The are the results of research conducted in 2017 and 2018 in Myanmar on energy use patterns in 50 rural villages. The work was commissioned by Pact Myanmar, Smart Power Myanmar, Rockefeller Foundation, Engie and PIDG; Presentation was delivered by Tobias Engelmeier of TFE Consulting in Yangon on June 29th, 2018

1. Bridging the Energy Gap:
Demand Scenarios for Mini-Grids in Myanmar
w w w . t f e c o n s u l t i n g . c o m

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The TFE team for the analysis
Dr. Tobias Engelmeier
M a n a g in g D ir e c t o r
Dr. Sam Duby
H e a d o f A f r ic a a n d E le c t r if ic a t io n
Nabin Raj Gaihre
C o n s u lt a n t
Mohit Anand
H e a d o f C o n s u lt in g
With support from
Project initiation and funding

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Introduction
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Project Objectives
1. Generate a deeper understanding of rural demand
2. Project productive use of electricity
3. Attract ESCOs and other players
4. Advance policy dialogue and government decision-making
5. Encourage business models, interventions and investment
Project Background
• 1/3rd of Myanmar connected to grid
• 80% of rural population lacks access to grid
• Analysis focused on Myanmar’s Dry Zone

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Project Approach
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• Townships spread across Dry Zone
• Pauk, Salingyi, Mindon, Thazi
• 44 NGC villages (7 near telco)
• 6 grid-connected villages
• 1,263 HH surveyed
• Research design and village
selection provided by Pact
Myanmar

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Overall breakdown of current energy demand
(per month and per person)
• 25% of all surveyed village households
have access to higher load electricity
(e.g. for machines)
• 62% have access to light load electricity
(e.g. for lighting)
• 13% have no electricity
• Distinction between household
demand and productive demand

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Occurrence of electric household appliances
(per HH)
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• Lighting is the dominant use of
electricity in households
• 26% of household have a TV
• Very few have refrigerators

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Occurrence of machinery (per village)
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• Villages have various
businesses, both seasonal
(agricultural based) and non-
seasonal
• Water pumping machinery is
used in all villages (in some
there are as many as 10)
• Non-agricultural uses like
welding and carpentry are
absent in some villages, but
others have as many as 3-4
such machines

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Categorization of villages
(based on correlation)
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Villages with
wetlands and dry land;
good road connectivity
Villages with
wetlands and dry land;
poor road connectivity
Villages with only dry
lands; good road connectivity
Villages with only dry
lands; poor road connectivity

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Demand comparison across village types
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• Notable variation in productive
demand within village types
• A1 villages on average have 61%
higher productive demand per
capita than A2 villages
• Household demand remains
constant

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Breakdown of productive demand per village type
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• A1 villages have most varied
uses of productive demand
• Only A1 and A2 village have
carpentry (irrigation access)
• B2 villages have few and mostly
seasonal uses of productive
demand
• Non-seasonal productive
demand is at 30-35% in A1, A2
and B1 villages

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Breakdown of household demand per village type
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• A1 villages have on average
more than 57% of their demand
per capita based on the use of
TVs, refrigerators and other
modern appliances like rice
cookers and computers
• Only A1 and A2 villages have any
significant refrigerator use
• All village types, including B1
and B2 villages, have sizable TV
use

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Economic attractiveness: “Density” of energy demand
(total demand vs. population size)
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• Density is important, because
Distribution infrastructure
(cables, poles and transformers)
make up over 50% of costs of a
mini-grid
• There are significant variations
in energy demand for villages of
similar sizes

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Economic attractiveness:
Matching per capita use and population
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Economic attractiveness: Quadrant I villages have the
highest productive demand
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• Almost 4x more productive
demand in Quadrant I villages
than in others
• Probably only a small number of
machines provide most demand

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In most villages, telecom towers cannot offer an anchor load
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• Telco towers provide reliable
‘anchor loads’ to mini-grids
through continuous energy
demand (1-10kW) and by
reducing off-taker risk
• However, if tower is too far from
mini-grid, extra distribution
costs outweigh benefits
• Here, the “cut-off” point is
estimated at 1km

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Fuel-based generators currently provide the
bulk of productive loads
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• Commercial enterprises spend
96% of their electricity on
generators
• Myanmar has some of the
lowest fuel prices in the world

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The cost of generator electricity in villages is a
competitive benchmark for mini-grid electricity
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• Survey data leads to average
quoted price of MMK 510/kWh
• Unclear whether respondents
were able to reliably translate
actual electricity costs into a
cost per kWh
• Costs will vary significantly
across Myanmar, based on
factors, such as the remoteness
of location (fuel transport costs)
and type, age and condition of
generator

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Estimated cost of electricity from mini-grid vs. fuel generators
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Mini-grid electricity can come down in cost
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• A “China” factor: supply lines from China into
Myanmar are very strong, can lead to cheaper
components (batteries, panels)
• Moving from pilots to scale: deploying multiple
mini-grids at a time with a degree of process
standardization (e.g. 44 NGC villages analyzed
here)
• Use of (digital) technology: a number of
technology options, including
• earth-observation-based project
development
• remote control and maintenance
• mobile payment systems

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Scenarios of future household electricity demand
(3-5 years)
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• Grid connected villages have
24x more household demand
today than NGC villages
• Mini-grid electricity is
expected to be much more
expensive than (subsidized)
residental grid electricity
• Income effect could lead to
1.6x growth
• Price effect (with subsidy)
could lead to 24x growth

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• Projected share is based on
access to subsidized grid
electricity (Scenario 3)
• Large increases in high power
appliances like refrigerators,
irons, rice cookers and
incandescent light
• At grid-connected villages the
use of incandescent bulbs
expands the most
Household demand difference between grid and non-grid
connected villages by use type

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Scenarios of future productive electricity demand
(3-5 years)
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• Grid connected villages have
only 1.6x more productive
demand today than NGC
villages
• This is due to high cost of grid
connection for commercial
enterprises (MMK 120,000 –
270,000)
• Without subsidy for current
mini-grid cost of electricity,
productive demand in NGC
villages could rise 1.6x with
mini-grids (income effect?)

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• Welding could grow by 4x, whereas
agricultural loads either drop or
have a low growth rate
• Electricity access appears to drive a
shift to higher value-added
activities like welding
Productive demand difference between grid and non-grid
connected villages by use type

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Human Centered Design workshops were
conducted in four villages
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Card sort:
• Activity: Ask participants to sort the cards
based on what they spend most money on
• Outcomes: Insights into products and services,
preferences, ambitions, availability of
resources, day-to-day expenditures, extra
money availability
Cash flow:
• Activity: Participants explain what brings
money into and what takes money out of their
household
• Outcome: Insights into earning and spending
patterns

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Human Centered Design workshops gave us more
texture and insights (examples)
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1. An additional occupation that did not
come up in the survey, but was
mentioned frequently in the HCD
workshop was weaving (mat
production)
2. Migration is an important dynamic in
the villages in the Dry Zone (brings
money into villages)
3. Another factor which influences
adoption of electricity in productive
ways is the proximity to a village
already connected to electricity

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Village prioritization for intervention planning
(commercial vs. developmental view)
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Village prioritization for intervention planning
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Developers and investors can use this tool to assess and prioritize other villages in Myanmar beyond those
evaluated for this study. A useable, Microsoft Excel version of this tool is shared with this report

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Village prioritization (commercial view)
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Village prioritization (developmental view)
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Village ranking takeaways
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For mini-grid developers
• Priority 1 - A very high P/C ratio implies that a
few large customers will likely generate most
of the revenue for a mini-grid
• Priority 2 - Access to finance, skills training
and improved connectivity with markets could
unlock higher productive demand
• Priority 3 - In their current state, these villages
will struggle to become relevant for mini-grids
without strong intervention by development
institutions
For development institutions
• Priority 1 - Highest education levels compared to
other villages, as well as participation of women in
village economic life, the ease of getting a loan and
the diversity of occupations followed
• Priority 2 - These villages could benefit from gaining
skills training and greater awareness of options
• Priority 3 - These villages need strong attention
from development institutions to holistically raise
their socio-economic and, therefore, energy use
status. A weak economy and poor access to
electricity have left a significant negative impact on
some social indicators

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Ideas for further research
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1. Deeper analysis of the composition of local electricity
costs both for generator electricity and for mini-grid
electricity
2. Deeper analysis of actual/potential load patterns in
villages (seasonal / daily)
3. Assessments of the impact of new technologies, such
as earth observation on the mini-grid business case
4. Detailed assessment of the indirect social and
economic benefits of building mini-grids at scale in
Myanmar (and of associated industries)
5. Assessment of available financing and payment
options (from micro-loans to PAYG systems)

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The full report can be downloaded here
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www.tfeconsulting.com/bridging-the-energy-gap-demand-scenarios-
for-mini-grids-in-myanmar/

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Thank you
inquire@tfeconsulting.com
www.tfeconsulting.com
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Germany
Phone +49 89 360 52 30
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Phone +27 72 515 93 50
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