Villages in Myanmar are taking electricity generation into their own hands, turning to solar micro-grids to power their homes.
One of the solar pioneers in the country is Yoma Micro Power. It specialises in solar-powered generation and micro-grid distribution. Each of its 51 micro plants can power a small town and its surrounding areas. By the end of 2019, Yoma Micro Power plans to build 200 more solar power plants, towards a total of 2000 by 2022.
GovInsider spoke with CEO Alakesh Chetia about the advantages of going off the grid, and how solar microgrids are kicking off a decentralised energy revolution in Myanmar.
Myanmar has one of the lowest electrification rates in Asia. 40% of households are not connected to the national grid, and of those, 4 million do not have access to any electricity. Although the government has made bold promises for universal electrification by 2030, grid expansion is slow and expensive. Even after the grid is expanded, the distribution network still has to be built – the cost of which is not covered by the government.
The smaller solar power plants are quicker to build, Chetia says, compared to the years of waiting for the national grid. “From the time you order materials and they arrive in Myanmar, through to commissioning the power plant, you’re looking at for four to five months.”
After the micro solar power plant has been built, it is linked to consumers in the surrounding village through a micro distribution grid which can be easily expanded in the future. Yoma Micro Power uses a back-up diesel generator and batteries to ensure reliable power.
The flexibility of micro solar plants also puts it ahead of other renewable energy options, such as hydropower, which dominates Myanmar’s energy mix at 65% of generated electricity. “The gestation period of a large hydro project is anywhere from five to 10 years,” explains Chetia. There are also the significant downsides of environmental damage and displacement of people required to build a large dam. “Instead of building a mega-plant and transporting all the power, you can build many small plants near the point of consumption.”
A decentralised energy revolution
Chetia believes that the decentralisation of the electricity sector in Myanmar will be similar to the telecommunications industry, which underwent a fast and furious transition in the past five years. Myanmar had the fastest ever mobile uptake globally after the liberalisation of the telecoms market in 2013, making landlines redundant. “A country like Myanmar, which does not have the grid infrastructure, has the opportunity to leapfrog directly into the decentralised model,” says Chetia.
In the near future, Chetia predicts, decentralised wind power generation might also be possible. This might even allow the development of a micro solar-wind hybrid power plant, which would cut costs from expensive battery storage.
Beyond rural electrification, decentralised electricity provision has a lot of advantages over traditional central grid: grid security, reliability, speed. It’s also easier to integrate renewable energy sources. This trend could become a global energy revolution. US, Taiwan and Korea are among the many developed, fully electrified countries investing in the emerging technology. “Decentralised electricity is more resilient,” says Chetia. “A centralised grid is more susceptible to weather, terrorism, or even foreign attacks.”
The challenge of scale
Sunny Myanmar is well-suited to solar power. However, many solar micro-grid enterprises have failed to take off, because of an overreliance on government subsidies. As the electricity consumption of rural households in Myanmar remains very small, the challenge for businesses is to turn enough profit to expand beyond initial pilots. The Department of Rural Development’s subsidy program has been running for three years with 36 power plants constructed so far.
Yoma Micro Power does not take any government subsidies. In addition to rural electrification, they service telecommunications companies with electricity. These anchor customers allow them to provide electricity to villages at an overall cheaper price than national grid.
The strength and promise of Yoma Micro Power’s business model have led the International Finance Corporation and Norwegian investor Norfund to take up large shares in the company since its initial demonstration in 2017.
Misperception of the technology remains a pernicious obstacle, Chetia says. Local and provincial government officials are often unaware of the capabilities of solar. “I have been to meetings with the Ministry of Energy and Electricity, and they said, solar is not right for Myanmar,” recounts Chetia. “Often, they are thinking of solar as the mega solar plant. So then we have to educate them about decentralised power generation.”
But misperceptions can be combated with time, persistence and continued success. Global attention towards the potential for microgrids in Myanmar has been gathering, with market assessments and demonstrations projects conducted in recent years by the Rockefeller Foundation and the Asian Development Bank.
Going forward, Yoma Micro Power has a vision to expand into the region. “Once we have done this here in Myanmar, we can replicate this in Philippines and other countries with similar problems,” says Chetia.
For budding entrepreneurs, Chetia says his advice is to think big. “There are 24,000 villages in Myanmar without electricity,” says Chetia. “It’s a question of having the right business model, so that you can do something more impactful than just building 20 or 30.”
The project of rural electrification requires a sustainable business model. Once this has been achieved, the outlook is sunny for solar micro-grids.