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BUSINESS IN CLEAN ENERGY: Potential for Solar Power in Myanmar

The chugging generators come to life and compete with the blaring whistles of public buses and shouts of ambulant vendors in the downtown. Humungous generators are nuisance as they distort the façade of business establishments, produce ear-blasting sounds and pollute the air as they spew grey smoke for everyone to inhale. But these are essential for businesses as the city experience power failure almost daily now-a-days. Despite the inflow of investments and the fast changing skyline of the city, electric service has not caught up with the developments.

A bleak situation

Even before the country opened up to the rest of the world, there is an existing deficit in the supply of electricity. The country has a total consumption of 2700 MW, servicing 30% of the 51 million population. Access to electricity is limited to key areas, but even in the serviced areas, the inadequate supply has worsened as the demand from business establishments and household consumers shoot up.

The main power supply of the country is coming mostly from ageing hydroelectric dams in various parts of the country. It cannot cope with the demand which explains the rotating blackouts. The previous government tried to address the situation by drafting the Myanmar Energy Master Plan targeting 100% electrification by the year 2030 at 14,524 MW. This plan will require $40 billion in 20 years. The plan calls for the development of more hydroelectric dams and the gradual establishment of generators fueled by coal and a mix of renewable energy sources.

The electrification program is aligned with the industrialization strategy adopted by the previous government. If this path will also be taken by the new government, the projected increase in the demand for energy will outpace current production capacity. So far, the NLD leadership has not rolled out its economic program in details, although there will be not much difference with what is going on now.

Issues and considerations in energy generation Businesses and industries depend on lower power rates to generate profit. Higher rates will mean higher production cost and therefore higher products for consumers and uncompetitive products for the export market. The current electric rates in the country is subsidized by the government as the production cost of inefficient ageing generators are higher, a condition that is not sustainable in the long-term.

Diversifying energy sources will also have negative environmental impact. Generators fueled with bunker oil emit toxic wastes, and so are coal-fueled generators, the cheapest but the highest in terms of dangerous fumes it spew. Hydroelectric dams although considered as ‘clean’, affects river ecosystems and deplete fish stocks in traditional fishing grounds.

Environmental degradation and economic dislocations resulting from energy production initiatives produce political issues that polarize not only the country but the whole ASEAN region. One clear example is the Lancang-Mekong river system that runs from the northwestern part of China down to the greater Mekong areas of Cambodia, Laos and Vietnam. China constructed several dams upstream drying up the rivers flowing to the Vietnam delta. Laos constructed dams in the part of the Mekong River running within its territory, further reducing the volume of water that irrigates the rice fields in the Vietnam, threatening the rice industry. In Myanmar, dam construction seemed to be the attention of the government. There are plans to dam the Ayeyarwaddy River and the Than Lwin River. Myitsone Dam in Kachin State was constructed to generate electricity not for Myanmar but for China. People were enraged and the suspension of the dam construction ordered by President Thein Sein endeared him to the public. Now, the new government is in a tight rope as it ponders on the issue of lifting the suspension or kowtowing to the wishes of a superpower neighbor.

Alternative power sources One of the main criticisms in the energy plan of the previous government was the low allocation of resource to develop renewable energy. Banking on the big oil and coal reserves, the government is more inclined to use fuels that require extractive technologies which are finite, rather than developing renewable energy sources like wind and solar which are infinite.

The perception about renewable energy is that the technology is not yet developed to make it a commercial venture. At present, solar power is already developed and it has become affordable and available in Southeast Asia. We do not have to go far, neighboring China is producing cheap solar panels. The cost of producing solar power is continuously going low, closer to the cost of producing energy from coal-fueled generators.

Race to go solar

Many countries in Asia are at the forefront of solar power production. The first is neighboring Thailand, who opened solar power production for commercial ventures. The Thailand Ministry of Energy encouraged the production of solar power where producers can supply the generated energy to the main grid.

India is another country that gave priority to solar power production. The government of Prime Minister Modi set a target of generating 100 gigawatts of solar power by the year 2022. Ambitious but attainable as production was offered to commercial ventures. Local investors can establish solar farms and supply the generated power to the grid. The Philippines is another country leading using solar energy in the ASEAN region. It has recently inaugurated a 63.3 MW solar farm in Calatagan, Batangas. It was built at the cost of $120 million and part of the network of solar farms in the country with a total output of 150MW. The country has a Wholesale Electricity Spot Market where independent power producers can sell energy they produce.

Singapore at present has a production of less than 1% of the total power consumption, but it is projecting to raise the percentage of up to 20% by the year 2050 through an innovative and mass-based plan to make this possible called solar leasing. Private solar companies will install and maintain solar panels in buildings and the building owners and residents pay for the power generated by the solar panels. In the future, most of the buildings in Singapore will be covered with solar panels.

In Malaysia, the government is experimenting to energized Kuala Lumpur International Airport with an investment of RM 200 million

There is business in solar energy production in Myanmar

The country has wide open areas that can be developed as solar farms. The tropical climate allows more sunny months ideal for generating solar power. Technology is available and supply of materials like solar panels are affordable and available from India and China. In essence, Myanmar has all the advantages necessary for the development of solar power.

However, the legal framework for the development and regulation of solar power production in the country is not yet developed. Because of this, investors who would like to place their money in the industry are still fence sitting, waiting for the cue from the government.

Business potentials in the solar power industry are huge. Solar energy production can trigger entrepreneurial initiatives as local investors can pool resources to venture into solar power production. Even ordinary people can take part by forming power cooperatives that can set up and manage solar farms and supply energy to the grid. There will also be collateral benefits as these initiatives will provide employment to thousands of people in the areas where the farms will be located. Hopefully in the future, shiny solar panels will replace noisy generators.