Govt still mulling hike in electricity tariffs, explores solar options

The government is once again discussing plans to raise electricity charges to partially offset widening losses from subsidising electricity tariffs. “We need to increase prices quickly as electricity consumption is now expected to rise by more than expected,” said U Soe Myint, deputy permanent secretary of the Ministry of Electricity and Energy (MOEE).

According to an April government survey, electricity consumption is expected rise by 19 percent per year for the next 12 years. “We had previously estimated that consumption will rise at a rate of 15pc per year until 2030,” U Soe Myint said at a Nay Pyi Taw press conference on August 10.

While no timeframe was given on exactly when this would happen, U Soe Myint noted that electricity prices would be hiked only for those among the population who can afford it.

He said middle-income earners and above will be required to fork out more to cover for the rural population who are not able to afford paying for electricity. The latter is expected to comprise around 30pc of the population.

According to statistics from the Ministry of Planning and Finance, yearly losses from the Myanmar Electrical Power Enterprise rose by nearly 45pc to K608 billion in 2017-18 from K420 billion in 2016-17.

Losses are estimated to amount to K309 billion during the six month interim period between April and September and wider to K629 billion during the 2018-19 fiscal year starting October 1.

The last tariff hike in Myanmar took place during the term of former President U Thein Sein.

While the current government has mulled a further raise in tariffs since it took office, it has yet to implement an actual hike.

Renewable option

The government hasn’t been sitting idle though. To lighten the burden of having to subsidise tariffs, the MOEE is aiming to have up to 8pc of the electricity required by the country up until 2021 powered by renewable energy, according to U Win Khine, union minister of the MOEE, at an industry meeting on August 8.

Subsequently, it wants to use renewable energy to generate power for up to 12pc of the total electricity required.

Plans are now underway to for the Minbu solar power plant, the first solar power plant in Myanmar, to begin generating electricity in February 2019, said U Win Khine. The plant is located in Magway Region.

The Minbu solar power plant, which has the capacity to generate 170 megawatts of electricity, is being developed by GEP (Myanmar) Co under a Build, Operate and Transfer arrangement with the government. Construction began in 2018.

The plant will generate an initial 40MW of power when complete next year. That’s enough electricity for 210,000 households in Magway, according to U Win Khine’s estimates.

Currently, Myanmar has plans for six solar power projects generating a total of 470MW of energy. This includes the Minbu project as well as plants in Myingyan and Wundwin in Mandalay.

About 60pc of the country’s electricity was generated by hydro power in 2017, while just over a third is generated by gas. A small percentage was generated by coal power, according to the MOEE.

Under the National Electricity Master Plan, the ministry is aiming for an equal energy mix generated by hydro, gas, coal and renewable power by 2030.

Consequently, government subsidies of electricity tariffs are expected to rise, resulting in higher losses “With consumption expected to rise by more than we had expected, it is impossible for the government to continue subsidising tariffs at this rate. It is not sustainable over the long term. We have to raise electricity prices as soon as possible,” U Soe Myint said.

Source: Myanmar Times

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