Environmental Criteria for Hydropower in the Mekong Region - WWF

The Current Status of Environmental Criteria for Hydropower Development in the Mekong Region: A litterature compilation
coal, natural gas and oil, etc. Grid interconnection will permit sharing of these energy
commodities and resources within a regional power market.
The national view of the perceived advantages of hydropower is carried forward to
the GMS level, where hydropower is seen as a primary generation option to advance
with competitive advantages over thermal. For example, hydropower is seen to be
renewable, produce less greenhouse gases than thermal options, is least costly to store
large amounts of electricity, and can easily adjust the amount of electricity produced
to demand by consumers.
From an energy planner’s perspective, the driving factors behind grid integration in
the GMS, summarized in Box 1, stem from a broad base of international experience.
This is the orientation of the Regional Power Trade Coordination Committee.
There are other dimensions to cooperation within the energy framework of GMS
countries. There is a common interest, for example, to reduce dependence on fossil
fuels through energy conservation, development of alternative energy sources and
energy research and development.
The ongoing GMS Energy Sector Strategy TA will look toward developing a broader
regional strategy encompassing all energy sub-sectors, recognizing that traditional
energy supply is still the dominant sector. However, budgets for these sub-sectors
(multilateral and national) are much smaller than budgets for grid integration.
The presence of the regional grid will undoubtedly increase pressure for large-scale
hydropower development, as project scale would be no longer be constrained by the
size and risk of a domestic only market. 30 Nam Theun 2, for example, represents less
that 6 months load growth in Thailand. While moving to regional integration, the
GMS countries will compete to attract investment partners from the regional and
international private sectors. As the current cross-border trade is based on long-term
contracts negotiated mainly in government-to-government arrangements, a sharp
acceleration of private investment in hydropower development is likely to arise when
the grid begins to operate as a power pool with generators able to compete to supply
electricity within a spot price market (which is still some way off) and also linking to
the wider ASEAN power grid. Observers note there is no doubt that cross-border
trade has increased the pace of hydropower development. 31
Formation of the regional grid infrastructure is at the heart of the GMS energy
strategy. 32 Efforts are fairly advanced putting different elements of the subregional
grid system in place, as reflected in the Regional Indicative Master Plan for Power
30
http://www.waterpowermagazine.com/story.asp?sectioncode=166&storyCode=2032402
31
Water power and dam construction international, News, Southeast Asia turns back to hydro. 10
November 2005.
32
The GMS strategy for building the regional grid and linking hydropower strategy are given in the
Sub-regional Electric Power Forum and Regional Power Trade Coordination Committee (RPTCC-5).
34