The Irrawaddy Magazine

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Yangon Switches On Posted: 16 Apr 2014 10:21 PM PDT Power to the people: Providing affordable electricity for ordinary people and businesses is a fundamental step in Myanmar's drive to catch up with other countries. (Photo: JPaing / The Irrawaddy) YANGON — On the industrial outskirts of Yangon, a rusted chimney exhales wisps of white smoke as a three-decade-old gas-fired power station chunters on. Just meters away on the same compound in Thaketa Township, a low mumble, but nothing in the way of visible emissions, is coming from a row of 16 boxed-up gas-fueled engines—Austrian-produced Jenbacher machines from US firm General Electric. With new technology like this, there are signs Myanmar is gaining ground in its struggle against the chronic energy crisis that held back its people, and its economy, for years. Less than a quarter of the estimated 60 million population has access to electricity, and those businesses brave enough to set up here despite an unreliable power supply are forced to buy and run their own generators. The new 50-megawatt power plant is run by Maxpower Thaketa—a local subsidiary of Indonesia-based Navigat. "You can see that the engine color is green, so you can see we are environmentally friendly," jokes U Henry Zaw Tun, Maxpower Thaketa's business development manager, on a visit to the plant in March. The machines are state of the art. Their vital signs are watched over on a single computer monitor. To catch problems in their workings before they occur, engineers in blue jumpsuits peer at the screen of a small digital camera, which projects an image from an endoscope inside one of the engines' bowels. To produce about the same amount of power as the new plant, the old Thaketa plant, a gas-powered turbine generator run by the state-owned Myanmar Electric Power Enterprise, burns twice as much gas, U Henry Zaw Tun says. "And we only use 10,000 gallons of water per year for cooling. They use 300,000 to 400,000 gallons per day!" he says. With an investment of US$35 million, work was completed in August 2013. In February, Maxpower was rewarded with a power-purchasing agreement under which the Myanmar government provides the gas and buys back the power produced. The build-operate-transfer agreement, the specific details of which have not been disclosed, will see the site handed over to the government in 30 years. Earlier reports said the contract was drawn up with the help of the Asian Development Bank (ADB), but it was in fact drawn up bilaterally with the government, although it meets World Bank standards, according to Maxpower. In a statement to The Irrawaddy, the company said the contract terms had been approved by President U Thein Sein's cabinet and that the government planned to use it as a "template for future power projects" as a new generation of power plants arrives. Yangon currently sucks up about half of the country's total supply of about 1,850 MW of energy, and demand in the former capital is met by a mixture of hydropower and existing gas generation. In the hot and dry months from March to July, however, demand is driven up by air-conditioners, and supply is shorter as lower water levels mean hydropower can contribute less energy to the grid. While the government in the long run is looking to exploit the country's huge river network for more hydropower to fuel development, those projects are politically sensitive and take a long time to get online. Two years ago, when the hot season caused widespread blackouts in the country's commercial capital—sparking candle-lit demonstrations—the government put out an open invitation for companies to come forward with fast-track solutions to meet fast-rising energy demand. Cooking with Gas Alongside the new Thaketa plant, a new 240-MW gas plant is about to begin producing power at Ywama, with turbines donated by the Thai government. According to Yangon's state-run provider, the Yangon Electricity Supply Board (YESB), gas generators—one at Ywama in Insein Township, one run by Toyo-Thai Corporation Plc in Ahlone, and another at Hlawga in Mingaladon—are at present producing about 230 MW of power combined. Nationwide, gas accounts for about 550 MW, compared to 930 MW from hydropower, according to the YESB. But gas is set to contribute more to Myanmar's energy mix, especially as the amount of gas coming onshore increases. Although existing projects controversially send the majority of the gas extracted from Myanmar's seabed abroad, a proportion stays in Myanmar. The government has promised to keep more of the gas from future developments for domestic use. The Yangon gas generators are being fueled by Total's Yadana project in the Andaman Sea. The Shwe field in the Bay of Bengal is also now sending gas ashore, and the Zawtika field, developed by Thailand's PTTEP, was expected to start producing this hot season. The World Bank is funding the upgrade of an aging gas power plant in Thaton, Mon State, which is expected to reach 106 MW. Also in Mon State, Singaporean company Asiatech Energy has announced it has secured funding for a 230-MW gas-fired plant in the state capital, Mawlamyine, to be completed in late 2015. Also on the horizon is a short-term power-supply project that will see Florida-based company APR Energy install a 100-MW gas-powered plant in Kyaukse, Mandalay Region, to burn gas from the Shwe project. The company lauded its deal to bring a "turn-key" power plant—beginning sometime between April and June and running to late 2015—as a "bridging solution for the medium term while the country develops its long-term power generation infrastructure." Both APR and Maxpower told The Irrawaddy they were looking to take on more power supply projects in Myanmar. "We would like to invest further in Myanmar," said Clive Turton, APR Energy's head of business development for the Asia-Pacific region, declining to give details of "several" other projects the company was looking at. Demand for power is rising nationwide by 12 percent per year, said Mr. Turton, who said he believes natural gas will be an important tool as the country's energy demand grows. "I absolutely think [natural gas] should be a major part of the solution," said Mr. Turton. Alongside natural gas developments, the government has numerous hydropower and coal plans, but it is a challenging task to meet rising demand, which could reach 5,000 MW by 2020, according to a 2012 energy sector assessment conducted by the ADB. The Summer Shortage U Maung Maung Latt, the vice chairman of YESB, said that despite an expected annual increase in demand of 15 percent, the city would not this year see the rolling power cuts residents are used to. As of early March, infrequent power cuts had begun in downtown Yangon, but not on the scale seen in previous years. "This summer, both the production rate and the consumption rate will be up in Yangon. Normally consumption is about 800 MW, but in this dry season it could rise to 1,000 MW in Yangon alone," he said. "But the recent situation is that production and consumption are balancing." Unsurprisingly, given the protests of the past, YESB makes sure residential power demand is met before sending power out to industrial zones. U Maung Maung Latt was hopeful, however, that the city's factory districts would see some benefit from the city's newly bolstered power supply. "For certain, it won't go back to zero hours of power for industrial zones, like last year," he said. "I can say this year there will be more electricity not only in residential areas, but also in industrial zones. We are receiving more power from gas turbines and dams are saving water through new technology. Also, we're upgrading the national grid and other related power lines." He said industrial zones would get at least 18 hours of power a day—with power cuts timed during the peak evening hours. That is good news for manufacturers, whose alternative is to run diesel generators. Industrial Growth Stifled U Myat Thin Aung, the chairman of Hlaing Tharyar Industrial Zone, which houses almost 600 factories in western Yangon, said using generators was more than four times as expensive as the state-subsidized power from the grid—costing just 75 kyat ($0.08) per kilowatt hour. When cheap power is not available, some factories simply close their doors, he said. "If production costs increase, sales profits go down. Eventually, factories have to shut." Hlaing Tharyar is one of 20 mostly small industrial zones in Yangon that altogether demand about 165 MW of power. Myanmar's planned large special economic zone projects in Thilawa, Dawei and Kyaukphyu will have their own off-grid power sources. U Myat Thin Aung said some factories were keen to run their own gas-fired power generation, but the government had not come forward with a reliable source of cheap gas for this. The country's low-cost labor partly offsets the high cost of powering a factory and other infrastructure bottlenecks. Investment in simple, labor-intensive garment factories is reportedly rising, with investment coming from China, Taiwan and Hong Kong. But investment in heavy industry is yet to take off. "The electricity shortage in Myanmar is one of the biggest challenges for foreign heavy industry to invest here," said U Myat Thin Aung. "[Heavy industry investment] will stay away as long as the government can't supply enough electricity for local industrial zones." A Little Help Since Western countries began embracing Myanmar and its reformist government, the country's power shortage—in the face of abundant resources—has become a favorite cause for foreign donors. In January, the visiting World Bank President Jim Yong Kim pledged $1 billion in aid and investment over a number of years to help expand electricity provision. Japan's international aid agency, JICA, is developing a nationwide master plan for power in Myanmar. "All the development agencies spent the large part of 2013 talking to the government about areas of support. They have divided up all the areas that the government asked for help with," said Grant Hauber, the ADB's principal public-private partnership specialist for the Asia-Pacific region. Donors were setting up as many as 25 projects on power in Myanmar as part of a "divide and conquer" approach to tackling the numerous problems in the power sector, he said. "A lot of the projects are going to be implemented simultaneously so there will be a fairly significant uptick in grid capacity," he added. There is also work underway by the ADB and others on improving the national grid to reduce power losses, and to upgrade the national grid's "backbone" to a 500-kilovolt line that can transfer power without losses between Myanmar's north—where the larger hydropower projects will be—and the south—where thermal generation is planned. This work "will reduce power losses by tens of megawatts," said Mr. Hauber. "It's like getting a new power plant." This article first appeared in the April 2014 print issue of The Irrawaddy magazine. The post Yangon Switches On appeared first on The Irrawaddy Magazine.

In Thai Peace Talks, a Challenge to Military Dominance Posted: 16 Apr 2014 10:07 PM PDT A Thai soldier in the southern province of Narathiwat holds his weapon as people cross into Malaysia on March 8. (Photo: Reuters) PATTANI, Thailand — At a recent event to mark the first anniversary of a landmark peace dialogue in Thailand's troubled south, the mood was more uncertain than celebratory. The conflicting views of the main parties at the talks—the National Security Council (NSC), heading the Thai government's delegation, and exiled members of the Barisan Revolusi Nasional-Coordinate (BRN-C), speaking on behalf of the strongest Malay-Muslim insurgent movement in Thailand's southernmost provinces—were one obvious source of this unease. But beyond this, there were also worries rooted in the attitude of Thailand's powerful military toward such a dialogue. The words of Maj.-Gen. Nakrob Boonbuathong, a ranking member of the Internal Security Operation Command (ISOC), an influential branch of the military, went some way toward allaying these concerns. "The security community supports the peace process and for the dialogue to find a solution," he told a panel discussion held in a packed lecture room at Pattani's Prince of Songkhla University. Such words from a general known to be a hawk were not lost on analysts of the insurgency that has bloodied the provinces of Pattani, Yala and Narathiwat, home to predominantly Buddhist Thailand's largest minority, the Malay-Muslims. "It is a good sign, at least verbally," remarked one Pattani-based analyst. "The military seems to have accepted that this process will go ahead and it wants to have a role." Yet, even such analysts prefer to be guarded, given the military's dominant role in combating the BRN-C-led insurgency and the sway it enjoyed during four previous efforts at peace talks since this latest cycle of violence erupted in January 2004. The latest talks have exposed the manner in which the military has wrested control from other arms of the Thai state to determine the political agenda in this region along the Thai-Malaysian border, making the question of whether it is on board with the current peace process the focus of much fraught speculation. The turf war over who sets the agenda in the south has come increasingly out into the open since the signing of the "General Consensus on the Peace Dialogue Process" on Feb. 28, 2013, between Lt.-Gen. Paradorn Pattanatabut, head of the NSC, and Hassan Taib, an exiled political representative of the BRN-C. According to Rungrawee Chalermsripinyorat, the author of reports about the insurgency for the Brussels-based International Crisis Group from 2008-2012, "The military sent a message to the government not to sign the Feb. 28 'General Consensus' with the BRN-C. Gen. Nakrob often said that the army was being kept at a distance by Paradorn and [other allies] of the government." The extent of this tussle was exposed by a security establishment insider nearly two months after the pact for talks was signed. His timing lent weight to his words, coming as they did just before Paradorn and Taib met for the second round in Kuala Lumpur in April of last year. In an interview with a local newspaper, Thawil Pliensri, Paradorn's predecessor, decried the lack of a consensus among Thai state actors that matter—the NSC, the Foreign Ministry, the National Intelligence Agency, ISOC, the Justice Ministry and the armed forces. "All state organizations must be united and adopt the same stance before negotiations," he said. "We have seen that [the] insurgents have made demands about prosecutions and arrest warrants but Army Chief Gen. Prayuth Chan-ocha has dismissed them. This reflects disunity on our side. Such an issue rattles the confidence of negotiators." That questions over the military's willingness to sustain Prime Minister Yingluck Shinawatra's peace gambit still continue is hardly surprising. It was marginalized by Yingluck's elder brother, former Prime Minister Thaksin Shinawatra, who, despite living in self-imposed exile after his elected government was overthrown in a September 2006 military coup, continues to advise his sibling from abroad. For peace in the south, the elder Shinawatra turned to his allies within the civilian arm of the security establishment and the police to launch the peace dialogue with the BRN-C. This move challenged the military's preeminent political role in solving the ethno-nationalist conflict in the south. Two significant benchmarks emerged after Paradorn met the goatee-sporting Hassan in Malaysia, chosen to fill the role of an international facilitator. The first was that the BRN-C was elevated to the status of equality with Bangkok. That dealt a blow to a goal long held by the hawks in the military: to deny the BRN-C or other Malay-Muslim insurgent groups the status of equality with the Thai government. The latter strategy had resulted in the military dealing with the militants in "informal dialogues," often with the aim of reducing violence being a key driver. Equally significant was the Thai government's public affirmation in the February 2013 pact as to who its armed forces was locked in a battle with, and who Bangkok should negotiate with: the BRN-C, a well-armed insurgent movement that had a political agenda. This broke the wall of silence that the military had maintained to determine the nature of the conflict that, currently, has accounted for 6,000 deaths and 10,700 people injured. "The past year has offered clear evidence of the existence of a Malay-Muslim rebel movement," a Bangkok-based diplomat told The Irrawaddy. "The narrative of the conflict that the army controlled—about attacks by ninjas, drug networks, criminal groups and unknown militants—has been blown apart." Such a turn of events marks a rare institutional setback for the most powerful pillar of the Thai state. The military's influence here is not limited to protecting this Kingdom's international boundaries and being on hand when national security is threatened. It also wields power in shaping Thailand's foreign policy towards neighboring Myanmar, Laos, Cambodia and Malaysia. "Thailand lacks civilian control over its armed forces. During the Cold War, the military became the strongest political institution in Thai politics," said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Bangkok's Chulalongkorn University. "The friction between the military and elected governments is entrenched. Because democratic institutions are weak, the military in recent years has assertively retaken policy reins in key areas, particularly border conflicts and the Malay-Muslim insurgency." The post In Thai Peace Talks, a Challenge to Military Dominance appeared first on The Irrawaddy Magazine.

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