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Empowering Rural Electrification in Myanmar: Opportunities and Policies Tungapuri Hotel Nay Pyi Daw , Myanmar PowerPoint Presentation
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Empowering Rural Electrification in Myanmar: Opportunities and Policies Tungapuri Hotel Nay Pyi Daw , Myanmar. Dr. Chris Greacen March 9, 2013. Outline. Early indications of ADB/IFC/World Bank strategies Empowering rural electrification strategy: Off-grid small power producers

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slide1

Empowering Rural Electrification in Myanmar:Opportunities and Policies

  • Tungapuri Hotel
  • Nay PyiDaw, Myanmar

Dr. Chris Greacen

March 9, 2013

outline
Outline
  • Early indications of ADB/IFC/World Bank strategies
  • Empowering rural electrification strategy:
    • Off-grid small power producers
    • Grid extension
  • Supporting regulations
adb ifc world bank
ADB/IFC/World Bank

Stated goals

Power sector strategies

Committed $600 million for energy sector

“Private sector participation”

Creation of legal and regulatory frameworks to lower risks to private sector (including foreign investment)

Unbundling

Bidding

Focus on:

centralized, large-scale generation (each plant > 100 MW)

Coal

Natural gas (CCGT)

Large hydropower

500 kV transmission

  • “Inclusive economic growth”
  • “Reduce poverty and improve quality of life”
  • “ADB’s vision is an Asia region free of poverty”
  • “Regional integration”
power sector iv
POWER SECTOR (IV)
  • Future Generation Expansion
    • 92 Hydro potential sites (46,000 MW)
    • 13 by MOEP1 (2,572 MW)
    • 7 BOT by local private sector (560 MW)
    • 44 FDI (BOT or JV) - 42,145 MW; 2 coal, 870 MW,
    • 1 gas power generation, 470 MW
    • 1 coal in Yangon, J power, 600 MW? (new)
  • Power Demand projections: 2001, no systematic approach
    • A power demand master plan is needed: generation, transmission and distribution
    • Planning softwares and capacity building is needed
adb ifc world bank1
ADB/IFC/World Bank

Stated goals

Power sector strategies

Short-term:

Committed $420 million with focus on energy

Replacing gas turbines

Providing $80 million grants for community-driven development

health, education, water supply, rural electricity

Long-term focus still unclear, but World Bank articles on Myanmar give example of WB work extending the grid in Laos and Vietnam.

Telephone call with IFC in February: “focusing so far on centralized electricity”

  • “World without poverty”
  • In Myanmar: “focus on energy infrastructure development“
  • “Connecting people and businesses to a reliable electricity grid is critical for Myanmar to realize its enormous social and economic potential”
slide9

Empowering rural electrification strategy: extending the grid and encouraging rural mini-grids

Customers

Customers

Mini-Grid

National

Grid

Small Power Producer

Large Plants

slide10

Donor funds $

Energy export $

Electrification Fund

Regulatory framework allows for fair treatment of both

slide11

Mae Kam Pong, Chiang Mai, Thailand

  • Built by government & community
  • 40 kW
  • Used to be off-grid;
  • Making arrangements to sell electricity to grid
slide12

Mawengi village, Njombe, Tanzania

  • LUMAMA hydropower project
  • 300 kW – remote mini-grid
slide14

Rice husk gasifier

Myanmar – Kayuklot Townshipelectricity to 500 households

biogas from pig farms
Biogas from Pig Farms

Reduces air and water pollution

Produces fertilizer

Produces electricity

8 x 70 kW generator

sugarcane bagasse tanzania
Sugarcane bagasse -- Tanzania
  • capacity: 17.5 MW
  • powers factory, irrigation, hospital, school, thousands of homes
  • sells 4 MW to main grid but can also operate as isolated minigrid
electrification
Electrification
  • faster if local entrepreneurs are also empowered to build mini-grids
electrification1
Electrification
  • faster if local entrepreneurs are also empowered to build mini-grids
electrification2
Electrification
  • faster if local entrepreneurs are also empowered to build mini-grids
supporting laws and regulations
Supporting laws and regulations

Include SPPs in national energy law

  • Provides mini-grids with legal right to exist
  • Provides for establishment of:
    • Rural Energy Agency (REA)
      • (if suitable agency does not already exist)
    • Small Power Producer (SPP) regulations
rural energy agency rea
Rural Energy Agency (REA)
  • Provides technical and financial support to SPP developers;
  • Manages Rural Energy Fund:
    • Pays up to $500 subsidy per new connection – EITHER on-grid or isolated mini-grid if built to national standard;
    • Subsidizes SPP business plans and feasibility studies

Website of Tanzania REA: http://www.rea.go.tz/

small power producer spp regulations
Small Power Producer (SPP) regulations

$

Thai “Very Small Power Producer” documents : www.eppo.go.th/power/vspp-eng/index.html

Tanzania “Small Power Producer” documents: www.ewura.go.tz/sppselectricity.html

spp program includes
SPP program includes
  • Streamlined licensing and approval
  • For grid-connected SPP:
    • Streamlined grid interconnection procedures
    • Standardized Power Purchase Agreement (PPA)
    • Standardized tariffs
  • For off-grid SPP:
    • Flexibility in tariff setting
    • Provisions to reduce risk when main grid expands to formerly isolated SPP mini-grid
what to do when the big grid expands to reach the little grid
What to do when the “big grid” expands to reach the “little grid”?
  • Allow formerly off-grid generators to sell back to the grid; and/or
  • Allow mini-grid operators to purchase wholesale electricity from the grid for resale to retail customers.
who owns the minigrids
Who owns the minigrids?
  • Nepal:
    • rural communities
    • local private sector
  • Cambodia:
    • local private sector
  • Tanzania:
    • local private sector
    • church,
    • communities,
    • utility
slide27

Revolving Fund

  • Thai Government loans funds at 0% interest to commercial banks for investment in:
    • Energy efficiency improvement projects
    • Renewable energy development and utilization projects

Low cost financing

11 local financial institutions have participated.

  • Max loan amount: 50 MB
  • Max. interest rate: 4%
  • Max. loan period: 7 years

January 2003 – present

7000 M Baht

slide28

Tax Incentives

  • Tax incentives

28

summary
Summary
  • Question of "electricity for whom" must be in forefront.
  • Concern that the ADB (and World Bank/IFC?) likely to focus on centralized approach unless requested to do otherwise.
  • Better strategy involves both grid extension and encouraging off grid small power producers.
  • Include SPPs in new national energy law.
  • Rural energy fund (REF) capitalized by donor funds leveraged by revenues from energy exports.
  • REF available as per-connection subsidy both to off-grid and on-grid, also subsidizes feasibility studies and business plans.
  • SPP rules provide for streamlined interconnection to grid, standardized PPAs and tariffs.
  • Isolated mini-grids can connect if/when main grid arrives.
resources
Resources
  • Tanzania Rural Energy Agency (REA): www.rea.go.tz
  • Tanzania Small Power Producer (SPP) rules and documents: www.ewura.go.tz/sppselectricity.html
  • Thai VSPP regulations and documents: http://www.eppo.go.th/power/vspp-eng/index.html
  • Electricity Authority of Cambodia (license, regulations, tariffs for mini-grids): http://www.eac.gov.kh/
slide31
Chris Greacen

Palang Thai

chris@palangthai.org

www.palangthai.org