1. Republic of the Union of Myanmar Electricity Sector Financial and Regulatory Issues 18 May by Myanmar Energy Team The World Bank

2. An Overview of Myanmar Power Sector
Institutions:
Ministry of Electricity and Energy
Policies and planning
Regulatory roles
Transmission and system control
Enterprises & Corporations
Electric Power Generation Enterprise
Distribution functions: ESE, MESC, YESC
Fuel suppliers: MOGE, MPPE
Private sector participants
Private power producers (14 operating)
Private contractors/concessionair for distribution

3. An Overview of Myanmar Power Sector (cont.)
Recent Statistics:
Installed grid generation capacity ~ 4,900 MW
Hydropower ~ 3,100 MW (1,100 MW private)
Gas-fired ~ 1,600 MW (900MW operating; 622 MW private)
Coal ~ 120 MW
Installed off-grid generation capacity ~ 135 MW
Peak demand ~ 2,500 MW (February 2016)
Final electricity sales in FY2014/15
ESE & MESC ~ 6,333 million kWh (averaged 70 kyats)
YESC ~ 4,922 million kWh (averaged 79 kyats)
Electricity loss in FY 2014/15
Transmission loss ~ 3.3%
Distribution loss ~ 15 – 18%

4. An Overview of Myanmar Power Sector (cont.)
Electricity Tariffs:
Wide range 35 – 150 kyats/kWh
Uniform tariffs across the country and time of services
“Domestic tariffs” – largely residential customers kyats/kWh
Non-residential customers kyats/kWh. No demand charge
FY 14/15 financial loss ~ 5.3 kyats/kWh of final sales
Preliminary FY 15/16 loss ~ 22 kyats/kWh of final sales or over [240] billion kyats

5. Key Sector Financial Issues:
Revenue side:
Overall electricity tariffs below the cost of supply
Cost side:
Growing demand for electricity…more sales mean more losses
Increase in natural gas cost due to currency depreciation
Expanding investment to meet growing demand and electrification
Debt management:
Growing debt financing
Contractual obligations:
More contracts with private sector, requiring management of explicit and contingent obligations

6. Options for financial sustainability and regulatory policies:
Short-term
Purchase more electricity from existing hydro IPPs and neighboring countries
Prepare for electricity tariff changes to reflect the cost of supply and to encourage demand-side efficiency
Public relations outreach on policy changes, including tariffs
Provide transparent subsidies to MOEE/electric enterprises from the State budget.
Establish dedicated power sector regulatory function

7. Options for financial sustainability and regulatory policies:
Longer-term
Integrated energy planning & pricing
Continued generation, transmission & distribution efficiency improvement
Demand side management
Scale-up renewable energy sources (e.g. solar, biomass and wind) at the grid and users levels
Targeted subsidies for vulnerable consumers
Allow electric enterprises to retain profit for investment
Prudent debt management

8. Annex

9. Energy Sector Regulatory Arrangement in S.E. Asia
Source: Economic Research Institute for ASEAN and East Asia

10. Example: Thailand Electricity Tariff Structure
Base Residential Tariffs
Cut off at kWh/month
Energy charge only (no demand charge)
7-13 US cents/kWh
< 150 kWh “limited cross-subsidies” for 30 kWh…still cover variable cost
> 150 kWh tariffs fully cover cost. Vary profits.
TOU 7-17 US cents/kWh

11. Example: Thailand Electricity Tariff Structure (cont.)
Large Users Tariffs
Demand > 1000 kW
Time of Day structure
Encourage demand shift to partial peak and off peak
Same energy charge rates as Medium Users ( kW)

12. Example: Thailand Electricity Tariff Structure (cont.)
Large Users Tariffs
Demand > 1000 kW
TOU energy charge cents, depends on kV
Zero off-peak demand charge
Vary demand charge by voltage level

13. Q & A