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Electricity/Power Grid

Myanmar: New electricity rates set to be announced this year

25 January 2019

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Myanmar

Any rise in electricity rates to be announced this year will take into account the needs of ordinary people, Deputy Permanent Secretary of the Ministry of Electricity and Energy (MOEE) U Soe Myint has told� The Myanmar Times.

“An increase in rates will take place this year, but only after we seek recommendations from all stakeholders will we announce the new rates that will not affect the lives of ordinary people too drastically,” U Soe Myint said.

“The rationale for raising the rates has already been explained to committees in the upper and lower houses of the Assembly of the Union, regional and state ministers, and members of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). The reasons will also be explained to the 600 MPs of the upper and lower houses. Only when this is done and all objections have been heard will the government announce the new rates,” said U Soe Myint.

Representatives from the industrial sector, UMFCCI and government ministries held talks about the rate increases in Nay Pyi Taw this month, said UMFCCI chair U Maung Maung Lay.

“Myanmar’s electricity charge is the lowest in the region. The country loses around K500 billion annually for distributing electricity and this hampers development,” U Maung Maung Lay said, adding that no country in the world can afford to do this.

“The cost of distributing electricity in Myanmar is not balanced between income and expenditure. Any country would have to review its rates if it faces this issue. However, a mechanism should be created so people are not overly burdened.

The rich use more electricity than the poor, so the government must decide how it will implement higher rates,” said U Maung Maung Lay.

Currently, the government incurs costs of K89 per unit to generate and distribute electricity from hydropower, and K178 per unit for electricity from natural gas, according to the Ministry of Electricity and Energy.

In terms of charges for end-users, per-unit prices of electricity for households are K35 from 1 unit to 100 units; K40 from 101 to 200 units; K50 above 201 units and street lights. For businesses the charges are K75 from 1 unit to 500 units and up to K150 per unit above that.

Deputy Minister of Electricity and Energy Dr Tun Naing revealed that the government has been subsidising K.23 for the sale of every unit of electricity in the country meaning large amounts are spent on providing electricity to the public, rather than investing in the actual development of the country,

“At the present, 35pc of people in the country have access to electricity at the expense of the state’s finances. So, it’s been a challenging situation for the state to provide electricity to the other areas which don’t have access to it. In my point of view, business owners are enjoying electricity at less than reasonable charges,” he said.

Currently, only over four million households have been electrified out of over 10 million households in the country. Despite the fact that the state is able to generate only over 3,000 MW of electricity at present, electricity demand has been rising by 15pc on a yearly basis. According to the demand forecast, about 6,000 MW will be required in 2020-2021, the Ministry of Electricity and Energy (MOEE) said.

The rate of increase in electricity consumption typically rises by 15 percent per year on average. This fiscal year though, demand is expected to increase by 19pc. As such, the MOEE is aiming to raise supply to 3700 megawatts during the period, from 3400MW this year. The ministry expects to spend K578 billion.

Myanmar generates most of its energy through gas and hydropower plants. As construction of several hydropower projects is still ongoing, additional energy requirements for the fiscal year will be supplied by three gas-fired power plants.

These include the 225MW combined-cycle Sembcorp Myingyan gas plant, which commenced operations this month, a second gas plant producing 90MW of energy in Myingyan as well as a 145MW plant in Belin, Kyaukse.

Meanwhile, as existing gas fields in Myanmar deplete, the government is preparing to open up tenders for 31 offshore gas fields this year, the first time it has done so in five years. The MOEE is now also revising the terms and conditions of the production sharing contracts that will be offered to the winning bidders in the tender exercise.

In the meantime, it has announced plans to plug the country’s gas deficit with liquefied natural gas.

Electricity/Power Grid

National power plan expands private output

25 January 2019

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Thailand

Monks walk past a solar farm on their way to the temple after morning alms rounds. The latest version of a 20-year energy plan increases the importance of renewable energy. (File photo)

After three years of revising and drawing up a new version of the power development plan (PDP), the National Energy Policy Council (NEPC) has approved the plan for 2018-37, emphasising more participation from private companies in the country’s power generation.

The new version is expected to take effect from the second quarter.

On Thursday the council, chaired by Prime Minister Prayut Chan-o-cha, approved the PDP, which will be effective until 2037. The plan can be revised every five years as changes and technological trends occur in the power sector.

The plan reduces the proportion of power generated by the state-run Electricity Generating Authority of Thailand (Egat) from 35% in the previous version to 24%.

The new PDP sees policymakers plan for new power capacity of 56,431 megawatts, up from 46,090MW in 2017.

Of the planned new capacity, 20,766MW will be from renewable power projects.

See also: BCPG sets massive wind power goal

Power plants with a total capacity of 25,310MW will be retired during 2018-37, so total power capacity by 2037 will stand at 77,211MW.

Energy Minister Siri Jirapongphan said non-fossil power will represent 35% of total power capacity by 2037, while coal-fired power plants will be reduced to 12%.

“We are very keen on renewable energy projects and energy conservation plans, while power imported from neighbouring countries is generated from hydropower,” Mr Siri said, adding that Thailand will import 5,857MW by 2037, up from 3,528MW.

He said electricity fees during 2018-37 are estimated at 3.50-3.68 baht per kilowatt-hour or an average of 3.58 baht.

“The NEPC has ordered the Energy Ministry to hold talks with Laos and Cambodia regarding capacity and power prices if the two countries want to establish power plants and sell power to Thailand,” Mr Siri said.

He said the NEPC also authorised the ministry and Egat to study grid development in a bid to maintain the power fee, purchase more renewable power in the future and increase the country’s efficiency to become a centre of purchasing power in the region or a grid connection.

Egat and the Provincial Electricity Authority are required to develop a smart grid in the Eastern Economic Corridor in a bid to lower power fees to draw new investment flows.

The PDP also allows solar panels to be installed on private property and surplus power to be sold to Egat.

“Egat will purchase at least 100MW of solar power a year in the next 10 years, while the ministry will soon put the purchase plan into action,” Mr Siri said.

The NEPC also approved the revision of purchasing power contracts with 25 small power producers (SPP) that are co-generation plants.

The SPP contracts expire over 2016-25 and will be extended.

The SPP purchase rate is 2.80 baht per unit for gas-fired power plants and 2.54 baht for coal-fired ones.

After the new PDP is enacted, four other plans will soon be drawn up and implemented: oil management, natural gas supply, alternative energy development, and energy savings and efficiency.

All five plans will be integrated in the energy blueprint under the country’s energy reform plan.

Energy Efficiency ,
Others

Enrile warns of ‘looming’ energy crisis

24 January 2019

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Philippines

MANILA, Philippines — The government should quickly address a looming energy crisis that may “worsen” with the “Build, Build, Build” program of the Duterte administration, former Senate President Juan Ponce Enrile said Thursday.

“We do not have any source of hydrocarbon energy in the country except Malampaya. If a war happens in Russia or in the Middle East or in Africa or in Latin America that will affect the supply of crude, what do you think will happen here? In one week’s time, we will not have enough supply of power,” Enrile warned in a statement.

There is a need to focus on the creation of sources of energy to ensure the country’s energy sufficiency, the former Defense Minister under the Marcos rule, added.

“We must make sure that there would be enough supply for all our economic activities amid a surge in the costs of oil or even the lack of it,” he said.

The former lawmaker noted that the Malampaya Natural Gas Facility, which provides 30 percent of Luzon’s total supply of power, is estimated to run out of reserves by 2024.

Power demand, Enrile added, has also steadily increased due to the “country’s economic growth, the demand of the manufacturing industry, and an increase in power-intensive infrastructure projects like the ‘Build, Build, Build’ program.”

Despite its mandate to put energy security and sufficiency at the forefront of its energy direction, it was reported that the Department of Energy (DOE) still failed to articulate this matter in its Philippine Energy Plan (PEP) 2017-2044, Enrile noted.

He also said DOE records showed that the Philippines remained heavily dependent on external sources for its petroleum supplies, importing 94 percent of its oil requirements.

The World Economic Council (WEC) Energy Trilemma Index, which ranks the performance of each country based on energy security, energy equity, and environmental sustainability, showed the Philippines ranking 74 out of 125 countries in 2018, he further cited. /cbb

Energy Efficiency

Southeast Asia journey to adopt clean and low carbon technologies a bumpy one

24 January 2019

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ASEAN

Southeast Asian countries are beginning to transform the way energy is produced and consumed in order to transition to a low carbon, sustainable economy. But the journey has been a bumpy one and the region has overall been slower to adopt clean and low carbon technologies largely due to an ongoing dependency on coal.

Experts interviewed for the white paper, “Power Trip: Southeast Asia’s journey to the low carbon economy”, noted that there is a high ongoing dependency on coal – particularly in countries such as Indonesia, Vietnam and Philippines – and the continued entrenchment of large state utilities in fossil-fuel power systems.

Respondents from these three countries were the least optimistic that the region was on a clear path to a low carbon economy. For the Philippines, there was near consensus with almost 90 per cent of all respondents identifying insufficient policies and lack of access to funding as key obstacles to the Philippines’s transition to a low carbon economy.

Meanwhile, about three quarters of the respondents from Indonesia suggested insufficient policies and a lack of accessto funding as key obstacles in Indonesia’s transition to a low carbon economy, followed by fossil fuel subsidies.

Overall, respondents from Vietnam were the least confident out of all countries that their country would transition to a low carbon economy by 2030. The consensus was that lack of access to clean technologies and lack of access to funding were two main obstacles for Vietnam. These were followed very closely by insufficient policy/regulation and fossil fuel subsidies, respectively.

Other key findings from the survey include:

1. The top three sectors most in need of investment in the region are renewable energy and storage, clean energy public transport systems, and energy efficient technologies and innovations.

2. The top three drivers in the transition to a low carbon economy were business leadership, local government initiatives, and consumer pressure and purchasing habits.

3. The top two barriers to the transition were insufficient policy or regulation and lack of access to funding.

4. The top three changes anticipated in this transition were that there would be increased environmental regulations, consumers and businesses would have more clean energy options and services, and investors and fund managers would reduce their investment exposure to high carbon assets and businesses.

Tim Hill, research director for Eco-Business who led the white paper, said: “It was exciting to get a sense of how the transition to a low carbon economy was developing from business leaders and other stakeholders in Southeast Asia. Although we noted some concerns about the pace of uptake of clean energy in some of the countries, it is clear that the technologies underlying the whole transition are enabling a more resilient and less polluted world – and there are going to be a lot of business opportunities in this new era.”

The report surveyed 562 senior government, business and civic society executives from Indonesia, Malaysia, Thailand, the Philippines, Singapore and Vietnam between August and September 2018. The report was launched at the Asia Clean Energy Summit 2018 and is the first of its kind in Southeast Asia that outlines the drivers and barriers faced by specific countries in the region in their transition.

Electricity/Power Grid

National grid to reach all provinces next year

24 January 2019

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Cambodia

The government says it plans to have all 24 provinces in the country connected to the national grid by 2020.

Five provinces still lack access to the national power grid – Tboung Khmum, Kampong Thom, Oddar Meanchey, Ratanakkiri and Mondulkiri.

Speaking at Electricity Authority of Cambodia’s annual meeting yesterday, Yim Viseth, chairman of the agency, said that these provinces receive energy indirectly from the national grid or are serviced by private companies, which makes electricity tariffs higher.

Once they are connected to the national grid, the power supply will become cheaper and more reliable, he added.

“Our aim is to have these five provinces connected to the national grid by next year,” he said.

Cambodia now has 2,141 kilometres of transmission lines and 33 sub-stations.

Mr Viseth called on the private sector to partner up with the government to help achieve the goal.

“As we aim to expand the national, it is the government’s policy to enter partnerships with private companies that can help build the necessary infrastructure in villages across the country.”

The government has previously stated that its goal is to electrify all villages in the country by 2020. Currently, 87 percent of the country’s 14,168 villages have access to power.

Suy Sem, the Minister of Mine and Energy, said, “Just over 10 percent of villages are not electrified, so we firmly believe that we will reach our goal.”

Last year, Cambodia consumed 2,650 megawatts, a 15 percent increase compared to a year earlier. 442 MW were imported from Thailand, Vietnam, and Laos in 2018.

Cambodia signed a deal with Laos last month in which it agreed to increase energy imports from the neighbouring nation.

The deal was signed in Vientiane during the visit of a Cambodian delegation that included Prime Minister Hun Sen.

Provinces near the border with Laos – including Preah Vihear, Stung Treng, Ratanakkiri and Kratie – will be supplied electricity produced in Laos, according to the agreement.

The agreement was signed the same month that the Lower Sesan II Dam in Stung Treng started operations. The hydropower plant is capable of generating 400 MW.

Renewables

Solar sector increasingly attractive: Minister

24 January 2019

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Cambodia

With the Kingdom’s largest solar energy project due to come online this year in Kampong Speu province, the local solar sector is luring an increasing number of investors every year, the Minister of Mines and Energy said.

Minister Suy Sem yesterday said that Kampong Speu’s 60-megawatt solar farm, being built with an investment of $60 million, will be ready by the end of the year, as originally planned.

“Everything is going according to plan, and the plant should be ready in time,” Mr Sem said, adding that the government welcomes investment on renewables to increase the country’s capacity to generate power.

The minister’s comment follows an announcement by Huaneng Group earlier this week unveiling plans for a solar energy project in Cambodia.

During Prime Minister’s Hun Sen official visit to Beijing this week, Huaneng Group’s CEO Shu Yinbiao told him that the company plans to invest in Cambodia’s solar sector, according to a post on Mr Hun Sen’s Facebook page.

The post mentions that the Huaneng Group is the same company that built the Lower Sesan II, a 400 MW dam in Stung Treng province that started operations in December.

A report from the Ministry of Mines and Energy shows that Cambodia is on track to increase its electricity output by 16.12 percent this year, reaching 2,870 MW.

Government’s spokesman Pay Siphan said, “Having more investment in the energy sector is important for our economy because it contributes to reducing electricity fees,” and added that “the government aims to give access to cheap and reliable energy to all citizens.”

Oil & Gas

Opportunities for India in Myanmar’s energy sector

24 January 2019

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Myanmar

Myanmar is reportedly planning to open fresh bids for its oil and gas blocks to international companies. In the last few years, the Myanmar government has taken concrete steps to restructure its energy sector and has identified natural gas as an important component of its energy master plan.

This is a welcome development for India, which has substantial experience of operating in Myanmar’s energy sector. Besides, both India and Myanmar are keen to expand the scope of cooperation in the realm of energy sector. Earlier, though India could not secure the deal to build a gas pipeline from Myanmar to India’s eastern region, India has continued to remain engaged with the energy sector of its eastern neighbour. For instance, India has positioned itself as a key stakeholder in the China-Myanmar gas pipeline.

The indication of possible bidding rounds for energy blocks this year can provide an opportunity for India to leverage its experience of having operated in Myanmar for more than a decade. India now has a good understanding of the political economy of energy development and the nuances of decision making in Myanmar.

But having said that, India must be careful and not underestimate the regional complications that might impact India-Myanmar energy relations. The issue of Rohingya refugees has historically existed between Bangladesh and Myanmar, but the magnitude of the problem has substantially increased in recent years. Also, the possibility of gas trade between India and Myanmar would be contingent upon the “availability of surplus energy” with the latter, as argued by ORF researchers Anasua Basu Ray Chaudhury and Pratnashree Basu in their research paper.

The issue of Rohingya refugees, at least for now, may create complications for any possible trilateral pipeline between India, Bangladesh and Myanmar. Yet, if the possibility of building a trilateral pipeline project faces challenges, then India could fall back on the alternative route mentioned in a feasibility report by the Gas Authority of India Ltd. (GAIL) in 2006, which had envisaged constructing a bilateral pipeline between India and Myanmar via India’s north-eastern States. This alternative scenario in the current context must also explore the technical option of supplying natural gas to Bangladesh from the Indian side at a later stage. In his interview to Dhaka Tribune in 2017, Dr. Badrul Imam, Bangladesh’s energy expert, had noted that Dhaka should consider the option of sourcing any surplus natural gas from the Indian State of Tripura. However, in an ideal scenario, as argued by Dr. Mirza Sadaqat Huda, an energy expert based in Singapore, in 2013, it would make sense for India, Myanmar and Bangladesh to join hands for any future proposed trilateral gas pipeline to fulfill their energy and economic interests as well as strengthening political relations.

It also needs to be mentioned that during this author’s field work in Myanmar in the year 2015 for a South Asia Network of Economic Research Institutes (SANEI)-funded project on the theme of exploring prospects for cross-border electricity trade in South Asia for the National Institute of Advanced Studies (NIAS), Bengaluru, he noticed the keenness of the Myanmar government to invite western companies to operate in their hydrocarbon sector.

Perhaps in any future round of bidding for energy blocks, to strengthen its own energy export diversification strategy, Myanmar must consider exporting surplus gas to markets in India and Bangladesh. For instance, India has announced ambitious plans to increase the contribution of natural gas to 15 percent by 2030 in its energy mix. India’s network of domestic pipelines is being expanded to ensure availability of gas to more consumers in the transportation and domestic sectors. Similarly, appetite within Bangladesh for natural gas has also been rising consistently, but the country is constrained due to limited domestic production.

It would also be important to understand China’s current energy strategy in Myanmar. In its efforts to make a transition to natural gas in a major way, China’s appetite for natural gas is also increasing. Hence, it will not be surprising if China yet again competes in the proposed bidding rounds for energy blocks. Chinese companies, thus, may continue to provide a stiff competition to Indian companies in Myanmar’s energy sector.

For another reason too, the future bidding rounds in Myanmar may be different and competitive. The last round (2013-14) showed that the interest of foreign companies to invest in Myanmar’s energy sector was gradually increasing. So, the presence of foreign companies would make future bidding rounds more competitive for Indian companies. India must therefore explore a variety of arrangements such as going alone or joining hands with different foreign companies to undertake any future stakes in Myanmar and even for building a gas pipeline to India.

India must engage proactively with the Myanmar government and present a commercially viable case for a greater share in Myanmar’s energy development. It would be pertinent to note that cooperation in the energy sector, in the coming years, between India and Myanmar will only complement the current bilateral efforts underway in the realms of infrastructure development, connectivity and social development.

Therefore, to establish a firmer and sustainable presence in Myanmar’s energy sector, India must offer Myanmar a comprehensive package that encompasses Myanmar’s current and future needs, while simultaneously drawing benefits for its own energy plans.

Oil & Gas ,
Others

DoE asks Tanglawan to bankroll LNG project in 6 months

23 January 2019

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Philippines

The Energy Department on Wednesday asked Tanglawan Philippine LNG Inc. to comply with the conditions of the notice to proceed with its $2-billion liquefied natural gas project within six months. “There is a provision [in the NTP] that there are still papers still to be submitted. One of the big milestones there is their seriousness to put up a 1,100-megawatt power plant of gas,” Energy Undersecretary Donato Marcos said. Tanglawan, a joint venture of Phoenix Petroleum and China National Offshore Oil Corp., secured the NTP to build an LNG terminal in Batangas costing $686 million for the regasification terminal and a power plant worth $1.3 billion. Tanglawan plans to break ground this year for the LNG regasification and receiving terminal with a capacity of 2.2 metric tons per annum. Commercial operations are expected to start by 2023. “They have to do all submissions already. They have six months. The ball is in their hands,” Energy Secretary Alfonso Cusi said. Requirements for the next six months include permits from other government agencies, environmental compliance certificate, LGU endorsement, financial closing and others. Marcos said Tanglawan would also need to look for an offtaker of its power plant. “They have to coordinate [with Manila Electric Co.]. Otherwise, the market or the commercial viability of the project will not push through,” he said. Marcos said Tanglawan would have the option to sell LNG to commercial and industrial establishments and later to household and transport sectors.

“We always issue third party access permit…If some party will need it, you should sell to them also,” he said.

Meanwhile, Marcos said the applications of Excelerate Energy L.P., a US-based LNG company and FGen LNG Corp. (FGEN LNG), a wholly-owned subsidiary of Lopez-led First Gen Corp., were still pending with DoE for evaluation.

He said the two applicants might be given an NTP “if the market that they will declare is not an overlap to the market of the other one.”

“We have not finished the evaluation, but Tanglawan did not say that their captive market is First Gen,” Marcos said.

Cusi said state-run Philippine National Oil Co. planned to team up with Tanglawan for the LNG project.

“They’re working to partner with CNOOC, Tanglawan which at the board, we are saying yes. Let’s go there so we’ll still protect the interest of the Republic, of the people, of the consumers, of the country if there is a representation in the board,” he said.

Cusi earlier said PNOC would have an advantage because it has the franchise to operate the pipelines and the department “might elect” to give PNOC a stake in the LNG terminal project.

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