By David Boyle
Phnom Penh, June 19, 2018
The Laos government has announced plans for a fourth major dam on the Mekong mainstream just months after the feasibility of another of its hydroelectric projects was thrown into question by a delayed power deal.
Laos notified the Mekong River Commission (MRC) last week of its intention to build a 770 megawatt dam at Pak Lay in Xayaburi province, where it has already constructed another highly controversial mainstream dam.
The notification follows Thailand’s decision in February to delay signing a power purchase agreement for Laos’ 912 megawatt Pak Beng. Bangkok is said to be reconsidering its energy strategy in light of a reported electricity surplus.
Maureen Harris, Southeast Asia director at International Rivers, an environmental watchdog group, said the government’s notification on the Pak Lay dam is unusual.
“Firstly, the construction on the project in scheduled to start in 2022, which is over three years away. So that’s initiating the process significantly sooner than has been the case for the other projects that have gone through the procedure to date,” Harris said.
“There’s also no developer or power purchaser who has been identified in the notification,” she added.
Harris suspects there could be some concerns in Laos over the environmental impact of the dams.
At a major summit in Cambodia in April, MRC representatives presented the findings of a landmark $4.7 million, scientific assessment of planned developments on a river crucial to fish stocks and food supplies across Southeast Asia.
That study found that if current development plans went ahead, 39 to 40 percent of the entire fish biomass — about $4.3 billion worth — would be wiped out by 2040 in the Lower Mekong Basin, where about 200 million people rely on the river.
Harris suggested the notification looked like a purposeful distraction from unresolved questions over Laos’ existing dams, how to apply the MRC Council Study’s findings and proposed reforms to the prior notification process itself.
The MRC secretariat wrote in an emailed response to VOA that the fact that Laos had engaged in notification and consultation on all its mainstream projects demonstrates it has not disregarded such concerns.
“One shall recognize Laos’ constructive intent in submission of the project to the prior consultation instead of taking it as inflaming tensions, witnessing a case in the modern time when one state threatens to bomb a dam being built in the upstream area,” the secretariat wrote, invoking a hypothetical situation.
“The submission is to prevent barbarian conflicts that the [sic] mankind experienced in its past,” it wrote.
Te Navuth, secretary general of the Cambodia National Mekong Committee, echoed those sentiments, saying that though all of Laos’ mainstream dams raised serious issues, those concerns are being handled through the established MRC mechanisms.
“The first one was a serious case already. So our concern is a concern overall on fish migrations, on sediment, blocking flow, river regime changing, these more common concerns.
“We could not say yes or no to the projects directly, so we have to talk to each other first using the findings from the council study, from any other sources that we have,” he said.
Nuanlaor Wongpinitwarodom, director of Thailand’s Mekong Management Bureau, said she could not comment until she had seen the Laos government submission while representatives of Vietnam’s National Mekong Committee did not respond to VOA inquires.
The four member countries of the MRC — Cambodia, Thailand, Vietnam and Laos — will now have six months to review the Laos government proposal for Pak Lay and urge strategies to mitigate its impacts but have no authority to stop it being constructed.
Conservationists and renewable energy proponents at the April MRC summit heralded the Pak Beng power purchase delay as a “tipping point” in the transition from hydropower to renewables such as solar and wind.
It came after a January report from the International Renewable Energy Agency found the so-called “levelized” price of solar generated electricity had plummeted by 73 percent from 2010 to 2017, predicting the cost would halve again by 2020 to become cheaper than hydropower competitors.
Pak Lay would not come online until 2029, and the projected cost of the dam is thus far not known.
Han Phoumin, a senior energy economist at the Economic Research Institute for ASEAN and East Asia in Jakarta, said for now, hydro remains a more cost-competitive option, especially given its capacity to provide baseload power and comparative ease of integration into existing infrastructure.
“But if the timeline’s until 2029, I think the development of storage for solar and wind could be viable. In that case, I think it will provide a very important role as baseload power. In that case, I think they could, to some point, beat the hydro,” Phoumin said.
Selling the power generated by Pak Lay would not be a problem, he said, given that energy demand in the region is expected to increase over that time frame by about two to three times while ASEAN grid interconnectivity will continually expand to available markets.
Securing upfront investment first though might be another story.
“The investor must have very strong backup already, perhaps we need to explore because the project cannot go ahead without a strong kind of PPA (power purchasing agreement) or off-taker agreement,” he said.