Although electricity generated by natural gas is expected to rise, Myanmar is planning to continue implementing large hydropower projects such as the Myitsone Dam project to meet the country’s electricity needs, U Khin Maung Win, Deputy Minister of Electricity and Energy, told Pyidaungsu Hluttaw on July 27.
The deputy minister was responding to a point raised by Amyotha Hluttaw MP U Kyaw Ni Naing, from constituency no 11 of Shan State. The MP suggested that the development of projects like Myitsone should recommence so that Myanmar can distribute adequate electricity to the people and that negotiations should continue between the government and local residents to ensure as little impact on livelihoods and the environment as possible.
“Myanmar is rich in hydro resources and the cost of production is low compared to other sources of power. When some of the large hydropower projects in Myanmar are complete, the country can reduce its reliance on gas and coal-fired power plants, which is more expensive. These plants can be used as reserves or respond to the country’s needs on demand,” said U Khin Maung Win
In fact, the ministry forecasts that hydropower will comprise just 37pc of the country’s energy mix in fiscal 2020-21 compared to 61pc in four years ago. In comparison, close to half the electricity generated in the country will be powered by natural gas in 2020-21, compared to 35pc four years ago.
In early 2018, agreements were issued for the first three LNG power plants with a combined installed capacity of 900MW in Myanmar. The tenders were awarded to Hong Kong’s VPower Group in October 2019. Two out of the three plants located in Thalyin and Thaketa in Yangon commenced production this year. The third plant is in Kyaukphyu in Rakhine. .
Last week, Myanmar and Japan also signed an agreement to build a 1250MW LNG plant worth up to US$2 billion in Yangon’s Thilawa Special Economic Zone. Marubeni, Sumitomo Corp and Mitsui & Co were given the green light to proceed with constructing the plant under a joint venture with a Myanmar consortium
consisting of local conglomerate Eden Group and the government.
There is currently also one coal-fired power plant with the capacity to generate 120MW of energy and a solar power project generating 40MW of energy. The government is in the process of evaluating a tender for the construction of 30 ground-mounted solar plants capable of generating 1060MW of power.
In anticipation of higher costs of production, the government last year reduced electricity subsidies by over 77pc to ensure more budget sustainability. Subsidies were reduced from K35.4 per unit in fiscal 2018-19 to just K7.9 per unit in 2019-20, U Khin Maung Win said. In Myanmar, 43pc of electricity users are households and 57pc are business or non-household users. The price per unit for households is K 92.37 per unit and K 151.8 per unit for non-household users after the changes were made.
Electricity is being distributed in Myanmar by the Electricity Supply Enterprise, Yangon Electricity Supply Corporation and Mandalay Electricity Supply Corporation. These three organisations had to pay K52, K60 and K55 per unit in the past but are now paying to K100, K110 and K55 per unit of electricity distributed.