SOLAR ENERGY TO EXPAND ELECTRICITY ACCESS: successes and failures

INTRODUCTION

Myanmar’s government, in coordination with international agencies (WB, ADB, JICA, UNDP), should approve Myanmar’s “National Electrification Plan” (NEP) that aims to electrify 100% of Myanmar’s households by 2030. Where possible, grid extension remains the preferred option to scale-up electricity access. But with 65% of the population living in rural areas, off-grid options cannot be ignored.

Solar energy projects have been implemented in developing countries for the last 25 years. More recently, it has been widespread not only because of rising climate change awareness and interest in sustainable development but because solar power energy has undeniable assets. The source of energy is free, endless and available almost everywhere. Furthermore, solar technology is a proven, cost effective method for decentralized rural areas. Myanmar’s potential for solar energy reached a large consensus amongst main stakeholders but currently solar energy represents only 116 kW1 of the national supply.

Off-Grid solar energy options are divided between standalone systems and mini-grid systems. Standalone systems can supply basic electricity needs such as lighting or communications (radio, mobile phone) using solar lanterns or solar home systems (SHS). Even if the supply of electricity is limited, these devices are playing a major role to bring electricity to rural areas. A solar thermal system that is used to produce hot water for example could also be considered as a standalone system. Mini-grid systems are designed to generate electricity for a village and could be connected to the national grid. Hybrid systems (solar panels with diesel as backup) are becoming a favored solution amongst development planners because they increase electricity reliability and power supply.

 The purpose of this paper is to consider the best way to develop solar energy in Myanmar, through the analysis of examples from other developing countries. Even though certain lessons should be adapted from other programs from around the world, it is critical to acknowledge that Myanmar’s context is unique and successful models from elsewhere may not always be replicated.

While successful case studies show that long-term solutions exist and raise hopes for the future, failed attempts help to have a better understanding of issues that might be specific to Myanmar. Ultimately, the main criteria by which projects are evaluated must be grounded in a framework aimed at sustainability.

I – Standalone systems

  • Stories of success

Bangladesh IDCOL program2

The Bangladesh IDCOL (Infrastructure Development Company Limited) program is a well-known success story of promoting electricity access to rural areas. IDCOL is an independently run and government funded financial institution that plays a key role in bridging the gap between end-users and financial institutions.

The program started in 2003 and 3 million SHS have been installed in rural areas reaching up to 13 million people. Now, more than 65,000 SHS are being installed every month in order to reach the goal of electricity for all in 2021.

The government of Bangladesh created a revolving fund that finances IDCOL at a 3% interest rate. IDCOL lends to private companies or NGOs at a 6-8% rate depending on the project. Private companies or NGOs sell and install SHS for individual households. Households have a 15% down payment and a payable loan for 3 years with a 12% interest rate. IDCOL not only finances private companies but also provides technical expertise to assess the implementation of panels, approves panel suppliers judged by technical standards and trains community members in maintenance activities.

Cited from Nazmul Haque’s presentation, Director&Head of Avisory IDCOL – December 2013

A primary reason for the success of the initiative has been the government’s continued backing of renewable energy in electrification plans along with the installation of proper regulations and policies. Additionally, the public-private partnership model has allowed the program to scale-up quickly since its introduction.

 Laos PDR SHS program2

Since 2001, Laos PDR’s off-grid program has delivered 19,000 SHS to households. The Off-Grid Promotion Support (OGS), an entity established by the Department of Electricity, provides licenses to private companies that are in charge of identifying villages and employing village energy managers. The locally based managers are then in charge in installing the solar panels and doing the maintenance. Households can take out a 10-year loan of 1-2USD payments monthly. End-users’ repayments are directed into a revolving fund that is used to pay the costs of the installation, management and payment collection.

  • Failed attempts

Philippines

It is difficult to find reports from development agencies that evaluate the sustainability of projects years after their implementation. Jens Marquardt from the Environmental Policy Research Centre at the Free University of Berlin in German published a study in the Journal of International Development (June 2014) that raises the following question: how sustainable are donor-driven solar power projects in remote areas? 

He analyzed four projects that ended between 1990 and 2013 in the Philippines and were funded by Ausaid, UNDP, USAID and GTZ (German Agency for Technical Cooperation). Three out of the four projects failed mainly because of a lack of adequate maintenance and lack of funds to change the batteries. An additional problem underlined by the study is the lack of communications between the agencies. Indeed, similar panel designs were used across the four projects and resulted in complications that could have been better addressed through shared information and collaboration.

Nigeria

One example of a failed attempt to deliver electricity from solar panels was reported by National Geographic in an 2011 article. In order to bring electricity to the remote village of Bishop Kodji the Lagos state government decided to launch a solar electrification project that would electrify a community building, a school, a church, a mosque and a water pump. State workers installed 300Wp solar panels. Jealousy rose amongst other communities that didn’t have access to these panels and they destroyed them shortly after. After reparations, the solar panels failed again for an unknown reason and state workers never returned. From their point of view, the problems were due to poor maintenance by trained villagers

Lessons for Myanmar

Regarding these examples, certain lessons learned overlap with the last Green-lotus seminar on solar energy.

 First, Myo Mintt from ADB stressed the need to create an independent entity that will support renewable energy expansion. While the Department of Rural Development will remain largely in charge of electrification projects, it would be to the people’s benefit to have management passed to a more autonomous unit. As emphasized in the International Off-Grid Renewable Energy Conference report, “Our recommendation is that policy regulation is good, but give it to independent agents like IDCOL. Give them the money, give them the framework, let them engage in the dialogue with the private sector and make it happen 3.

Secondly, REAM emphasized the role of community involvement through the setup of Village Electrification Committees. Villagers need to be trained to supervise the maintenance of the system and change devices such as batteries. Even where private companies manage operational maintenance, there needs to be a clear line of trust and understanding between the villagers and company employees. Attention needs to be given to the continuity of services provided, and not only the sale of solar panels.

Additionally, Evan Scandling from Sunlabob presented the need for high-quality products. Solar energy projects should aim to provide a minimum of 20 to 25 years of effective electric supply. With national technical standards put in place, private companies can be held accountable for ensuring quality products. This point was reaffirmed by REAM, having witnessed poor quality of solar panels being sold in local markets.

Main ways to improve sustainability and efficiency of household-level programs:
The program must be backed by predictable sources of financing and funding
The program must generate revenues that would contribute to on-going costs and be financially sustainable
The program must be designed to ensure that once installed, the systems continue to provide quality service
The program must be well targeted to areas where SHS based solutions are the most economic electrification option

Cited from the Myanmar NEP report2

II. Mini-grid systems

  1. Stories of success

Mali mini-grid program2

               The Mali mini-grid program implemented by AMADER (Agence Malienne pour le Développment de l’Energie Domestique et de l’Electrification Rurale) has been able to raise the mini-grid electric supply from 1% in 2006 to 12.5% in 2011. AMADER is under the responsibility of the Ministry of Energy and Water. Their budget comes from both national and international funds. After having chosen a priority area for electrification, AMADER offers a subsidy (an average of 750USD per connection) to private companies who propose the best offer (lower tariffs, number of connections, lowest subsidy per connection).

REFERENCES
  1. UNDP Myanmar  – Accelerating energy access for all in Myanmar – 2013
  2. Castalia strategic advisors – Myanmar National Electrification Plan Final report – Sept. 2014
  3. IRENA – Accelerating off-grid renewable energy, key findings and recommendations – 2014