When the Foreign Investment Law was introduced in 2012, many foreign firms flooded to Myanmar to invest in the manufacturing industry, due to lower wages and abundant workforce in the country.
With Myanmar becoming the manufacturing hub for foreign direct investment, economic growth in Myanmar is expected to exceed that of ASEAN – 5, which includes: Indonesia, Malaysia, Philippines, Thailand, and Vietnam.
The growth in industrialization as well as economic development as a whole has led to an increasing need for more electricity. Although Myanmar is rich with natural resources such as hydropower, gas and coal that can be used to generate electricity, it has the lowest electrification rate in Southeast Asia. The country also foresees a 15% increase in electricity demand every year.
However, as can be expected, the industry plan issued by the Ministry of Industry in 2011 and re-published again in 2016 has addressed insufficient supply of electricity as being one of the main challenges towards industrial development in Myanmar. Many firms have complained about the unstable power supply, which raises the need to invest in backup generators that are too costly for the long term. In fact, some businesses even decide to shut down temporarily, just to avoid the cost of backup power.
If Myanmar wants to see a continual industrial development, its government should prioritise delivering stable, efficient and affordable power supply.
The main challenge right now is how to build a sustainable electricity supply that provides that the right amount of power to the customers at the right price.
Recently, most developed as well as emerging countries have started to embrace a new technology called the smart grid, to be able to manage power more effectively. In some countries such as Singapore, Thailand, Indonesia and the Philippines, smart grid systems, including distribution automation (DA), substation automation (SA), and advanced metering infrastructure (AMI) have been launched, only after going through many trials of analysing different technologies.
What is Smart Grid?
Unlike the traditional grid, smart grid works similar to the way online banking does. You will not need to wait for monthly statement to know how much power has been used. Smart meters or advanced metering infrastructure (AMI), and other systems deployed throughout the grid, would allow you to keep track of the amount of electricity you use, when you have used it and the cost.
Hence, smart grids introduce a two-way dialogue where electricity and information are constantly being exchanged between the provider and customers. The technologies involved are meant to work with the grid to cater to changing demands, provide more efficient transmission and restoration after power disturbances (which occur frequently in Myanmar).
Additionally, real-time pricing would even help you save money, as you would be informed about when to use less power or when electricity becomes most expensive.
Myanmar and Smart Grid
By now, smart grid might sound like a solution, a developing country such as Myanmar should not be considering, given its lack of existing infrastructure.
However, the lack of infrastructure might actually mean that Myanmar has fewer barriers to implement a smart grid. In contrast, developed countries with established traditional grids would need to bear additional costs and effort, not only in terms of technical barriers such as integrating new solutions into the existing system but also in regulations revolving around the aged infrastructure.
Hence, Myanmar might have the opportunity to jump straight to building smart grid to solve its low electrification, with the right economic framework.
Current situation in Myanmar
Foreign banks, namely United Overseas Bank (UOB) and Asian Development Bank (ADB), also ventured to help counter Myanmar’s unmet demand for energy supply through financing a new power plant and rehabilitating power distribution network respectively.
A new energy master plan is on the way as well in order to improve energy sustainability plan as well as to allow investors to have a share in electricity production, distribution and transmission.
Nevertheless, from a macro point of view, a smart grid scheme should be considered to provide electricity in Myanmar. Of course, it will take years to mature, due to the state of the current traditional power grids, lack of infrastructure, skills and money. However, the future benefits outweigh the cost for commitment in these smart grids.
Are you interested to learn more about how smart grid should be implemented in Myanmar? Come to our 18th edition in Yangon, happening on 23-24 November, to hear from experts talk about how to electrify power grids.
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