The World Bank has published its “In the Dark: Power Sector Challenges in Myanmar Report”. The full document is available here.
Key information from the report is summarised below:
Electricity blackouts
The report notes that amid severe power cuts in Myanmar, particularly during the January-May dry season, no additional capacity is expected to come online, and therefore the authorities plan to ration electricity with a mix of planned load shedding and unplanned system breakdowns.
When demand for electricity nears available supply levels, load shedding has been continuously spread throughout a 24-hour period, the report says.
On December 31, 2022, for example, 26% of total electricity demand in Yangon went unserved.
At 13:00, load shedding represented 37% of electricity demand, including 800 MW of planned loadshedding, and 147 MW and 331 MW of unplanned frequency control in Yangon and outside Yangon, respectively.
All graphics sourced from the World Bank.
The report further notes that December is not a period of frequent power shortages as dam reservoirs have sufficient water levels and winter temperatures lower the need for air conditioning, however, the magnitude of load shedding gradually increased toward the end of 2022.
Coping mechanisms
The report notes that according to a firm survey conducted in December 2022, 54% of surveyed firms reported that power outages had been disruptive to their business operations in the past three months
Among the firms that responded to the outages:
- 91% invested in diesel generators
- 22% invested in off-grid power systems such as solar or micro-hydro
- 11% reduced operating hours
Firms that have not taken any measures plan to reduce operating hours or invest in diesel generators to cope with power outages.
Nighttime lights (NTL)
According to World Bank analysis of satellite nighttime lights data, large parts of Yangon have emitted less light in 2022 compared to 2021, demonstrating declining economic activity. The downward trend is visible in most parts of the city, including Downtown and industrial areas (Hlaingtharyar, Shwepyitar, Mingalardon, Thilawa).
NTL data for industrial areas further shows industrial zones saw their NTL radiance significantly dimmed in 2022 after several years of rapid growth.
By contrast, NTL of the border zones increased in 2022 due to increased business activities at border trade posts, which the World Bank said may be powered to cross-border electricity transmission.
Electrification slowdown
The report notes a significant slowdown in increasing access to electricity and that more than four million households remain without access to electricity.
Before the military takeover, the national electrification program had increased access to electricity from 39.1% in September 2017 to 57.9% in November 2020, or on average 6% per year at the household level, by attracting private sector financing in power generation and increased public investments in transmission and distribution systems development.
However, from the latest available data in December 2021, the household electrification rate was only 61.6%, an increase of 3.7 percentage points over one year.
Power generation mix
The report notes that total installed generating capacity increased from about 2,800 MW in 2010 to 7,100 MW in 2022.
As of December 2022, natural gas accounts for 50% of the total installed capacity (3,567 MW), followed by hydropower at 45% (3,225 MW), ground-mounted solar for 3% (192 MW), and coal for 2% (138 MW).
Currently, natural gas-fired power plants supply the baseload, while hydropower is used for daytime peak load.
Most gas-based generating capacity is in Yangon, including the country’s only two LNG-to-power plants. The remaining are in Mandalay, Bago, Magway, Mon, Rakhine and Ayerawaddy.
Hydropower generation is concentrated in Shan, Kayah and Kachin states, with smaller units in Bago, Magway and Sagaing regions.
The report notes that the authorities have recently tried to mitigate the drop in gas generation by ramping up hydropower generation, but the results have been mixed. The amount of hydropower production increased in 2022 compared to 2020 but failed to recover to 2018.
In Q4 2022, hydropower output was one-third of Q4 2018 levels. The World Bank said overexploiting hydropower in 2021 resulted in the overall water levels of dams declining in September, 3-4 months earlier than usual.
There was therefore a sharp drop-off in the amount of water available for electricity production and irrigation in January 2022, while more intensive use of dams has resulted in infrastructure deterioration.
Four hydropower plants had to be temporarily disabled for maintenance operations in mid-2022, including the second biggest dam, Shweli-1.
Widening power supply-demand gap
Based on 2019 data the report noted an expected widening of the power demand-supply gap due to continuous growth in demand and a limited pipeline of projects under construction.
Available capacity has declined, however. On December 31, 2022, total installed capacity reached 7,179 MW, whereas available capacity was 4,500 MW.
The report notes that the difference was driven by:
- Two LNG-to-power plants in Yangon (Thaketa and Thanlwin) suspending electricity generation from July 2021, contributing to a 750 MW drop in available capacity
- Low precipitation and water levels in reservoirs reduced available hydropower capacity
- This was exacerbated by more water resources being utilised from hydroelectric reservoirs during the rainy season to make up for lower electricity generation from gas-fired power plants.
- This practice resulted in the depletion of water resources and the efficiency of hydropower sharply declines as water levels drop in the reservoir. Therefore, electricity shortages worsened in the dry season from January to May 2023.
- Gas supply shortages, due to lower domestic gas production or problems with the pipeline network, led to a reduction of the capacity of gas-to-power plants, which are already inefficient and therefore unable to operate at full capacity.
- Myanmar also has not imported LNG since mid-2021.
Monthly maximum load has significantly declined since early 2021, the report says, and Myanmar’s maximum effective generating capacity dropped by 1,047 MW within 10 months of its May 2021 peak.
Available capacity in the dry season dropped from 3,500-4,000 MW to 2,400-3,000 MW, mainly due to the limited available capacity in the power system.
Addressing the power supply-demand gap
The report essentially notes that addressing the supply-demand gap remains highly challenging due to slow or no progress on a pipeline of generation projects amid poor macroeconomic and investment conditions.
More than 2 GW of natural gas-based power plants involving FDI are on hold:
- Mee Lin Gyaing, the 1,390-MW LNG-to-power project with China, was discussed and approved by the authorities prior to 2021 but stalled without much progress since.
- Ahlone, the 388-MW LNG-to-power project with an Italian-Thai development company, signed the power purchase agreement in January 2021, but there has been no movement since.
- The 600-MW gas power plant of the Thai company, PTT Exploration and Production in Kyaiklat, was officially delayed in January 2023.
Hydropower plants have also made limited progress:
- The completion of the 280-MW Upper Yeywa was postponed from December 2023 to March 2025.
- The 111-MW Thahtay delayed commissioning to 2026.
- The 52-MW Upper Keng Tawng was scheduled to be commissioned in 2019 but is now delayed to 2025.
Recent solar tenders have not resulted in operational projects:
- The first solar tender for 1,060 MW in 2020 saw 28 out of 29 projects being awarded at competitive pricing.
- However, only one project was commissioned after other winning bidders stepped away after the military takeover.
- The second tender for 12 solar projects was launched in May 2021. Of these 12 projects, four have been commissioned and two are under construction as of May 2023; the other six are reportedly not moving forward.
- The third solar tender for 18 sites for 610 MW in total was announced in June 2022. The deadline for the tender was extended twice because of a lack of bidders. Two companies were identified to have submitted bids, but no further announcements were made.
- In June 2022, the ministry of electric power awarded three floating solar PV projects to a newly formed company with no tender, and no progress has been identified.
- In March 2023, a consortium of two state-owned Chinese companies and a Myanmar company announced a plan to build three wind farms in Rakhine state with a total 360-MW capacity.
As part of its conclusions, the report said rebuilding Myanmar’s power system "will require establishing trust to develop the power sector."
"Developing solar PV can add incremental generating capacity in a relatively fast manner. In the longer term, Myanmar can revive the development of hydropower and LNG-to-power, which were planned in the past or were under construction but did not materialize. Political and macroeconomic stability is important to improve the investment climate for these options on the ground."