Southeast Asia announces ambitious plans-
The Southeast Asian (SEA) countries are increasingly focusing on expanding their energy base by channelising the immense hydropower potential of the mighty Mekong River. The 4,909 km long river flows through six countries – China, Myanmar, Thailand, Lao People’s Democratic Republic (Lao PDR), Cambodia and Vietnam.The hydroelectric power potential in the Greater Mekong Region is estimated to be between 175 GW and 250 GW. About 71 hydroelectric dams are proposed to be completed in the SEA countries by 2030, centred around the Mekong and its tributaries. Besides, other rivers including Ma (Vietnam), Bongka (Indonesia) and Salween (Myanmar) provide additional hydropower opportunities. As per the International Energy Outlook 2016, the SEA countries are together planning to construct about 78 GW of hydropower capacity by 2020.
While hydropower development is the key to economic growth for countries like Lao PDR that can export power, it will help reduce dependence on fossil fuels in the case of self-sufficient countries like Malaysia and Thailand. Besides, many countries like Laos, Malaysia and Thailand have forged power trade agreements based on upcoming hydropower capacity leading to greater regional cooperation and resource sharing among the SEA countries. Southeast Asia Infrastructure presents an overview of hydropower development in the SEA countries…
Lao PDR
Lao PDR has a significant part of the Mekong river basin and its tributaries, which make it suitable for hydropower development. The country has technical potential of 18 GW, of which nearly one-fourth has been exploited so far (2015). Laos is rapidly exploring new hydropower sites and setting up hydroelectric projects (HEPs) primarily to export power to Thailand, Vietnam, Cambodia and more recently Malaysia. In September 2016, Laos, Malaysia and Thailand signed an agreement for multilateral trade in electric power by 2018, with Singapore being added to the deal at a later stage. It is estimated that Laos exports two-thirds of its hydropower, using the earnings to develop its economy.
Laos’ installed hydropower capacity stood at 4,186 MW in 2015, an increase of about 17 per cent over the capacity in 2014. As per its intended nationally determined contribution submitted to the United Nations Framework Convention on Climate Change, Laos plans to build large-scale (>15 MW) hydropower plants to provide clean electricity to neighbouring countries. The country is targeting an additional capacity of 5,500 MW by 2020 and over 20,000 MW after 2020.
Of the several large HEPs which are under construction in Lao PDR, the 1,285 MW Xayabury HEP is the largest, entailing an investment of THB 115 billion. The project, being developed by Xayaburi Power Company Limited, is slated to be commissioned by 2019. The project’s construction began in 2012 and it is 70 per cent complete. About 95 per cent of power from the HEP will be exported to Thailand, which is also funding the project, while the rest will be for domestic consumption.
Another key project is the 1,156 MWNam Ou seven-dam cascade project with annual generating capacity of about 5,000 GWh, being developed by China-based Sinohydro in association with the state-owned Électricité du Laos. The project is being developed in a phased manner and capacity aggregating 540 MW has been completed while the remaining capacity will be commissioned by 2020.
Another key under-construction project is the Xe-PianXe-Namnoy Power Company’s (PNPC) $1.02 billion 410 MW Xe-PianXe-Namnoy HEP. The HEP’s construction began in February 2013 and commercial operations are expected to begin in 2019.
Other key large hydro projects under development in Lao PDR include the 290 MW Nam Ngiep 1, which is being funded by the Asian Development Bank and is expected to be commissioned by 2019, and the 260 MW Don Sahong HEP.
Vietnam
Vietnam’s hydroelectricity consumption has increased significantly in a decade – from just about 3.7 million tonnes of oil equivalent (mtoe) in 2005 to 14.4 mtoe in 2015 – recording a compound annual growth rate of 15 per cent. Hydropower accounts for over one-fourth of its primary energy consumption.The total hydro potential in the country is estimated at over 35 GW with an exploitable potential of up to 20 GW. As of 2013, the Vietnamese government reported that about 268 hydropower projects were operational with a total installed capacity of 14.3 GW. Recently, in 2016, the 1,200 Lai Chau HEP with an annual electricity generation of 4.7 BUs was commissioned, almost a year ahead of schedule.
Vietnam is focusing on rapidly expanding its electricity generation infrastructure including HEPs. According to Vietnam’s Power Development Plan, hydroelectric generation is expected to increase from 17 GW to 27.8 GW by 2030. As per the IEA, Vietnam has the most ambitious hydroelectric development plan in Southeast Asia, with plans to increase total hydroelectric capacity to 21.6 GW in 2020. One of the key projects under implementation is the 260 MW Trung Son hydropower plant located on the Ma river in northern Vietnam, coming up at an investment of $412 million. Trung Son HEP is the first large-scale generation project of Vietnam Electricity to be financed by the World Bank,which is providing a loan of $30 million. The construction of the HEP’s main dam was almost complete as of December 2016 and the project is scheduled to be commissioned in 2017.
Other projects in the pipeline include the 220 MW Thuong Kon Tum HEP, 120 MW Bau Lam, 220 MW Thuong Kon Tum and 102 MW Hoi Xua. In addition, large pumped storage plants (PSPs) of capacity 1,200 MW each are planned at Dong Duong, East Phu Yen and Ninh Son between 2020 and 2030.
Indonesia
Indonesia’s installed hydropower capacity stood 5,258 MW (2015) or about 7 per cent of its total potential of 75 GW. The country has significant untapped hydro potential in Sumatra, Java and Sulawesi islands. As per the IEA, Indonesia’s goal is to develop 3,000 MW of new hydroelectric generating capacity in the coming years. In 2016, the Indonesian government announced plans to build hydroelectric plants at 239 dams owned by the Public Works Ministry and rent them out to power generators in a bid to reduce investment costs.
Seven HEPs aggregating 1,559 MW were reportedly under construction, 10 projects totalling 1,819 MW were under power purchase discussions and 19 projects totalling 2,131 MW were in the study phase in Indonesia as of May 2016. The largest of these projects is the 1,040 MW Upper Cisokan PSP in western Java, which entails an investment of $800 million and is being funded by the World Bank with a loan of $640 million. The project is being developed by South Korea-based engineering, procurement and construction company Daelim and Italy-based Astaldi Group, in a joint venture with Indonesia-based Wijaya Karya Persero Tbk PT.
Recently, Soma Power Indonesia announced its plans to develop the 150 MW Pembangkin hydropower plant on the Bongka river in Tojo Una-Una, Central Sulawesi, with an investment of about $300 million.
Philippines
The Philippines has an installed hydropower capacity of 3,600 MW (2015), accounting for a share of about 19 per cent in the total installed capacity base. At present, coal dominates the country’s energy mix accounting for over one-third of the total installed capacity but the Philippines government is working towards promoting greener energy options.
As of June 2016, the government had awarded 398 hydropower projects aggregating over 8,000 MW. The largest of these is the 1,000 MW Kibungan Hydroelectric Power Project being developed by the Kibungan Hydropower Corporation. Other important projects include the 600 MW San Roque Upper East pump storage and the 400 MW San Roque West pump storage (Storage Strategic Power Development Corporation), 320 MW Dingasan Diduyon Hydroelectric Power Project (Green Energy Management & Holdings, Inc.), and the 500 MW Wawa Pumped Storage 1 Hydroelectric Power Project (Olympia Violago Water & Power, Inc.).
However, many of these projects are not compliant with the Philippines’ Renewable Energy Safety, Health and Environment Rules and Regulations. In addition, the capital-intensive nature, long gestation period (average of seven years) and accompanying issues of social acceptability of large hydropower projects remain the country’s biggest challenges. The government, therefore, is focusing on promoting small hydro projects (SHPs). As of January 2017, about 10 SHPs ranging between 1 MW-43 MW and aggregating about 209 MW are expected to be commissioned by private sector companies between February 2017 and September 2019.
Myanmar
Myanmar has significant hydropower potential of 108 GW, which is mostly concentrated in the states of Kayin, Shan and Kayah where the Salween river flows. Of this potential, just about 3 per cent or 3,151 MW has been exploited so far. Given its unique geographical location, Myanmar can become the energy bridge between the South and Southeast Asian energy systems.
Realising its rich hydropower potential, the Myanmar government notified its plan to install 9 GW of hydro capacity by 2030 in the National Electrification Plan. The country’s hydropower plans are being supported by the international community too as a means of boosting its economic growth. The International Finance Corporation formed the first hydropower working group in the country in August 2016 with over 100 stakeholders from Myanmar’s hydropower sector including companies, civil society organisations, financial institutions, etc.
The Myanmar government identified potential HEPs aggregating about 45.3 GW in its long-term generation expansion plan in 2013. Key HEPs that are currently under way include the 308 MW Upper Yeywa project, being implemented by Toshiba Hydro, and the 1,400 MW Upper Thanlwin project, being implemented by Asia World Company and China-based Hanergy Group. Further, the development of the Irrawaddy river basin is under way through a World Bank credit of $100 million.
Others
Among other SEA countries, Thailand has well-defined hydropower addition plans. The Electricity Generating Authority of Thailand (EGAT), the largest power producer in Thailand, had an installed hydropower capacity of 3,484 MW as of end of January 2017. This accounted for over 8.4 per cent of its total installed capacity. EGAT generated 3,752 MUs or 2.05 per cent of total electricity from hydropower in 2015. The key HEPs commissioned in 2015 include Khwae Noi Bamrungdan Dam Units 1-2 (30 MW) and Khun Dan Prakan Chon Dam (10 MW). Besides, projects scheduled to be commissioned between 2018 and 2020 include the 500 MW Lam Ta Khong Jolabha Vadhana and 360 MW Srinagarind hydropower improvement, and a few small hydro projects aggregating about 27 MW. Besides, EGAT is implementing the Nam Ngiep 1 power project in Lao PDR and the Upper Salaween HEP (Mai Tong) in Myanmar.
Malaysia’s Tenaga Nasional Berhad (TNB) had an installed hydropower capacity of 1,911 MW as of 2015, accounting for a share of about 17 per cent in its total capacity. As per its 10-year growth plan, TNB plans to focus on renewable energy including mini hydro projects. Besides, projects totalling 1,326 MW are under way in Cambodia, of which the 383 MW Ulu Jelai HEP is expected to be commissioned in 2017.
Singapore and Brunei Darussalam have negligible hydropower potential. However, Singapore is planning to deploy technology to generate electricity through magnetic frictionless electric turbines in a deep underground shaft for fast-flowing water to cascade down by gravity to spin the turbines. Brunei intends to export electricity from HEPs in neighbouring Sarawak (Malaysia) in order to reduce its dependence on fossil fuels.
Challenges
The typical challenges to hydropower development include long gestation period and geological surprises during construction. However, these can be mitigated to some extent through the deployment of advanced technology. In addition, displacement of forest land and native population are other key concerns besides environmental issues related to sedimentation, fish migration, etc. These issues often stall HEPs and are especially prominent in countries where rapid HEP development is taking place like Laos and Indonesia. While energy security and economic growth are important for every country, a cost-benefit analysis including social and environmental factors is key before initiating any large project. Hydropower development is also often hampered by lack of reliable data to assess the feasibility and design of HEPs. Given the many issues plaguing large hydropower projects, countries like the Philippines and Malaysia are focusing on smaller, run-of-the-river projects.
Besides, given the pace of global warming, it is now imperative to assess the impact of the changing climate on upcoming HEPs since dams are essentially based on water flows, and shifting water flows is a key effect of climate change. Besides, since HEPs entail high capex, it is important for developers to ensure that dams are resilient to climate change in order to earn financial returns in the long run.
Going forward, increasing power demand, volatile prices in the global energy markets and rising concerns over carbon emissions are likely to drive SEA countries’ interest
in hydropower development – the Mekong’s indigenous renewable energy resource. However, hydropower development in the Mekong basin has drawn wide-ranging reactions, from a ban on all projects to increasing the pace of development to boost the region’s economic prospects. What is required is sustainable hydropower development while accounting for the impact the proposed HEPs are likely to have on the environment, fisheries and livelihoods.
