Analysis of the Challenges and the Best Practices for the better Design of

EE policies in Myanmar

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Aung Thet Paing17 September 2015, Bangkok

Funded by UK Research Councils’ Energy Program, the department for International Development (DFID) and the Department for Energy and Climate

Change (DECC), and managed by the Engineering and Physical Sciences Research Council (EPSRC)

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Contents

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Introduction of Energy situation

Challenges concerning with Electricity supply

Electricity tariff

Quality of Electricity

Different Payment Methods

Cost-benefit analysis

Challenges concerning with Standards and Regulations

Mandatory MEPS

Tax exemptions

Energy Labels & Public awareness

Conclusion

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Population, GDP & Energy

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Million PopulationBillion USD (PPP2005)

Total Energy ConsumptionMyanmar Population & GDP

Source: Myanmar Energy Outlook MECON- expected 24%

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Transition in Electricity Consumption

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 -

2,000

4,000

6,000

8,000

10,000

12,000

3267.94

8253.87

Domestic / Households IndustrialBulk + Services+Commercial Others

Elec

tric

ity

Cons

umpt

ion

(GW

h)

28%

18%

39%

15%

2.52 times

Coverage ratio of electrification = 30%

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Challenges concerning with Electricity Supply

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Electricity tariff is too low

Government subsidize on electricity generation

Quality of electricity is less reliable

Damages on electric household appliances because of

Voltage fluctuations

Different payment methods in some rural areas

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Electricity Tariff for Residential

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Electricity Consumption Price per unit (kyat/kWh)

Price per unit (USD/kWh)

The first 100 kWh (1-100 kWh) 35 0.035 (3.5 Cent)

The next 100 kWh (101-200 kWh) 40 0.04 (4 Cent)

Above 200 kWh 50 0.05 (5 Cent)

Maintenance fee 500 kyat per month 0.5 (50 Cent)

Electricity tariff is very low in the region

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Range of electricity consumption and cost

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Electricity consumption Electricity cost (kyat)

Electricity cost(USD)

The first 100 kWh (1-100 kWh/month) 535-4000 0.5 - 4The next 100 kWh (101-200 kWh/month) 4040-8000 4 - 8

Units above 200 kWh/month >8000 > 8

Avg. Electricity Charges is about 3.5% of HH income

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Power Transmission Lines

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Fixed payment on each electrical appliance

Prevent interest on Energy Efficiency

Different Payment Methods

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Shan State

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Cost – Benefit Analysis

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Upfront cost of EE appliances are 2 to 5 time more than the

conventional types

After using several years, total cost (initial cost + operational

cost) of the conventional type appliances are still cheaper

than the EE appliances

Replacement for damage due to unstable electricity also

affects the cost of using EE appliances

Fixed cost for each products make choosing the low initial

cost products (or) choosing bigger is better idea

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Challenges concerning with Standards & Regulations

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Lack of mandatory MEPS (Minimum Energy Performance

Standards)

Low quality low price products can enter into the market

Lack of economical incentives for EE appliances, e.g. tax

exemptions etc. on EE appliances

Retailers have not much interest on the EE appliances

End-users only interest on upfront cost

Lack of regulations for EE appliances market

No restriction on the product quality

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Awareness & Energy Labeling

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Awareness

Lack of public awareness on Energy efficiency that can

save household expenditures

Energy Labels

Myanmar do not have own energy labels

Products with energy labels are available in the market

Lack of awareness on energy labels

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Primary student knows Thailand Energy label 5 via Thai TV ad

Graduate, Electrical appliance retailer do not know EE labels

Awareness case

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Mon & Kayin State

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Policy considerations on Residential

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Challenges Policy considerationsElectricity Supply Stable electricity supply should be provided

Electricity price should not be subsidized Payment methods should be gradually changed to become uniform Have to consider alternative short term programs for lighting and

cooking in rural areas (off-grid areas)

Standards and Regulations

Minimum Energy Performance Standards (MEPS) for appliances should be introduced

Regulations are issued according to the MEPS to control the quality of the products

Trade incentives on EE products should be made, E.g. tax exemptions Improvement is needed in financial mechanism & schemes

Awareness Awareness programs are promoted through public media such as newspapers, TV, radios etc.

Trainings, workshops, EE exhibitions should be done regularly Create Energy awards

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Energy saving potentials and targets

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Sector 2020 2030Residential 5% 8%EE policy Targets

Source: Ministry of Industry

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Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

Conclusion

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

A new middle class population living above the poverty line is

emerging, mostly in Asia

Responsible for large share of increase energy demand

Energy expenditures is an important for household budget

Still having barriers to improve EE in low-income households

Government policies and cooperation between public and

private sector are definitely need to overcome the barriers

Effective energy efficiency policy implementation targeting “New Modern Energy CONsumers” in the Greater Mekong Subregion

THANK YOU