Chinese-built hydropower plants ask for hiking the cost of electricity

Chinese-built hydropower plants ask for hiking the cost of electricity supply

Published on Sunday, 27 April 2014 17:33

Yunnan Power Development, operator of Shweli (1) Hydropower Plant project, has demanded for Ks10 per unit increase in electricity purchased by Myanmar, according to sources close the Electric Power Ministry.

Another operator, Shweli (1) Hydroelectricity, has asked to hike the power supply charges from Ks30 per unit to Ks39, almost 28 per cent jump in cost.

Hydroelectricity is also selling power to China Southern Power Grid Yunnan International.

Under the contract signed by Myanmar Electric Power Enterprise, a provision stipulates that the hydropower operator is obliged to charge the same power price to Myanmar and to the Chinese power grid.

The request to raise the cost of power supply has been made after the cost of power supply for the Chinese company was increased earlier this year.

According to the ministry's sources, the per unit price hike would apply for five months a year (four months from January to April plus December).

Shweli (1) Hydropower Plant project has the production capacity of 600 megawatts, of which 15 per cent or 90 megawatts is distributed to Myanmar free of charge.

Myanmar is entitled to use 50 per cent or 300 megawatts of the total production, therefore 210 megawatts have to be purchased in addition to the free supply of 90 megawatts.

In parliament, the deputy minister for electric power said the production cost for per unit electricity was Ks 20 that far exceeds the price of Ks 39 to be sold by the Shweli project.

Moreover, Shwe Energy (Asia World) Company, permitted to run Thaukyekhet (2) Hydropower project, plans to sell per unit electricity for more than Ks 70.

Despite low production cost, power price was increased to Ks 25 per unit for home use and Ks 50 for business use in 2006. In 2012, the price jumped to Ks 35 and Ks 75 respectively.

The government increased the prices again starting from April 1. Under the new rates, households using fewer than 100 units will pay at the usual rate of Ks 35 per unit while those using between 101 and 200 units are to pay Ks 40 (US$ 0.04) and those using more than 201 units will pay Ks 50 (US$ 0.05).

Critics say that as the government increases electricity charges to the public, Chinese and local operators licensed for generating power would enjoy opportunities to further hike their charges for power supply.

Source: http://www.news.myanmaronlinecentre.com/2014/04/28/chinese-built-hydropower-plants-ask-for-hiking-the-cost-of-electricity/