YANGON – Darkness is descending on Myanmar, figuratively and literally.
As the military regime widens a killing spree that has taken over 700 lives since its February 1 coup, the besieged nation’s already creaky power infrastructure is at rising risk of blacking out.
The anti-junta Civil Disobedience Movement (CDM) has called on public sector employees, including at the Ministry of Electricity and Energy (MOEE), to down tools in protest against the coup, a rally cry that has seized up much of the bureaucracy.
The Committee Representing Pyidaungsu Hluttaw (CRPH), an emerging parallel government comprised of military-ousted National League for Democracy (NLD) lawmakers, on March 18 said it exempted households from paying monthly electricity bills and paused the collection of fees for non-household usage, an audacious bid to hit the junta in the coffers.
Those rebel yells are resonating. Local media reports estimate that anywhere between 50-75% of the ministry’s workers are on strike, including nearly all junior-level staff at the nation’s two main power dispatch centers in Yangon and the capital Naypyidaw.
Unexplained nationwide blackouts on March 5 and March 31 appeared to show the CDM and CRPH’s campaign is hitting the junta’s ability to control and maintain the power grid, though electricity shortages are certainly not new to Myanmar.
“The power system is bound to suffer from further disruptions in the near future. A lot of MOEE staff support the CDM,” said a former advisor to the ministry who requested anonymity. “But the ministry is now moving to fire CDM employees. This could affect the ministry’s ability to operate the grid.”
At the same time, the junta’s lethal violence against protesters, including a massacre of at least 80 at Bago last week, is giving investors involved in current or considering new energy-related projects pause due to the associated reputation risks, Yangon-based executives say.
The combination of bureaucratic gridlock, consumer revolt and investor reluctance has analysts speculating if and when the national power grid could go dark.
“Disruption to the grid can either come from shortages in fuel for generators or mismanagement of the grid system,” said an economist at the London School of Economics who has worked extensively on Myanmar’s power sector since 2015.
“While Myanmar’s grid has improved in recent years, I suspect the ability for the government to effectively manage the grid to ensure stable supply will deteriorate as the CDM continues,” he told Asia Times.
The elected civilian government toppled by the coup and rights groups are pressuring French energy giant Total to review its Myanmar-based operations as criticism mounts its tax and other payments are financially propping the junta.
Total, which operates the Yadanar gas field, said in a statement that it would continue operating in the area as long as the situation is safe for its employees.
Any disruption to the field’s operations, analysts say, would hit a major source of power for the country. Protesters have already targeted other military-affiliated businesses and installations.
In 2020, Myanmar’s power was derived 60.3% from hydropower, 35.6% from natural gas and 4.1% from solar, coal and diesel, according to government data. Many of those hydropower dams are in ethnic territories where support for the CDM and resistance to the military is strong.
“[A] power blackout would be the latest nail in the coffin for the Myanmar economy, particularly for the manufacturing and garment industries,” said a corporate executive in Yangon who requested anonymity. “It would also further prove that the junta is not running the show.”
The ousted Aung San Suu Kyi-led government was working to bridge the nation’s chronic power gap, a legacy of decades of military misrule. In 2019, the World Bank expected Myanmar’s power demand to increase by 15% every year.
It estimated that Myanmar would need to spend $2 billion annually to construct new plants and repair existing ones to meet future demand over the next decade. The pandemic has diminished power demand but analysts still expect power shortages, particularly in the coming hot season.
Suu Kyi’s government was working to bring more power online, including through a 2019 call for emergency tenders for five electricity generation projects that aimed to add 1,040 megawatts (MW) of new capacity by mid-2020.
The tenders were all won by Chinese firms, with four out of the five projects being won by a consortium led by Hong Kong-listed Vpower, which has links to China state-owned enterprise CITIC. The last project was awarded to a consortium led by China Energy Engineering Group.
Myanmar’s state-run Electric Power Generation Enterprise called for the nation’s largest ever competitive tender for renewable energy via a 1,060 MW solar tender last year. Chinese companies dominated the tender winning all but one of the 30 bids.
A raft of Chinese solar energy projects tendered under the NLD administration was scheduled to go into operation last month.
The fate of all these power projects now hangs in the balance of the coup. China has come under heavy fire from protesters for blocking any UN action against the regime.
Several Chinese-owned factories in Yangon have been torched in apparent response to Beijing’s perceived close ties to the junta. Some now wonder if China’s interests in the energy sector could be targeted next.
Either way, the former MOEE advisor sees a dark medium-term future for the energy sector. First, he says power generation projects in the previous government’s pipeline are now at a “standstill”, including those managed by China’s VPower.
“Most importantly, the power sector is very cash flow-sensitive. And right now the MOEE is starved for revenues… The people don’t plan to pay their bills,” said the former ministerial advisor. “This is going to create a huge revenue shortfall for the MOEE, in the hundreds of millions, potentially billions of dollars.”
“A loss of that size would have macroeconomic consequences, threaten the solvability of the Myanmar state,” he added. “It raises the possibility of Myanmar not being able to honor its power purchase agreements with generation companies.”