Background

2 BACKGROUND

Since the publication of Myanmar’s Electricity Vision in 2016, the global cost of solar has decreased faster than expected. The development outlook for Myanmar has also changed and requires updating. The modelling work covered in this report is intended to promote a high level of solar and other sustainable renewable energy sources to highlight ambitious, but possible, cost-effective solutions to meet the growing electricity needs of Myanmar towards an affordable renewable energy future.

2.1 MYANMAR NATIONALLY DETERMINED CONTRIBUTIONS

Myanmar in 2020 prepared its draft Nationally Determined Contributions (NDC) report which sets out greenhouse gas mitigation targets for the country based on conditional and unconditional targets relative to a baseline. The conditional target is based on obtaining more international support for implementation by way of finance, technology and capacity building. The unconditional target is based on leveraging only domestic resources and limited national capacities of Myanmar.

z A summary of the NDC background and baseline and conditional and unconditional targets are summarized below. Although the coverage of the NDC is economy-wide, the focus here is on the electricity sector: z Myanmar is rich in natural resources with a population of 55 million people; it is also one of the world’s most vulnerable countries to climate change; z Myanmar has a relatively low greenhouse gas emissions level of 0.61 tons of CO2e/person; z Myanmar’s baseline emissions target for the electricity generation sector is 297 million tons CO2e for the baseline and 192 and 153 million t-CO2e over the period from 2021 to 2030 for the conditional and unconditional targets respectively; z To achieve its emissions reduction goals in the energy sector, the total share of renewable energy (solar and wind) needs to increase from 2,000MW to 3,070MW by 2030, and the share of coal needs to decrease from 7,940MW to 2,120MW by 2030; z Under the national programme for rural electrification, mini-grid development and additional renewable energy will increase access to 2.7 million and 3.6 million people in the unconditional and conditional scenarios respectively, significantly higher than the 1.8 million under the baseline scenario; z Myanmar also recognizes the importance of promoting energy efficiency and has set 2030 targets of 7.8% for the residential sector, 6.63% for the industrial sector, 4% for the commercial sector and 1.36% for all other sectors; z Myanmar plans to phase out coal by 2050 and not increase its capacity after 2030.

2.2 ELECTRICITY VISION SCENARIOS

The updated report explores several scenarios up to a 100% renewable energy roadmap for Myanmar using minimal hydropower. The scenarios modelled as part of this work include a base scenario (Base), Increased Renewable Scenario (IRS) and Advanced Renewable Scenario (ARS). IRS and ARS are more ambitious than the unconditional and conditional 2030 NDC targets and are intended to show that high RE outlooks can be just as feasible and cost-effective. A summary of the scenario components modelled is provided in Table 2 below.

z Base scenario: „ Based on current NDC (December 2020 draft) baseline, period to 2050 is extrapolated from the NDC 2030 targets. „ Propose for no more coal developments after 2030, with any Internal Combustion Engines (ICE) and Combined Cycle Gas Turbines (CCGT) older than 30 years lifetime on domestic gas to be replaced by LNG over time.

z Increased Renewable Scenario: „ Increased development of Myanmar’s RE potential. „ Restrained development of hydro (to what is committed).

z Advanced Renewable Scenario: „ Takes a more ambitious view on RE adoption with a 100% generation target by 2050. „ Considers new emerging technologies (and includes demand side initiatives).

Table 2. Scenario Summary

Base (traditional mix) Increased Renewable Scenario Advanced Renewable Scenario

Description Represents the baseline outlook for Myanmar, reflecting current energy planning policy consistent with the NDC baseline scenario. Outlook based on traditional generation mix comprising of thermal, coal and gas.

Coal

MOEE stated policy (as per NDC) for no more coal from 2030. Coal plants retired once they reach 25 years. Gas – Domestic Old CCGTs on domestic gas are refurbished and run on LNG once they reach 30 years of life from commissioning dates. Any ICEs on domestic gas are converted to run on LNG over time (as required). Onshore gas networks have LNG fed into them.

Gas – LNG As per government plans for next 1-3 years. Expanded as needed (given coal & hydro developments). Represents a transition from present traditional energy mix towards a mix that has undergone a significant transition towards RE. The scenario minimizes hydro development, ceases coal development beyond committed projects and maximises Myanmar’s VRE potential. Gas is developed with its use kept minimal and just to what is necessary to complement the operation of hydro and VRE projects. Hydrogen is introduced as a new technology from 2040. Purpose is to provide a transition to 100% RE by the year 2050 through wider use of hydrogen technology, demand side management / smart grid / energy efficiency measures.

This scenario will seek to have fully transformed Myanmar’s energy sector towards 100% RE (glide path) and can provide the basis for a 30-year plan for implementing the transition in a rapid manner.

No new coal beyond what we understand to be committed (there are no committed coal plants, so this results in no coal).

As per Base

As per government plans for next 1-3 years. Expanded as needed up to 2035 only.

Hydro plants Expanded as per government plans. Only committed hydros. Expansions of existing large hydros are allowed (assumed up to 20% increase in storage).

Solar

Expanded at a slow rate based on solar zone potential. Expanded at a faster rate than Base and capped on generation share based on demand. Allowed to be built as required

Wind

Not developed

VRE in general (Solar + Wind)

Rate of development capped to 15% generation share by 2050.

New Technologies – Supply Side

Not considered CSP, geothermal, hydrogen, ocean, etc. assumed to be available from 2040. Hydrogen generation used as a representative low-emissions baseload emerging technology. CSP, geothermal, hydrogen, ocean, etc. available from 2030 (and should enter given tighter constraints on further gas and coal development). Hydrogen generation used as a representative lowemissions baseload emerging technology.

Developed, subject to zonal capacity limits and capped based on demand. Within a zone, all renewables including solar + wind capped to 0.8 of peak demand. BESS contributes to dispatchable capacity.

New Technologies – Demand Side

Imports

Take MOEE demand forecasts which we assume have NDC energy efficiency embedded (20% by 2030). Electric vehicle electricity demand not included. No imports to reflect NDC Base Additional energy efficiency of 10% by 2040. Assumes 25% of all vehicles are EV by 2050.

Include the 1400 MW imports from neighbouring countries As per IRS

Old CCGTs are replaced with ICEs, if required, that act as a source of flexible generation and/or backup generation once the CCGTs reach end of useful life.

As per government plan for next 1-3 years but to reduce gas to zero by 2050. This will be substituted with RE and new technologies instead. Only committed hydros. Expansions of existing large hydros are allowed (assumed up to 20% increase in storage).

Allowed to be built as required

Within a zone, all renewables including solar + wind capped to 0.9 of peak demand. BESS contributes to dispatchable capacity.

Additional energy efficiency of 20% by 2040, policies enacted to enable daily load shifting. Assumes 35% of all vehicles are EV by 2050.

As per IRS

Off Grid

Follow the National Electrification Strategy for grid connection which includes smaller amount of off-grid demand in the Base. Energy Access programmes provide offgrid access as per Smart Power Myanmar report. Lower grid electrification than in IRS but increased off-grid access to maintain the same level of overall electricity access as the other cases