REAM x GE Productive End-Use of MHP 28FEB16

37
2/29/2016 Productive End- Use of Micro-Hydro Plants in Myanmar Patrick J. Pawletko The views and opinions expressed herein are those of the author and do not necessarily reflect the views of Green Empowerment, the Renewable Energy Association Myanmar, their affiliates, or their employees.

Transcript of REAM x GE Productive End-Use of MHP 28FEB16

2/29/2016

Productive End-

Use of Micro-Hydro

Plants in Myanmar Patrick J. Pawletko

The views and opinions expressed herein are those of the author and do not necessarily

reflect the views of Green Empowerment, the Renewable Energy Association Myanmar,

their affiliates, or their employees.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 1

ABSTRACT

For nearly 30 years, entrepreneurial technicians and community-based innovators have been quietly

growing Myanmar’s micro-hydropower sector with very little outside support or guidance,

whether financial or technical. Today, hundreds of pico- and micro-hydropower projects now dot

the rolling landscape of Shan, Kachin, and Chin states. As a result, at various times since at least

2000, stakeholders from the Government of the Republic of the Union of Myanmar, local private

sector, international aid agencies, and local & international non-governmental organizations have

reported on the importance of productive end-use as an important consideration when assessing

the socio-economic viability and sustainability of off-grid micro-hydropower projects.

Understanding rural productivity and cottage industries relating to sustainable renewable energy

projects is as pertinent now as ever, as the Government prepares to roll-out its World Bank-funded

National Electrification Project. Accordingly, under the direction of the NEP, the Department of

Rural Development will oversee the development of off-grid and “pre-electrification” mini-grid

projects to serve an estimated 31,000 and 155,000 households, respectively, over the next five years.

There is enormous potential in these off-grid and pre-electrification areas for micro-hydropower

(MHP) projects to serve a socio-economic driver by supplying community-owned cottage industries

with clean, affordable energy during daytime plant operation.

This study aims to amalgamate the findings and recommendations of case studies and policy

papers from the last 15 years, reinforced by a primary field study conducted in early January 2016.

EXCHANGE RATE

1 USD = 1238 MMK

as of

29 FEBRUARY 2016

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 2

Contents

ABSTRACT ...................................................................................................................................................... 1

ABBREVIATIONS AND ACRONYMS ........................................................................................................ 3

POLICY BACKGROUND............................................................................................................................... 4

CURRENT SCALE OF MHP DEVELOPMENT IN MYANMAR .............................................................. 5

CHALLENGES FACING PEU IN MYANMAR .......................................................................................... 8

RECENT EFFORTS TO INCREASE PEU IN MHP ..................................................................................... 9

FINDINGS FROM FIELD SURVEY ............................................................................................................ 12

POLICY RECOMMENDATIONS ............................................................................................................... 18

ANNEX 1: Current Electricity Tariff Structure in Myanmar ................................................................... 21

ANNEX 2: Programme of the Field Study ................................................................................................. 22

ANNEX 3: Brief Report on Sites Visited & Discussed .............................................................................. 23

ANNEX 4: Field Visit Photos ....................................................................................................................... 26

ANNEX 5: Previous PEU Case Studies....................................................................................................... 33

WORKS CITED .............................................................................................................................................. 35

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 3

ABBREVIATIONS AND ACRONYMS

DRD Department of Rural Development

GORUM Government of the Republic of the Union of Myanmar

EI Electrical inspection

HPNET Hydro Empowerment Network of South and Southeast Asia

JICA Japan International Cooperation Agency

MHP Micro-hydropower

MOBA Ministry of Border Areas

MOI Ministry of Industry

MOLFRD Ministry of Livestock, Fisheries and Rural Development

MOST Ministry of Science and Technology

NEES National Electrification Executive Secretariat

NEMC National Energy Management Committee

NGO Non-governmental organization

PAD Project Appraisal Document

PEU Productive end-use

REAM Renewable Energy Association Myanmar

RE Renewable energy

SME Small and medium enterprise

SPP Small power producer

TA Technical assistance

VA Village Administrator

VEC Village Electrification Committee

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 4

POLICY BACKGROUND

Prior to 2013, the overall responsibility of the electrification of Myanmar’s off-grid areas fell upon

the Ministry of Industry, with support from a myriad of other departments including the

Department of Rural Development (formerly within the Ministry of Border Areas and presently

within the Ministry of Livestock, Fisheries and Rural Development) and the Ministry of Science and

Technology (Republic of the Union of Myanmar, 2015, p. 37). With the 2013 transfer of MOI’s rural

electrification mandate to MOLFRD, however, most of these off-grid responsibilities have been

shifted solely to the DRD (The World Bank, 2015, p. 38), (Castalia Strategic Advisors, 2014, pp. vii,

44, 62), with the exception that the MOI, will still be responsible for electrical inspection1 of

consumption by productive end-use industries and small and medium enterprises (Global

Integrated Service, 2014). While it will no longer be directly responsible for village electrification

projects, per se, MOST will continue to play a key role in the NEP as a hub for research, knowledge

exchange, and technical assistance (The World Bank, 2015, p. 38), (Greacen, 2014, p. 11).

In recent years, MHP plants have also been implemented by the MOAI, in an effort (albeit an

uncoordinated one) to aid off-grid electrification for villages situated near existing irrigation

channels. By the time of a 2014 survey conducted by a Japanese joint venture, MOAI controlled 239

reservoir dams – about 100 of these systems use micro-hydropower for household electrification2

(Hokuriku Seiki Co., Ltd. & Infrustructure Development Institute, Japan, 2014, pp. 4-5).

At the highest policy level, the NEP’s National Electrification Executive Secretariat maintains a

coordination role over Ministerial involvement in implementing all aspects of the off-grid program,

while the National Energy Management Committee acts as the program’s roll-out oversight council

(Castalia Strategic Advisors, 2014, p. 45). The NEMC coordinates among seven key energy

ministries (including MOI, MOST, and MOLFRD); it is tasked, in part, with “systematically linking

the goals of the Energy Plan and the Industrial Development Plan” and “gathering information to

enable the effective use of energy and the efficient coordination of energy projects" (Ngwe, 2014, p.

8). At the ground level, the NEP’s strategy relies heavily on Village Electrification Committees and

Village Administrators to coordinate with local governments on financial arrangements and to

ensure the long-term sustainability (operation and maintenance, technical capacity building,

ownership, managing construction contracts, planning productive end-uses etc.) of government-led

off-grid and pre-electrification initiatives (Republic of the Union of Myanmar, 2015, pp. 22, 26), (The

World Bank, 2015, pp. 11, 19, 73).

Productive end-use activities must be inspected by its relevant sector ministry. For instance, a PEU

rice-mill must receive an industrial license from the Ministry of Agriculture and Irrigation, an ice

making facility must be licensed by the Ministry of Health’s Food and Drug Administration

1 MOI EI also includes generation, distribution, and selling of electric power.

2 "The power generated is supplied free of charge to the villages while restricting its use to electric lights." (Hokuriku

Seiki Co., Ltd. & Infrustructure Development Institute, Japan, 2014, p. 5)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 5

Department, and a sawmill must be licensed by the Ministry of Environmental Conservation and

Forestry.

Furthermore, a 2014 letter from MOLFRD identified support for SMEs in the energy paradigm:

The creation of SME Development Center (launched in April 2012) as a central committee for

SME development will ensure the availability of financial capital from the government and

private banks. It will establish network with local and foreign organizations to meet technical

requirements, encourage market development of SME from rural to urban areas, make SME

supporting industries from local and foreign investment to promote healthy development of

market chains [sic]. A new upcoming SME law will also be available. (Ministry of Livestock,

Fisheries, and Rural Development, 2014, p. 7)

CURRENT SCALE OF MHP DEVELOPMENT IN MYANMAR

No comprehensive or well-maintained record of Myanmar’s MHP plants exists. One audit of

Myanmar’s hydropower development was completed by JICA in 2003. The report identified a total

of 28 projects installed (6.081 MW cumulative capacity), one project under construction (0.320 MW

capacity), and 112 projects under study (29.227 MW cumulative capacity), all less than 1 MW

capacity. While private practitioners have often neglected to keep detailed records of their

commissioned projects, extensive interviews with the six member companies have led the survey

team to conclude that at least several hundred private or community-owned pico-, micro-, and

mini-hydropower sites have been commissioned in Myanmar since 1983. The operational status of

these plants today remains largely unknown, as does the prevalence of PEUs within these

communities.

0

10

20

30

40

50

60

Nu

mb

er o

f P

roje

cts

2003 Audit of Micro-Hydropower Projects Less than 1 MW

Installed Under Construction Under Study

Source: JICA 2003

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 6

44%

56%

Micro-Hydropower Resources Under Ministry of

Agriculture and Irrigation (MOAI)

Operational Decommissioned

Source: MOAI 2016

As noted in the Policy Background section, until very recently, MOAI was perhaps the only

government entity developing MHP for household lighting. In a brief report to the NEMC on 18

February 2016, MOAI confirmed that a total 73 MHP plants have been established by the Ministry.

41 of those systems are no longer operational and the remaining 32 operational sites produce a total

of 911 kW. None of these MHP systems are known to support PEU activities and, due to the

formation of the DRD in 2012, MOAI is no longer developing new MHP sites.

Records from MOLFRD maintain that, as of January 2015, there are 2,426 mini-hydropower mini-

grids operating in Myanmar. Of this, the DRD claims to have commissioned 51 MHP projects

during the Fiscal Year 2013-2014 and 131 projects during FY 2014-2015 (Department of Rural

Development, Ministry of Livestock, Fisheries and Rural Development, 2015).

A 2014 World Bank-commissioned study on Myanmar yielded the following financial data for six

MHP projects in Southern Shan State:

Project

Name Year

Initial

Investment

(MMK)

Annual

O&M cost

(MMK)

Power

Output

(kW)

Hours

Per

Day

Energy

Output

Per Day

(kWh)

Capacity

Factor

20 Year LCC

with 10%

Discount

Rate (MMK)

Capacity

Cost over

20 years

(MMK/kW)

Pan Oo

Tang 2002 60,000,000 1,100 75 15 1125 63% 1,132,700 23,256,000

Mong

In 2014 5,000,000 100,000.00 5 10 50 42% 551,800 12,083,000

Owe

Kong 2014 50,000,000 400,000.00 40 15 600 63% 202,400 6,650,000

Ming

In 2012 5,000,000 250,000.00 N/A 8 N/A N/A 1,005,900 8,812,000

Laouk

Lon 2011 10,000,000 750,000.00 20 8 160 33% 467,400 5,118,000

Table 1 Reproduction of MHP financial data for installed equipment (“present machine”) from 2014 World

Bank-funded study (Kumara, 2015, p. 32)

The Kumara study also reported on daily load curves for three government-owned MHP sites

(Kumara, 2015, pp. 70-72):

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 7

It is important to note, however, that the above load profiles are not necessarily representative of

similarly sized sites elsewhere in Myanmar or indicative of sectoral trends writ large.

0100200300400500

1:00

:00

AM

2:00

:00

AM

3:00

:00

AM

4:00

:00

AM

5:00

:00

AM

6:00

:00

AM

7:00

:00

AM

8:00

:00

AM

9:00

:00

AM

10:0

0:00

AM

11:0

0:00

AM

12:0

0:00

PM

1:00

:00

PM

2:00

:00

PM

3:00

:00

PM

4:00

:00

PM

5:00

:00

PM

6:00

:00

PM

7:00

:00

PM

8:00

:00

PM

9:00

:00

PM

10:0

0:00

PM

11:0

0:00

PM

12:0

0:00

AM

Pow

er C

onsu

med

(kW

)

Composite Load Profile for Var MHP Site

Day 1 Day 2 Day 3 Day 4 Day 5

Day 6 Day 7 Day 8 Day 9 Day 10

Source: Ajith Kumara, 2015

0100200300400500600

1:00

:00

AM

2:00

:00

AM

3:00

:00

AM

4:00

:00

AM

5:00

:00

AM

6:00

:00

AM

7:00

:00

AM

8:00

:00

AM

9:00

:00

AM

10:0

0:00

AM

11:0

0:00

AM

12:0

0:00

PM

1:00

:00

PM

2:00

:00

PM

3:00

:00

PM

4:00

:00

PM

5:00

:00

PM

6:00

:00

PM

7:00

:00

PM

8:00

:00

PM

9:00

:00

PM

10:0

0:00

PM

11:0

0:00

PM

12:0

0:00

AM

Pow

er C

onsu

med

(kW

)

Composite Load Profile for Laivar MHP Site

Day 1 Day 2 Day 3 Day 4

Source: Ajith Kumara, 2015

0

5

10

15

20

1:00

:00

AM

2:00

:00

AM

3:00

:00

AM

4:00

:00

AM

5:00

:00

AM

6:00

:00

AM

7:00

:00

AM

8:00

:00

AM

9:00

:00

AM

10:0

0:00

AM

11:0

0:00

AM

12:0

0:00

PM

1:00

:00

PM

2:00

:00

PM

3:00

:00

PM

4:00

:00

PM

5:00

:00

PM

6:00

:00

PM

7:00

:00

PM

8:00

:00

PM

9:00

:00

PM

10:0

0:00

PM

11:0

0:00

PM

12:0

0:00

AMP

ower

Con

sum

ed (

kW)

Composite Load Profile for Donvar MHP Site

Day 1 Day 2 Day 3 Day 4

Source: Ajith Kumara, 2015

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 8

CHALLENGES FACING PEU IN MYANMAR

As of 2011, approximately 42% of Myanmar’s end-use of electricity is for “general purpose”,

comprising mainly of households, offices, and religious sites. The second most common end-use is

industry, at 36%. In turn, industrial activity makes up at least 26% of the country’s GDP (Global

Integrated Service, 2014). Challenges affecting the growth of cottage industries were elucidated by a

landmark study published in November 2014 by the Renewable Energy Association Myanmar

entitled, Assessment Report on Micro Hydro Practices in Myanmar, which concluded:

This assessment finds that there is a big gap in fulfilling Small and Medium Enterprise (SME)

development, which covered about 90% of the country’s economic production through the

utilization of micros hydropower. Most SME businesses based in the vicinity of villages,

especially many potential cottage industries of the community households, are found

demanding better quality and quantity power to enhance their income. This area of huge

potential in the socio-economic development of the country can be upgraded by supporting and

strategically targeting many micro-hydro electrification [sic] on a country-wide scale.

(Renewable Energy Association Myanmar, 2014, p. 21)

Furthermore, this study finds that "high and rising" community demand for firewood, to be used in

home industries and small industrial production, as a "critical threatening factor in the depletion of

micro hydro resources through the deterioration of the watershed" (Renewable Energy Association

Myanmar, 2014, p. 19).

These findings were substantiated in 2015 with the public disclosure of the World Bank's Project

Appraisal Document for the National Electrification Project. In it, the most cited hindrances to SMEs

were the low quality of electricity and the unpredictable tariffs associated with MHP projects.

Overall, however, the report found that…

…even among the [most affected] group of businesses…feedback focused on improvement in

quality of service rather than in reduction of the tariffs. The main recommendation made by all

three groups [of SMEs] was to reduce power fluctuations, increase voltage capacity and ensure a

24-hour stead supply. With these conditions met, business owners would be able to drastically

reduce their expenditures to diesel, which were considered more burdensome than electricity

prices3. Overall, 85% of businesses interviewed regularly use generators (100% of those in Chin

[State]). (The World Bank, 2015, p. 75)

More broadly, the present weakness of Myanmar's banking sector, has a causal relationship with

the often unpredictable and unsustainable village tariff schemes, which, in turn, dissuades would-

be PEU activities from taking advantage of the MHP resources available:

3 For Medium-sized industrial enterprises, “generators are still needed to address gaps in electricity supply (fluctuations

in capacity and brief black-outs)… The most common coping strategy reported was to increase prices for the consumer

when this was possible. Medium businesses coped by laying off some staff, reducing production and no longer holding

stocks (i.e. producing only when they had a specific order).” (The World Bank, 2015, pp. 78-79)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 9

The Myanmar banking system is poorly developed. No banks in Myanmar offer loans for

periods of more than 2 to 3 years, and re-financing of existing debt is extremely difficult. We

understand that Village Electrification Committees often are only able to borrow for 3 to 6

months to spread the cost of connecting ones village if needed. Hence, any finance that could be

obtained from the Myanmar banking system would require rapid amortization through tariffs or

subsidies (Castalia Strategic Advisors, 2014, p. 11).

Companies installing off-grid systems lack investment capital and working capital including

access to trade finance. Consumers have no access to financing for electrification which are

considered as consumptive activities. Overall, Myanmar’s banking sector is severely

constrained, with limited products, services, and outreach. The sector is largely confined to

fixed deposits and one-year fixed-rate loans with collateral requirements. While over 100

micro-finance license holders (of 236 licenses in total) are active in the country, they

primarily focus on easier-to-access peri-urban and dry-zone areas. Myanmar’s 2011 legal

framework for microfinance institutions (MFIs) has several challenges, including limited

differentiation between deposit and non-deposit MFIs, low capital requirements for deposit-

taking institutions, and an interest rate ceiling of 30% per year.49 Micro-finance for off-grid

electricity systems is in embryonic stages with only one company, Proximity Designs,

offering micro-financing in limited areas for solar lanterns. (The World Bank, 2015, p. 42)

In summary, the NEP PAD identifies the following challenges as prerequisite to the incubation of

cottage industries in rural areas (The World Bank, 2015, p. 42):

- Untested business models

- Lack of institutional capacity

- High cost of mini-grids versus the willingness of SMEs to pay

- Poor quality equipment/installations/electricity and lack of quality assurance

- Poor access to finance

- Lack of consumer awareness

RECENT EFFORTS TO INCREASE PEU IN MHP

Long before the NEP had taken shape, and more than a decade before the DRD was established,

JICA’s 6-volume study on renewable energy for rural areas took a serious look at PEUs for MHP

systems, and conducted brief feasibility reports for several sites. Those studies are reproduced here

in Annex 5. The study concludes by recommending both cross-subsidies and step-wise annual

membership fees to VECs:

In the comparison of economic benefit, both the night-time users and daytime users pay far less

than the economic value. There is a clear distinction, however, in that the night-time users are

small in terms of consumption but large in the number of customers, whereas the industrial

users consume large amount but are small in the number of customers.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 10

In consideration of this, the annual fee, which differs between night-time only users and daytime

users in terms of contract renewal or member-ship fees of the village electrification committee or

association, may be worth [sic]. (Nippon Koei Co., Ltd., 2003, p. 3.48)

There has been growing support for PEU activities in recent years from both government and

private sector, in line with future mini-grid planning, but a coordinated, integrated strategy

involving PEU and MHP has not yet manifested in any overarching off-grid strategy. Not long after

a new Government was seated in April 2011, policy makers approved the Rural Development and

Poverty Alleviation initiative which outlined eight priority areas (SNV Netherlands Development

Organisation, 2012, p. 11):

- Agriculture

- Livestock and fisheries

- Rural productivity and cottage industry

- Micro saving and credit enterprises

- Rural cooperatives

- Rural socio economy

- Rural renewable energy

- Environmental conservation

In April 2014, the Deputy Minister for MOST sent a letter to the CTF Trust Fund Committee

requesting support for “scaling up [the] renewable energy program”. In it, he identifies “access to

energy and productive end use of energy” as one of the key criteria for program and project

selection (Ngwe, 2014, p. 4).

In response to the challenges identified in the Assessment Report on Micro Hydro Practices in

Myanmar, a practice-to-policy workshop was organized by REAM and the Hydro Empowerment

Network of South and Southeast Asia to leverage regional hindsight by introducing best-practices

from Indonesia, Nepal, and Sri Lanka to Myanmar policy makers:

Participants identified a number of issues which must be accounted for if MHP market

opportunities are to be proven sustainable. Most notably, these include accounting increased

energy use from appliances (commonly rice cookers), the identification of large consumers (e.g.

cell and radio signal towers), the aggregation of a market for MHP equipment services, grid-

readiness of isolated systems, tie-ins with local market opportunities (e.g. agro-processing),

secondary workshop enterprises (e.g. vehicle repair and miscellaneous tooling for local clients),

tariffs with possible amperage subscription, ownership schemes (e.g. private vs. community

management and/or ownership). Participants concluded that MHP market sustainability is

subject to either adequate load or people who are willing to pay high tariffs. Chances of success

are high if MHP is developed around a productive use that can pay for energy and contribute to

rural economic growth. Lastly, grid-readiness of systems is a strong indicator of long-term

financial and market viability. (Hydro Empowerment Network of South and Southeast Asia,

2014, p. 17)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 11

Following up on the practice-to-policy workshop, PEU was again featured prominently during a

July 2015 workshop as a tool to "promote economic development without negatively impacting the

environment or land rights" (Bureau of Energy Resources, U.S. Department of State, 2015, p. 4).

Shortly thereafter, the NEP PAD outlined an off-grid subsidy strategy to encourage economic

growth and to incentivize investment in off-grid energy infrastructure, but this is considered only a

short-term solution – “expected to phase out gradually as access to commercial micro-finance

increases over time” – and will play its most prominent role during the first five years of the NEP

rollout (The World Bank, 2015, p. 13). A “social discount” of 10%4 would be applied to MHP

systems, bringing the average tariff rate down to an estimated $0.16 per kWh; the average

willingness to pay for residential usage in remote areas was found to be $0.21 per kWh 5 (The World

Bank, 2015, p. 16).

In September 2015, a group of private sector MHP developers organized as the Small Hydro Power

Association Myanmar (operating as a REAM affiliate) proposed to the DRD a comprehensive and

integrated geo-referenced data management system for understanding MHP potential, as part of a

larger, sectoral framework. Included in this concept note was the request for a preliminary demand

survey based on number of households in a given community and potential cottage industries

relative to agricultural land-use (Small Hydro Power Association Myanmar, 2015, p. 6).

Nevertheless, with or without regulatory support, the private sector seems keen to move forward

with PEU and MHP. As recent as October 2015, the state-owned enterprise Myanmar

Telecommunications Network (MTN) approached SHPAM seeking to use captive pico-hydropower

plants to power cell towers in remote areas of Kachin and Shan States. So far, this interest from the

private sector to capitalize on decentralized energy infrastructure, in tandem with PEU activities,

seems to follow a trend forecasted by Global Integrated Service Group of Companies in a

November 2014 briefing:

Small-scale hydropower, mini-grids and value-added agricultural facilities represent three

complementary business opportunities that can be jointly developed to reduce risk and

guarantee fair returns for investors while simultaneously delivering higher-quality, lower-cost

electricity to end users. (Global Integrated Service, 2014)

Despite strong evidence of multi-stakeholder interest in promoting and advancing PEUs in general, no

one organization or institution has yet been successful in sustaining a scalable link between PEU

incubation and Myanmar’s stratified MHP activities.

4 “The economic analysis does not take account of the positive environmental externalities associated with hydropower-

based electricity supply, such as the greenhouse gas emission reduction.” (The World Bank, 2015, p. 88) 5 It is worth noting that the NEP PAD does not consider PEU for MHP mini-grids explicitly; only village-scale MHP

systems for a few hundred households, not exceeding 100 kW were taken into account. “The analysis covers a typical

village-scale micro-hydro system with an installed capacity of 50 kW to serve 200 households over 15 years.” (The

World Bank, 2015, p. 16)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 12

FINDINGS FROM FIELD SURVEY

Between late December 2015 and early January 2016, a 10-day field survey was undertaken by

Green Empowerment’s Myanmar Projects Officer, in partnership with REAM and SHPAM, to

analyze benefits of PEU activities in poverty alleviation, minimizing gender disparities, and

improving rural livelihood for projects supporting cottage industries. The programme for this field

study, a brief synopsis of sites visited or discussed, and relevant photos is available in Annex 2,

Annex 3, and Annex 4, respectively. Through field visits to various sites in Eastern Shan State, and

informal interviews with local practitioners, the team ascertained the following:

- PEU activity in tandem with MHP development is a relative rarity in Myanmar. Only a minority

of village-scale sites feature any form of productive activities requiring three-phase power. Most

systems cater to household demand, relying on a flat-fee tariff structure. The survey team could

not find any instance of a captive MHP power plant being used in PEU applications. Due to

substandard record-keeping practices, the number of PEU activities in Myanmar, as well as the

true number of operational MHP systems, remains unknown and speculative at best.

- The arrival of the national grid to the site of a MHP system has profoundly different effects on

existing or prospective PEU activities depending on the quality and cost of the MHP system

itself. A summary of these cases and conditions can be found in Tables 1-4 below.

- The majority of community MHP systems rely on flat rate tariffs, whereas the larger, mini-

hydropower plants use analogue meters6. Only on the largest systems surveyed were there

digital electric meters. MHP operators should better understand the end-uses of power

generated in their system. More data elucidating the day-to-day load profile might then inform a

holistic PEU strategy.

- During the interviews, MHP practitioners who described their past experiences with PEUs, as

well as those who expressed a future interest in PEUs, indicated that the resultant value chains

would be primarily targeting export markets (e.g. markets outside of the local community) to

sustain the productive industry or industries, as opposed to PEUs geared toward local

consumption. They cited the requisite degree of business model understanding, value chain

analytics, and logistical management as precluding factors to PEU development.

- The present weakness of Myanmar’s private banking sector makes access to sustainable

financing for PEUs and/or MHP systems extremely difficult. Access to financing was noted as a

significant barrier in nearly every interview and is considered a lynchpin for more concerted and

scalable MHP/PEU activities to unfold.

- VECs may not reach consensus about how revenue from a community-owned system should be

used and, therefore, may not agree to reinvest the earnings as a revolving door fund for PEU co-

development.

- With or without a small power producer (SPP) regulatory framework, the symbiosis between

MHP and rural PEU will likely be a key to sustaining both sectors through the rollout of the NEP

over the next 15 years.

- While the effects of PEU activities on “big picture” development goals such as poverty

alleviation, minimizing gender disparities, rural livelihoods are well-documented in other South

and Southeast Asian countries such as Nepal, Sri Lanka, and Indonesia, these findings could not

be independently assessed during this Myanmar study due to the relative lack of existing

6 It was noted in one interview that the poor quality analog meters only register 30W loads and up, which created some

problems in households using many fluorescent bulbs.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 13

literature and/or raw data. This was exacerbated by a lack of representative examples during the

field visit. As noted in Annex 3, the only truly operational PEU arrangement was in Kyaing

Tong. Beyond household lighting, the Nam Khun and Nam So hydropower facilities in Kyaing

Tong electrified a host of SMEs (hotels, restaurants, etc.) and PEUs (saw mill, stone crusher, brick

maker, rice mill, etc.), but all of these businesses and industries operated at a medium- to large-

scale in a relatively urbanized area. From this sole example, no clear correlation could be

deduced, let alone extrapolated, with regards to poverty alleviation, gender equality, or rural

livelihoods.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 14

CASE I

National grid has arrived to a

MHP-viable area with an

existing mini-grid

CASE II

National grid has arrived to a

MHP-viable area without an

existing mini-grid

CASE III

National grid has not arrived;

isolated mini-grid exists in a

MHP-viable area

CASE IV

National grid has not arrived;

no mini-grid exists in a MHP-

viable area

CONDITION I

Reliable power

supply from national

grid and reliable

power supply from

mini-grid

1. Most consumers may

choose to connect to the

national grid upon arrival,

favoring lower tariffs. The

existing mini-grid may then

be (A) liquidated, (B) used

to electrify only the most

remote area residents, or (C)

repurposed as a captive

power plant for PEU

(assuming 3-phase

distribution).

2. Most consumers may

choose to connect to the

national grid upon arrival.

A mini-grid or captive

power plant may be

developed if (A) there is

enough forecasted demand,

and willingness-to-pay,

from remote household

consumers unreached by

national grid, and/or (B)

there is enough forecasted

demand from local existing

or upstarting PEUs

(assuming 3-phase

distribution).

3. Most consumers may

choose to connect to the

existing mini-grid. PEUs

may connect if the supply of

3-phase power is available.

4. A mini-grid and/or captive

power plant may be

developed if there is enough

time for assets to fully

amortize before the national

grid arrives (if the site is in

the demarcated grid-

extension territory), and if

(A) there is enough

forecasted demand, and

willingness-to-pay, from

household consumers,

and/or (B) there is enough

forecasted demand, and

willingness-to-pay from

local existing or upstarting

PEUs (assuming 3-phase

distribution).

Table 2: Cases affecting the viability of PEU under the condition that reliable power is available from the national grid and reliable power is available from the

mini-grid. NOTE: This table does not consider the case for grid interconnection, as there is no SPP regulatory framework in Myanmar at the time of writing.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 15

CASE I

National grid has arrived to a

MHP-viable area with an

existing mini-grid

CASE II

National grid has arrived to a

MHP-viable area without an

existing mini-grid

CASE III

National grid has not arrived;

isolated mini-grid exists in a

MHP-viable area

CASE IV

National grid has not arrived;

no mini-grid exists in a MHP-

viable area

CONDITION II

Reliable power

supply from national

grid and unreliable

power supply from

mini-grid

5. Most consumers may

choose to connect to the

national grid upon arrival,

favoring lower tariff and the

more reliable power supply.

The existing mini-grid may

then be (A) liquidated, (B)

used to electrify only the

most remote area residents,

or (C) upgraded for use as a

captive power plant for

PEU (assuming 3-phase

distribution).

6. Most consumers may

choose to connect to the

national grid upon arrival.

A mini-grid or captive

power plant may be

developed if there is

enough forecasted demand,

and willingness-to-pay,

from remote household

consumers unreached by

national grid. It is unlikely

that PEUs will develop on

the mini-grid without an

improvement to the

reliability of the mini-grid

power supply.

7. Most consumers may

choose to connect to the

existing mini-grid for

household lighting, but it is

unlikely that PEUs will

develop on the mini-grid

without an upgrade to the

mini-grid infrastructure and

power quality.

8. A mini-grid for household

lighting may be developed if

there is enough time for

assets to fully amortize

before the national grid

arrives (if the site is in the

demarcated grid-extension

territory), and if there is

enough forecasted demand,

and willingness-to-pay,

from household consumers.

It is unlikely that PEUs will

develop on the mini-grid

without the use of high-

quality mini-grid

infrastructure and

generation equipment.

Table 3: Cases affecting the viability of PEU under the condition that reliable power is not available from the national grid and reliable power is available

from the mini-grid. NOTE: This table does not consider the case for grid interconnection, as there is no SPP regulatory framework in Myanmar at the time of

writing.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 16

CASE I

National grid has arrived to a

MHP-viable area with an

existing mini-grid

CASE II

National grid has arrived to a

MHP-viable area without an

existing mini-grid

CASE III

National grid has not arrived;

isolated mini-grid exists in a

MHP-viable area

CASE IV

National grid has not arrived;

no mini-grid exists in a MHP-

viable area

CONDITION III

Unreliable power

supply from national

grid and reliable

power supply from

mini-grid

9. Most consumers living or

operating near to the

national grid may choose to

connect upon arrival,

favoring lower tariffs. It is

unlikely that existing mini-

grid customers would

disconnect from the mini-

grid. The national grid may

only provide a few hours of

usable power each day at

peak load times. This

arrangement would be

unsuitable for PEU

activities, which require a

near-constant supply of

high-quality daytime

electricity to operate

necessary machinery. PEU

enterprises may, therefore,

(A) maintain connectivity

with both the national grid

upon arrival and the

existing mini-grid, or (B)

choose to rely on the

existing mini-grid alone.

10. Most consumers may

choose to connect to the

national grid upon arrival,

but it is unlikely that PEUs

will develop on the national

grid without burdensome

backup generators ready on

standby. A mini-grid or

captive power plant may

therefore be developed if

(A) there is enough

forecasted demand, and

willingness-to-pay, from

remote household

consumers unreached by

national grid, and/or (B)

there is enough forecasted

demand from local PEUs

(assuming 3-phase

distribution).

11. Most consumers may

connect to the existing mini-

grid. PEUs may connect if

the supply of 3-phase power

is available.

12. A mini-grid and/or captive

power plant may be

developed if there is enough

time for assets to fully

amortize before the national

grid arrives (if the site is in

the demarcated grid-

extension territory), and if

(A) there is enough

forecasted demand, and

willingness-to-pay, from

household consumers,

and/or (B) there is enough

forecasted demand, and

willingness-to-pay from

local PEUs (assuming 3-

phase distribution).

Table 4: Cases affecting the viability of PEU under the condition that reliable power is available from the national grid and reliable power is not available

from the mini-grid. NOTE: This table does not consider the case for grid interconnection, as there is no SPP regulatory framework in Myanmar at the time of

writing.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 17

CASE I

National grid has arrived to

a MHP-viable area with an

existing mini-grid

CASE II

National grid has arrived to

a MHP-viable area without

an existing mini-grid

CASE III

National grid has not

arrived; isolated mini-grid

exists in a MHP-viable area

CASE IV

National grid has not arrived;

no mini-grid exists in a MHP-

viable area

CONDITION IV

Unreliable power

supply from national

grid and unreliable

power supply from

mini-grid

13. Most consumers living or

operating near to the grid

may choose to connect,

favoring lower tariff, but

not without weighing the

connection costs.

Customers may choose to

keep their mini-grid

connection to share peak

load demand between two

power providers. The

national grid and the mini-

grid may both only

provide a few hours of

usable power each day at

peak load times. This

arrangement would not be

suitable for PEU activities,

as in Box 9. The mini-grid

may be upgraded to

support peak household

demand and daytime PEU

activities.

14. Most consumers living or

operating near to the grid

may choose to connect,

favoring lower tariff, but

not without weighing the

connection costs.

15. Most consumers may

choose to connect to the

existing mini-grid for

household lighting, but it

is unlikely that PEUs will

develop on the mini-grid

without an upgrade to the

mini-grid infrastructure

and power quality.

16. A mini-grid for household

lighting may be developed

if there is enough time for

assets to fully amortize

before the national grid

arrives (if the site is in the

demarcated grid-extension

territory), and if there is

enough forecasted

demand, and willingness-

to-pay, from household

consumers. It is unlikely

that PEUs will develop on

the mini-grid without the

use of high-quality mini-

grid infrastructure and

generation equipment.

Table 5: Cases affecting the viability of PEU under the condition that reliable power is not available from the national grid and reliable power is not available

from the mini-grid. NOTE: This table does not consider the case for grid interconnection, as there is no SPP regulatory framework in Myanmar at the time of

writing.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 18

POLICY RECOMMENDATIONS

Based on the above literature review and field survey, the following is a list of policy

recommendations to further facilitate mutually beneficial MHP and PEU activity:

1. Targeted subsidies (or donor financing) to support the use of smart meters in all rural

electrification systems, especially MHP. The costs for smart meter technology, while more

expensive than traditional analog and digital meters, is not exorbitant and the influx of real-time

end-use data, which can then be analyzed, modeled, and optimized from a remote location,

would allow more informed policy decisions about high-quality MHP generation and PEU

incubation in the immediate future. This is arguably the easiest, cheapest, and most progressive

means of evaluating a mini-grid’s load profile.

2. The increased use of smart meters would help to ween consumers off of flat-rate tariffs, which

have been shown to discourage PEUs in similar markets (Tenenbaum, Greacen, Siyambalapitiya,

& Knuckles, 2014, pp. 266-267), and opens up opportunity to fine-tune cross-subsidized tariffs7,

even for a relatively small mini-grid. There would, however, also need to be a regulatory

environment that explicitly allows for cross-subsidies by SPPs. With this policy implemented,

PEUs would be greatly valued by the community as well as the utility, as increased industrial

usage would result in reduced household tariffs. As noted in the NEP PAD, however, studies

must be undertaken to determine “the extent to which tariff cross subsidies – for example from

business and industrial consumers to residential consumers – while lessening subsidy

requirements may inhibit economic development by expansion by industry.” (Castalia Strategic

Advisors, 2014, pp. 57-58)

3. Implementation of the following on-bill financing model for PEU support. Donors or private

banks could provide mini-grid operators with initial seed capital to create a revolving fund

to finance community PEU startups. This arrangement is a win-win-win for the mini-grid

operator (who receives double benefit from the return on investment and the increased

industrial power consumption), the PEU owner, and the local economy as a whole. As

described by Tenenbaum et. al.:

We think that extended payment programs operated by mini-grid operators should be

expanded beyond just connection costs. For example, ‘on-bill financing’ could also be

used to finance electrical equipment for productive uses (grain mills, and so on), to pay

for internal household wiring, or even to make improvements to a potential customer’s

house, such as adding a metal roof—which is sometimes a minimum requirement to

receive electricity…Similarly, if mini-grid operators could also finance the purchase of

7 “In most general discussions, cross-subsidies are defined to mean a tariff structure where some customers pay more

than their costs of supply and other customers pay less than their costs of supply. In developing countries, the three most

common forms of cross-subsidies are industrial customers subsidizing residential customers, high-usage residential

customers subsidizing low-usage customers, and urban customers subsidizing rural customers.” (Tenenbaum, Greacen,

Siyambalapitiya, & Knuckles, 2014, p. 137)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 19

productive-use machinery for their commercial customers, this, too, would lead to more

sales. We think that expanding extended payment programs would lead to a win-win

outcome because more rural households could be connected, more businesses could

expand their income-producing activities, and the mini-grid operator would increase

sales and be able to achieve financial viability sooner…The expansion of on-bill financing

requires both regulatory changes and the availability of financing. (Tenenbaum, Greacen,

Siyambalapitiya, & Knuckles, 2014, pp. 135-136)

SPPs should be allowed to recover the administrative and financing costs of providing

loans to actual or potential customers that will allow the customers to connect to the SPP

system and to facilitate productive uses of electricity. The loans could be repaid through

extended payment plans implemented through on-bill financing. The regulatory

language that has been suggested to implement this proposal would be:

The retail tariff structure may include as an allowed component of tariffs any interest

subsidies and administrative costs for on-bill financing such as financing of connection

charges, financing of internal wiring, construction of upgrades to dwellings necessary to

meet minimum electrification requirements, and the costs of purchasing electrically

powered equipment for productive uses.

If implemented, this could lead to a more rapid increase in the number of customers and

their average electricity usage. By providing a source of financing that might not

otherwise be available, it would provide a way to increase the SPP’s sales revenues and

allow it to become commercially viable at an earlier time. So it would be a win-win

outcome for both the SPP and its customers. However, simply changing the regulatory

rules by itself is not likely to accomplish very much. The problem is that most SPPs are

not likely to have the funds needed to establish such a line of credit for their customers.

Therefore, it has been recommended that bilateral and multilateral donors in Tanzania

should provide funding to SPPs through loans or grants that SPPs can use to establish a

line of credit for their customers. The customers would be allowed to use this line of

credit to finance expenditures that would allow potential household customers to get

connected and potential and existing business customers to purchase electrical

machinery that would increase their productivity. (Tenenbaum, Greacen,

Siyambalapitiya, & Knuckles, 2014, p. 258)

4. Incentives should encourage more captive use of MHP power plants, particularly in areas

where the national grid has already arrived, to optimize the use of MHP resources, bolster

the local village economy, and ensure that existing systems are not abandoned when the

grid arrives.

5. In addition to cross-subsidies, policies should be drafted to support step-wise annual

contract renewals and/or membership fees for the VECs8.

8 See Section III.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 20

6. Finally, individual power purchase agreements between MHP plant owners/operators and

village SMEs should be deregulated, and “the terms and conditions of the power sales

contract need not be reviewed and approved by the regulator…The rule would eliminate

any requirement for regulatory approval for sales to businesses that are deemed to be

eligible customers.” (Tenenbaum, Greacen, Siyambalapitiya, & Knuckles, 2014, pp. 257-258)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 21

ANNEX 1: Current Electricity Tariff Structure in Myanmar

Consumption (kWh/month) Kyat/kWh

USD/kWh

(exchange rate as of

late December 2015)

0-100 35 0.0266

101-200 40 0.0304

201++ 50 0.0380

Table 6: On-grid tariff rates for residential, SMEs, public buildings, and street lights

Source: (The World Bank, 2015, p. 94)

Consumption (kWh/month) Kyat/kWh

USD/kWh

(exchange rate as of

late December 2015)

0-500 75 0.0570

501-10,000 100 0.0760

10,001-50,000 125 0.0950

50,001-200,000 150 0.1141

200,001-300,000 125 0.0950

300,001++ 100 0.0760

Table 7: On-grid tariff rates for industrial and large commercial

Source: (The World Bank, 2015, p. 94)

Note: According to preliminary interviews with various decentralized renewable energy

actors, current off-grid tariffs for private projects range from about 300-600 kyats/kWh

(0.23-0.46 USD/kWh). These reports are substantiated by a World Bank scoping study

conducted in 2015 which revealed the levelized cost of energy to be between 220-860

kyats/kWh (0.17-0.66 USD/kWh) (Kumara, 2015).

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 22

ANNEX 2: Programme of the Field Study

31 December 2015

05.00-10.40 Travel from Yangon to Kyaing Tung

10.40-12.30 Interview with U Ye Naing9

13.00-20.00 Visit Nam Khun and Nam So mini-hydropower plants

21.00-22.00 Interview with U Ye Naing

01 January 2016

08.00-11.00 Interview with U Ye Naing and U Kyi Thein10

11.00-17.00 Visit Nam Su mini-hydropower plant

17.00-21.00 Travel from Kyaing Tung to Tachileik, interview U Zaw Min11

02 January 2016

08.00-13.00 Travel From Tachileik to Wan Nar micro-hydropower plant

14.00-15.00 Travel to monastery micro-hydropower plant near Tachileik

15.00-20.00 Interview with U Zaw Min

03 January 2016

09.00-11.00 Interview with U Zaw Min

11.00-14.00 Travel from Tachileik to Kyaing Tung, request immigration approval to stay in Mong

Ping

16.00-21.00 Travel from Kyaing Tung to Mong Ping, check in at immigration

04 January 2016

08.00-09.00 Interview with U Zaw Min

09.00-11.00 Assist KSW with Mong Ping site survey

13.00-18.00 Travel from Mong Ping to Kyaing Tung

05 January 201612

12.00-15.00 Interview with U Ye Naing

06 January 2016

07.00-17.00 Travel from Kyaing Tung to Taunggyi, via Tachileik

18.00-21.00 Interview with U Khun Kyaw13

07 January 2016

09.00-13.00 Interview with U Khun Kyaw

18.00-20.00 Interview with U Khun Kyaw

08 January 2016

10.00-14.00 Visit to Taunggyi Industrial Zone

18.00-20.00 Interview with U Khun Kyaw

09 January 2016

10.00-15.00 Interview with U Khun Kyaw

16.00-11.59 Travel from Taunggyi to Yangon

10 January 2016

00.00-07.00 Travel from Taunggyi to Yangon

Table 8: Programme of REAM/Green Empowerment field survey

9 Kyaing Tong Energy Co., Ltd. (KTE)

10 KTE and Kyi Thein Family & Co., Ltd.

11 Kyaw Soe Win Hydropower Co., Ltd. (KSW)

12 This day was meant to be spent in Mong Ping, but immigration issues precluded this from happening.

13 Rural Development & Hydro Electric Implementation Group

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 23

ANNEX 3: Brief Report on Sites Visited & Discussed

Name Location Notes

Nam Khun &

Nam So

Kyaing Tong Township,

Eastern Shan State

These two mini-hydropower sites, Nam Khun and Nam

So, producing each 3 MW and 1.8 MW, respectively,

maintain an Independent Power Producer arrangements

with the city of Kyaing Tong. Since completion of the

project, company shareholders have been investing in

SMEs (hotels, restaurants, etc.) and PEUs (saw mill, stone

crusher, brick maker, rice mill, etc.) in response to the

new supply of high-quality power supply. The Shan

Government retains ownership over generating assets,

while supply is controlled by the Myanmar Electricity

Supply Enterprise, the state-owned national grid utility.

The tariff rate for consumers is 100 kyats per kWh for

households and 160 kyats per kWh for industrial uses.

Nam Su Kyaing Tong Township,

Eastern Shan State

The 900 kW off-grid mini-hydropower system at Nam

So, located about 40 minutes outside of Kyaing Tong

proper, has been privately developed by Kyi Thein

Family & Co. Power is generated by two turgo-type

impulse turbines with mechanical governor flow control.

The mini-grid is currently being used as a test-bed for the

viability of PEU rice-milling cottage industry. One 80 kW

rice milling workshop has been established along the 3-

phase gridline, but, having never become viable as a

standalone PEU, it is only now being shown to investors

as a model project. The tariff rate for consumers on the

mini-grid is 200 kyats per unit. There is a 3-4 lakh

surcharge for new connections.

Wan Nar Tachileik Township,

Eastern Shan State

The 25 kW site at Wan Nar, located along the Mekong

River on the border of Thailand, has been in operation

for over nine years. In the beginning, an ice-producing

factory was established as a PEU to balance out daytime

and nighttime loads, but this enterprise was relocated

upon arrival of the national grid with high-quality

electricity sourcing from Thailand via Tachileik.

Mong Ping Mong Ping Township,

Eastern Shan State

The 500 kW site near Mong Ping is currently under

development by KSW Hydropower, expected completion

in 2016. There is an existing mini-grid distribution

network, developed by JICA. The distribution network

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 24

reaches most of the 1280 households, as well as a water

purification plant, an ice production facility, two

workshops, two automotive repair shops, one tire repair

shop, one print shop, and three fuel pumping stations.

Electricity is provided to those consumers for only a

couple hours per day from large diesel generators. There

is room for PEU expansion, as potential has been

identified to start a sugar cane processing plant once the

more reliable MHP system comes on-line. Right now,

financing is being sought from private banks and

international donors, but banks are clearly unfamiliar

with the business functionality of MHP systems. In

addition to strict bank loan terms, it is expected that the

national grid will arrive to Mong Ping by the year 2020.

The combination of these two factors puts great pressure

on the developer to start collecting tariffs soon as

possible.

Taung Chae Nyaungshwe Township,

Southern Shan State

The 100 kW MHP mini-grid at Taung Chae served

approximately 250 households since being commissioned

in the early 2000s. In 2015, the national grid arrived to the

Taung Chae site and the power plant was repurposed to

provide electricity solely to a large dam construction

project. With six rice mills in this village, there is

enormous future PEU potential to upgrade the MHP

system and establish a captive power plant arrangement.

Paung Paing Nyaungshwe Township,

Southern Shan State

The 75 kW MHP mini-grid at Paung Pine was

operational for nearly a decade before the national grid

arrived. Upon arrival, the MHP assets were sold by the

VEC, at good profit, to a private sector captive load

(whiskey distilling and sugar refining). The private

sector is now considering upgrading the MHP system for

future captive PEU activities. Brick-making has also been

identified as a potential PEU industry in this village

because bricks must be conventionally imported from

lower Burma or Mandalay at 100 kyats per brick. The

road conditions are good for hauling bricks between

Paung Paing and the nearest economic hub, Taunggyi, so

the supply chain could be maintained.

Near Lashio Lashio Township,

Northern Shan State

This 110 kW micro-hydropower mini-grid outside of

Lashio has been in operation since 2003. The national

grid arrived in this area in 2013, but provides only

intermittent power. The national grid goes offline

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 25

regularly, particularly during the rainy season. Outages

last between half a day and one whole day. There are

some SMEs which purchase electricity from both the

national grid line and the mini-grid line, but there are no

PEU industries in this village. The quality from both the

micro-hydropower system and the national grid is not

suitable for PEU activities.

Table 9: Field notes from site visits and interviews

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 26

ANNEX 4: Field Visit Photos

Figure 1: Three turgo-type turbines generate 3 MW at Nam Khun for Kyaing Tung Township.

Figure 2: Storage pond at Nam Khun holds enough water to meet 3-4 hours of peak load demand

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 27

Figure 3: Penstock under construction at Nam So, outside of Kyaing Tung

Figure 4: Stone crushing facility located outside Kyaing Tung uses power generated by Nam Khun

and, upon completion, Nam So

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 28

Figure 6: Civil works at Nam Su, outside of Kyaing Tung

Figure 5: 80kW productive end-use model facility on the privately owned and operated Nam Su mini-

grid

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 29

Figure 7: 80kW productive end-use model facility on the privately owned and operated Nam Su mini-

grid

Figure 8: Digital (left) and analog (right) meters used on the private Nam Su mini-grid

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 30

Figure 9: U Zaw Min, director of KSW Hydropower, describes the Wan Nar electromechanical

equipment. Turbine and drive system are shown at left and the control panel is shown at right.

Figure 10: U Zaw Min conducts a flow survey in early January 2016 in Mong Ping Township, the

site a future 800 kW site to power households and PEUs

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 31

Figure 11: U Khun Kyaw points out the location of Paung Paing village during an interview in early

January 2016

Figure 12: U Khun Kyaw leads a tour of a workshop in the industrial zone of Taunggyi Township

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 32

Figure 13: Mini-grid lines (left) and national grid lines (right) sit across the street from one another at

a site near Lashio. All or most businesses and homes in the area maintain connections with both grids.

When the national grid power supply cuts out, local households and businesses switch over to the

mini-grid using the switchgear shown below.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 33

ANNEX 5: Previous PEU Case Studies

Figure 14: Reproduction

of MHP Project Sheet

with identified PEU

activities.

NOTE: The Nam Lan

Rural Electrification

Project was discussed

in great detail in a 52-

page report embedded

in Volume 5 (pages 3-1

to 3-52) of the Study on

Introduction of

Renewable Energies in

Rural Areas in

Myanmar. In it, the

economics of

incorporating PEU into

the MHP system are

described at great

length

Source: (Nippon Koei

Co., Ltd., 2003)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 34

Figure 15:

Reproduction of MHP

Project Sheet with

identified PEU

activities.

Source: (Nippon Koei

Co., Ltd., 2003)

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 35

WORKS CITED

Bureau of Energy Resources, U.S. Department of State. (2015). Advancing Mini-Hydropower in

Myanmar Towards SE4ALL: Opportunities, Challenges and Next Steps. Naypyidaw: REAM,

HPNET.

Castalia Strategic Advisors. (2014). Myanmar National Electrification Program (NEP) Roadmap and

Investment Prospectus. Draft Final Road Map and Investment Prospectus.

Department of Rural Development, Ministry of Livestock, Fisheries and Rural Development. (2015).

Rural Electricity Access by MOLFRD. Workshop on Off-Grid Electrification in Myanmar.

Naypyidaw.

Global Integrated Service. (2014). Micro Hydropower Informational Presentation. Kathmandu.

Greacen, C. (2014). SPP Regulatory Framework Options in Myanmar. International Finance

Corporation.

Hokuriku Seiki Co., Ltd. & Infrastructure Development Institute, Japan. (2014). Myanmar Project

Formulation Survey on Micro Hydropower Generation. Ministry of Foreign Affairs of Japan.

Hydro Empowerment Network of South and Southeast Asia. (2014). Micro Hydro and

Decentralized Renewable Energy for Myanmar: Practice-to-Policy Dialogue, Applying

Lessons from Indonesia, Nepal, and Sri Lanka. Workshop Proceedings. Yangon: WISIONS of

Sustainability.

Kumara, P. G. (2015). Report of Off-Grid Hydro Power Assessment of Myanmar.

Ministry of Livestock, Fisheries, and Rural Development. (2014). Expression of Interest to Participate in

SREP -- Myanmar. Naypyidaw: Government of Myanmar.

Ngwe, T. (2014). Expression of Interest to Participate in SREP. Ministry of Livestock, Fisheries and

Rural Development, Union Minister's Office, Naypyidaw.

Nippon Koei Co., Ltd. (2003). The Study on Introduction of Renewable Energies in Rural Areas in

Myanmar. Tokyo: Japan International Cooperation Agency (JICA).

Renewable Energy Association Myanmar. (2014). Assessment Report on Micro Hydro Practices in

Myanmar. Yangon.

Republic of the Union of Myanmar. (2015). Preliminary Poverty and Social Impact Assessment to Inform

Environmental and Social Management Framework. Republic of the Union of Myanmar,

Myanmar National Electrification Project, Naypyidaw.

Productive End-Use of Micro-Hydro Plants in Myanmar

2/29/2016 36

Small Hydro Power Association Myanmar. (2015). Development Plan for Micro and Mini Hydropower

Implementation of the NEP of Myanmar, using a Public-Private Partnership Approach. Yangon:

Renewable Energy Association Myanmar.

SNV Netherlands Development Organisation. (2012). Feasibility of a national programme on domestic

biogas in Myanmar. Yangon: Food and Agriculture Organisation.

Tenenbaum, B., Greacen, C., Siyambalapitiya, T., & Knuckles, J. (2014). From the Bottom Up: How

Small Power Producers and Mini-Grids Can Deliver Electrification and Renewable Energy in Africa.

Washington, DC: Directions in Development.

The World Bank. (2015). Project Appraisal Document on a Proposed Credit in the Amount of SDR 286.9

Million (US$400 Million Equivalent) to the Republic of the Union of Myanmar for a Naitonal

Electrification Project P152936. International Development Association, Energy and

Extractives Global Practice East Asia and Pacific Region.