficient access to electricity. And, as the economy continues to expand, the demand for power is also increasing.
Holding up progress
There is no doubt that the lack of access to sufficient power has slowed down progress for many businesses across the country. This has pushed electricity up the government’s agenda.
With the Myanmar National Electrification Plan (NEP), the government aims to achieve complete electrification of the entire country by 2030. This involves reaching a total of 24,000 MW of capacity for generating electricity. This obviously needs huge investments in infrastructure within the power sector.
Five times current capacity
The urgent need for investment is because the target is around five times more than the current capacity. And, in the meantime, demand for electricity is constantly increasing. So far in 2017, demand has hit a peak of 3,000 MW.
So, is the government’s goal achievable? While coal has been recommended as a source of power, there have been no projects approved so far. In addition, most of the hydro-power projects have been put on hold due to environmental and social concerns.
The LNG option
The government’s most likely option for the main source of power to the country is gas. However, production in the gas fields of Myanmar has also been declining. While there have been some discoveries recently of gas fields, it will take at least a decade for these to become operational.
Some experts have pointed towards liquefied natural gas (LNG) as a temporary measure to fill the power gap, saying: “We can buy LNG to power up the infrastructure here and do this for ten years, and once domestic gas production is up again, we can just stop buying LNG and switch to the natural gas that we have produced.”
LNG business committee
In 2016. Myanmar Oil and Gas Enterprise launched an LNG business committee to explore these options. Allegedly major oil companies such as Total and Shell have initiated talks with the government regarding LNG tenders, but nothing has yet been announced.
While LNG is being looked at as an option for the medium to long term, for the short term some believe that nearby existing power plants should be used to generate gas and power urban areas.
There is a consensus that the Ministry of Electricity and Energy needs to increase the amount of power across the entire country.
There are two main options for using LNG. The first lies in importing it, and the second is converting gas to power.
In the future, it’s expected that private contributions towards energy will increase. For example, figures in 2014/15 show that state-owned power generation was around 65% with the private sector providing 35%. By 2016-17 this was 50/50. In order to reach the goal of 100% electrification, it needs to be a joint effort by the government and private sector.