A faster way to fix electricity

The country’s power demands will increase substantially in the near future, creating an opportunity to embrace renewables.

By DAVID FULLBROOK | FRONTIER

TAMING RIVERS with dams in order to produce electricity has sparked controversy in Myanmar. Due to social and environmental impacts, projects such as the Myitsone dam on the Ayeyarwady River, and proposed dams on the Thanlwin River, have been met with resistance from various quarters.

Despite this, more dams are reportedly proposed as part of a revised energy master plan.

More electricity is certainly required. Many people believe power cuts in Yangon during this year’s hot season were worse than in previous years. That is unsurprising.

Demand is increasing rapidly in the commercial capital. New buildings are mushrooming. People are buying more goods such as air-conditioners, washing machines and televisions. Shops and factories are expanding.

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And it’s not only in Yangon; other cities, such as Mandalay and Mawlamyine, are also developing rapidly.

With electricity demand growing fast, time is a critical factor when screening options for increasing supply. Hydropower projects typically take seven to ten years, if all goes well.

Most are late and over budget, according to the findings of a global study of 245 hydro projects led by researchers at Oxford University. Similar findings emerged from a study of electricity-infrastructure projects led by Sussex University.

The Oxford study concluded that hydro planners and developers are overly optimistic.

All alternatives – except nuclear – are faster to build than hydro. Some small gas and oil power plants can be built in six months, but are expensive. Due to pollution, health and environmental impacts are also high.

Solar and wind are almost as fast. Large solar projects, even hundreds of megawatts, have been built in six months, although a year is more typical. Similarly, large onshore wind projects are built in less than two years, and sometimes a year.

Projects are also less risky for investors and developers. The Sussex University team found solar and wind are less prone than types of power plants to delays or cost overruns.

Time matters, because as projects drag on, so do risks of bad weather or trouble with suppliers. Larger projects, like hydro-power dams, tend to be more complicated. The organisation of thousands of workers involved in several tasks can lead to major complications and delays.

Large solar and wind projects are less risky because they are simpler. As most of the parts are made in factories, rather than constructed on site using steel and concrete, costs change little during construction.

Moreover, the next project usually costs less because expanding factory production benefits from learning-by-doing and economies-of-scale. For example, solar modules in 2015 cost 80 percent less than 2010. 

That trend is expected to continue. In 2015, the global average of unsubsidized solar electricity cost 13 US cents/kWh, and 7 cents/kWh for wind. In 2025, the International Renewable Energy Agency expects solar will cost 6 cents and wind 5 cents.

In places embracing the opportunity with strong policy, such as California, Chile, Morocco, South Australia, Texas, UAE, and Uruguay, solar and wind deals are regularly below 10 cents/kWh, and sometimes down to 5 cents/kWh.

In India, solar is challenging coal, even without accounting for costly health and environmental impacts.

Myanmar’s first large solar and wind projects might cost more, but once the industry scales-up costs will fall quickly to levels seen elsewhere. In contrast, hydro or fossil-fuel project costs are stable, if not rising globally.

So, are solar and wind the solutions to Myanmar’s power shortages? Not entirely. On the plus side development is fast and pollution negligible.

Without hydro, rivers are left to flow naturally, enriching downstream farms and fisheries, the foundation of Myanmar’s food security. That makes solar and wind attractive because investors earn their money back faster and without the conflicts that often accompany hydro.

However, output fluctuates with the weather. That is manageable with careful planning, such as selecting locations to ensure effective output.

Furthermore, existing hydro-power projects can function essentially as giant batteries to fill dips in solar and wind output.

Seasonally, wind and hydro compensate for lower solar output during the monsoon, whereas solar output rises during the dry season helping to conserve hydro. In that way the value of each resource to consumers is maximized.

Pursued systematically, holistic power-system planning, informed by experience from around the world, could develop gigawatts of solar and wind in several years. Concurrently, existing hydro assets can be upgraded to improve reliability and increase system value. Electricity supply would rise quickly in ways that are socially acceptable, more resilient, and use domestic sustainable-energy resources. A triple-win strategy.

Exploiting powerful technological trends, as many countries are, is the key to fixing electricity supply in years, not decades. Effective policy can allow this to happen by targeting energy resources based on develop and security.

It may seem a leap, but Myanmar has already made a leapfrog in telecommunications. Why spend a decade building a gigawatt of hydro instead of a few years building gigawatts of solar and wind like many countries are doing? What’s to lose?

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