Moratorium on new Mekong dams in Laos provides window of opportunity

Lower Mekong Dams 2018. Map credit: Allison Carr/Brian Eyler

The July 23 dam collapse in southern Laos marks a turning point that squarely exposed the vulnerabilities of Laos’s current plans to become the “Battery of Southeast Asia” to the Lao government’s upper leadership. At least 34 people died in floods unleashed by the man-made disaster at the XePien-XeNamnoy dam in Attapeu province, and more than a hundred local villagers are still missing. Waters from dam breach rushed in the Sekong river and sent floods downstream to Cambodia where thousands were evacuated. The flooding reportedly also caused damage to agricultural fields in Vietnam’s Mekong Delta.

The loss of life, economic damage, and transboundary implications of this tragedy hit too close to home for senior Lao officials. On August 7, the Government of Laos announced a decision to suspend the consideration of new investments in hydropower projects in order to review its hydropower development strategy and plans. The decision came after a cabinet meeting chaired by Lao Prime Minister Thongloun Sisoulith. The prime minister also set up a task force to inspect all completed dams and dams under construction in Laos for engineering flaws. If inspections are to be thorough, this process should take longer than one year given the need to inspect all 100 dams that Laos’s Ministry of Energy and Mines claims will be up and running by 2020.

Lao government ministries connected to the inspection process are woefully understaffed and lack experience lending to constraints that spell out a lengthy period of inspection. To conduct a more impactful assessment, the Lao government should employ the expertise of international development partners with particular experience in building resilience for climate change impacts and severe weather events like the tropical storm that triggered the dam breach in southern Laos. The list of potential candidates is long and includes Australia, Germany, Japan, and the US, whose Army Corps of Engineers and USAID projects in Laos have long assisted with dam safety capacity building.

The moratorium on new dams creates a window of opportunity for international development partners and investors to promote smart planning and non-hydropower renewables such as solar, wind, and biomass. Neighboring Thailand and Laos also have a direct interest in reducing the risks to Lao dams upstream by contributing to development assistance and investments in non-hydropower renewables. Laos has an abundance in these alternative energy sources that to date mostly untapped due to the longstanding preferenc, for building dams.

Recent media reports have stated that Laos plans to complete more than 100 dams by 2020 which will produce 28,000 mega-watts (MW) of electricity, most of which will be exported to neighbors like Thailand, Vietnam, and Cambodia. According to my review of Lao language databases posted on the website of Laos’s Ministry and Energy and Mines, Laos has completed less than 6,000 MW hydropower projects. Even without the pause, less than 10,000 MW of dams were scheduled for completion by 2020. With political, financial, and environmental risks on the rise, it is doubtful that Laos will reach 18,000 MW of hydropower, a previous target set several years ago by the Lao government.

Solar (left) and wind (right) endowments for Laos, Cambodia, and Vietnam.

Laos has potential for 8,800 GW of solar development, and 2,200 GW of high quality wind development. Much of this potential is located in Sekong river sub-basin which flows through the southern provinces of Champasak, Sekong, Attapeu, and Salavan. The Sekong, which originates in Vietnam and flows 520 kilometers through southern Laos and northwest Cambodia, is the longest remaining free-flowing tributary of the Mekong river. The Sekong’s tributaries, in aggregate, total to 1390 kilometers.  More than sixty dams are in listed in Laos’s current dam inventory (four are completed) for the Sekong sub-basin, although more than forty are still under feasibility study. Minimizing the number of the dams in the Sekong basin is critical for the promotion of important environmental flows, such as sediment and migratory fish to the Mekong floodplain. Dams in the Sekong basin like the failed XePian-XeNamnoy dam are also close to Cambodia and Vietnam and pose relatively higher risks to downstream countries than dams located farther upstream on the Mekong. These risks were clearly demonstrated by the cross-border flooding caused by the July 23 disaster.

The aforementioned southern Lao provinces in the Sekong sub-basin could serve as a zone for diversified renewable energy development purposed to reduce the environmental and social risks of dams all the while keeping Laos on track to becoming a better “Battery of Southeast Asia”. These provinces are advantageously positioned to export power to southern Vietnam and Cambodia where power is needed most.

To be sure, some research has already been done on the potential for diversified energy production in the Sekong basin. For instance, the Natural Heritage Institute, a San Francisco based research group, produced a Master Plan for the Sekong Basin which proposes alternate sites for some dams based on minimized environmental impacts and substitutes other dams with solar and wind projects. Some of NHI’s solar plans are built on top of dam reservoirs. This floating solar technology is currently being piloted in China, India, Thailand, and Indonesia and assists with both the day-to-day and seasonal intermittency of solar and hydropower generation. NHI found such an approach would be cheaper and quicker to deploy than the business as usual scenario and would achieve a minimized level of environmental impacts.

Moving from analytical studies to actual projects, Convalt Energy, a US based renewable energy company from New York, is collaborating with Viet-Lao Power Joint Stock Company to build up to 1,000 MW of floating solar built on Viet-Lao Power’s dams in southern Laos. Further, Impact Energy Asia, an affiliate of Thai owned Impact Electrons Siam, signed a project development agreement for a 600 MW windfarm (the largest in Asia) to be located in Sekong and Attapeu province. To date, this project has been stalled because of the lack of an interested power purchaser.

Clearly investors are interested in participating in a smarter and more diversified plan for energy development in southern Laos. Now that the government of Laos is rethinking its power sector strategy, system-scale planning could be applied to produce a blueprint for energy development in southern Laos that demonstrates the costs, timeline, benefits, and impacts of a development plan. A better process would produce various scenarios of development options so that decision makers could better negotiate the environmental, social, and economic tradeoffs. A successful pilot project in southern Laos could then inform development processes for other parts of Laos and the Mekong region at large.

The governments of Australia, Japan, Germany, US, and the EU as well as the World Bank and Asian Development Bank are already uniquely positioned to assist with this transition by expanding existing support to Laos’s power sector development. Of course, a leaner and less risky “Battery of Asia” can be built by showing Laos the benefits of alternative economic development pathways unrelated to the power sector such as those related to eco-tourism or light manufacturing. Once approaches are identified, regional development frameworks such as the US-led Lower Mekong Initiative, Thailand’s ACMECS, the Japan Mekong Connectivity Initiative, or the ADB’s Greater Mekong Subregion program.

Specifically, the United States now has an opportunity to target efforts emerging from its now-materializing Free and Open Indo-Pacific Strategy toward the power sector in Laos as a form of strategic and pragmatic engagement and delivers broader benefits to the entirety of the Mekong region. Importantly, this kind of strategic investment, if packaged correctly, could provide a high-quality alternative to China’s Belt and Road Initiative, the projects of which have placed Laos, to its detriment, as one of the highest debt risk countries in the world.

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