Gasifier Powered Mini-Grid in Myanmar: A Successful Public-Private Partnership driven by Private Investments.

I had heard a lot about the entrepreneurs in Myanmar who develop and operate renewable energy mini-grids from several experts including Dipti Vaghela who coordinates Hydro Empowerment Network (HPNet), that I jumped at the opportunity offered by U Aung Mynt General Secretary of Renewable Energy Association of Myanmar (REAM) to join the REAM team on a visit to the village of Hlaing Phone in the Ayeyarwady delta. The trip to Hlaing Phone in February 2017 wasn’t easy we had to drive 5 hours each way with the final stretch through unpaved roads and the read trip was followed by a 45 min long tail boat ride through the Ayeyarwady. The journey through the rice fields, fish farms, the labyrinth of local waterways and the local rural life was so interesting that we did not realise the time spent on travelling. It also puts into perspective how remote some of Myanmar’s villages and how difficult access is.

Hlaing Phone is an agricultural and fishing village with over 250 households and a market which is being powered by a 250 kW biomass gasifier using risk husk as fuel, since the last two years. The gasifier was indigenously designed and developed by U Soe Tint Aung of Royal Htoo Linn (RHL) who have already installed close to 800 gasifiers all over Myanmar including 145 village electrification systems. These gasifiers also address a major environmental problem as the risk husk from rice mills is often dumped into local rivulets and waterways causing significant damage to the local aquatic ecosystem. Gasifiers using rice husk from mills can convert this agro-residue to energy. While a number of local manufacturers of gasifier exist, many technologies struggle to manage and clean the coal tar from the producer gas resulting in frequent cleaning and replacement of gasifier and engine components and direct discharge to waterways. The gasifier installed, owned and operated by RHL consists of a multi-stage coal-tar cleaning using water sprays and biomass and the water for spray cleaning is also recirculated using a system of 3 settling tanks. The system also provides employment to 5 people from the village who are involved in fuel management, operating the gasifier, managing the electrical network and tariff collection.

The Operators of the Gasifier Powered Mini Grid at Hlaing Phone                                     (Credits: Sustainable Energy Associates)

There is an electricity committee at Hlaing Phone which supports the RHL team in managing the system. Of 250 households in the village 200 are already connected to the electrical mini-grid, with the remaining households continuing to use their solar home systems or unable to afford about $ 30 required for purchasing the meter and carry out internal wiring. A previous gasifier based system is defunct now. The electricity supply is much more reliable currently with the current system without voltage and frequency variations which in the past have resulted in damages to electrical equipment. The electricity consumption is metered and collected on a monthly basis by RHL with an average monthly household level consumption of about 40 Kwh with the major applications being lighting, television and radios, rice cookers. Some households also have refrigerators, air conditioners, washing machines etc. The electric supply is for 17 hrs daily from 6 AM to 11 with an average monthly household expenditure on electricity being $ 18/month. This is primarily because, the local electricity tariff is rather high at $ 0.44/kWh however there was a complete willingness to pay these higher tariffs for electricity which was reliable and of better quality.

Once we left the village hall and the electricity committee, we could see electricity making a significant difference at homes and at the village market place. Shops are able to increase sales of beverages through refrigeration and women owned cloth shops able to make embroidered Longyis using electric sewing machines increasing incomes. Homemakers seemed very happy with the reliable electricity and use electric rice cookers and electric frying pans and reiterated that the higher tariff was not a problem compared to the convenience of electrical appliances. Some households also use refrigerators and washing machines all of which seemed to benefit women significantly. The most significant aspect of the mini-grid was that it was completely financed by the community and the private enterprise, and operated in the absence of government support and regulatory oversight. There were no international collaborators involved and a clear case of a locally developed appropriate technology operating in a decentralised and geographically remote location with private investments and private operation in partnership with a happy and satisfied community. I understand from U Aung Mynt and Dipti that there are 1000s of such local mini-grids all over Myanmar which follows similar financing and business model using hydro and biomass gasification technologies.

Electric Sewing Machines Supporting Women-led Business                                  (Credits: Sustainable Energy Associates)

The following week, I was in Nay Phi Taw, the capital of Myanmar and a very different setting to Hlaing Phone where I had the privilege of listening to several global key experts convened by the World Bank on financing, business, policy, regulatory and technology aspects of mini-grids, discuss global best practices. I was impressed by the level and range of experience in the space and was pleased to understand the commitment and resources being offered by development agencies to help Myanmar achieve universal electrification by 2030. With the right approach and an orderly development, Myanmar should be able to provide reliable and affordable energy to all of its population leveraging the existing technology, finance and business ecosystem which currently exists in the country in the mini-grid space. My thoughts on some of the aspects to consider in a future accelerated electrification drive in Myanmar could be:

  • Existing mini-grids and mini-grid operators as well as the support ecosystem should be leveraged in electrification plans and efforts should build on existing private sector led electrification experience. You have a unique opportunity to have a bottom-up model of rural electrification in Myanmar;
  • While relatively difficult to implement in Myanmar, financing should be based on cost-recovery principles and should incentivise electricity generation business models than subsidise capital expenditure of future mini-grid and off-grid systems. This is important as large offerings of subsidies may encourage traders to benefit more than the private sector, communities and financiers;
  • There is a need for cross-subsidy mechanisms or incentive mechanisms to moderate the high cost of generated electricity in decentralised mini-grids as well as finance the initial cost of initial electricity access. There is scope for energy policy and regulation to play a facilitating role here;
  • There is a need for an independent regulatory agency which will be able to regulate the electricity sector including grid extensions, mini-grids and off-grid electrification with the objectives of affordability, quality and safety. There are a number of sustainable energy regulatory instruments, toolkits and examples to help underline the importance of the role of independent infrastructure regulation in delivering quality and affordable services to consumers;
  • The rural electrification framework could be technology neutral and could allow private sector and public-private partnerships to choose technology options for electrification based on levelised cost of electricity supply. All options including renewables, fossil fuels, hybrid systems and grid extensions should preferably be considered in the technology mix;
  • An integrated approach that covers both thermal and electrical energy where cooking and cooling energy needs in Myanmar are simultaneously addressed by the mini-grid enterprise or distribution operator through electrical appliances or cleaner fuels such as Liquefied Petroleum Gas (LPG) is likely to address rural energy access and indoor air pollution effectively while increasing the viability of the electricity business;
  • A robust framework for quality control and testing should be placed on electricity conversion systems and electrical network equipment to ensure superior technical performance and avoid manufacture, import and use to inferior equipment. Consideration should also be given towards and appliance energy efficiency and labelling scheme that covers key electrical appliances;

I am sure that many of these aspects are already being considered by the Myanmar government and other key stakeholders in planning and implementing rural energy efforts. I hope to remotely follow these developments and to return some day to find more Hlaing Phones where electrification is done on a PPP mode within a progressive policy and regulatory framework.