Financial Times (UK)
June 7, 2004

Laos is often described as south-east Asia’s future battery, whose hydropower potential could fuel regional economic growth, especially in its more developed neighbour, Thailand.

(Excerpt)

With its untamed rivers and sparse population, Laos is often described as south-east Asia’s future battery, whose hydropower potential could fuel regional economic growth, especially in its more developed neighbour, Thailand.

But Laos’ biggest prospective hydro project, the $1.1bn (‚Ǩ901,417 million, ¬£598,639m) Nam Theun 2 dam, has been bogged down for over a decade because of controversy. At issue is its impact on about 4,500 subsistence farmers whose lands would be flooded and another 130,000 people downstream who depend on the river for farming and fishing.

The state-owned Electricity Generating Authority of Thailand and Electricite de France, the project’s backers, are eager to build the 1070MW dam on the Theun River, a tributary of the Mekong River. But the World Bank has been balking at providing a political risk guarantee, because it harbours doubts about whether the Lao government will actually use the dam’s revenues to benefit those whose lives would be disrupted and the rest of its poor population.

The prolonged controversy reflects broader tensions between Asian governments’ plans to meet their vast demand for energy and environmentalists’ desire to protect natural resources.

China already suffers from acid rain from its coal-fired power plants. Nuclear power – widely used in Japan, Taiwan, South Korea and on the rise in China – have few air emissions but leave dangerous waste that will take millennia to destroy. Natural gas burns cleanly but supplies are limited.

Activists say as state-dominated Asian utilities plot future developments, most consider environmental protection less important than providing cheap energy.

“If they want to protect the environment they have to add to the cost, and I would say the countries in Asia are not ready to pay,” says environmentalist Witoon Permpongsacharoen, of Thailand’s National Economic and Social Advisory Council.

In south-east Asia, the Asian Development Bank sees the 4,800km Mekong River as a potential source of clean, efficient energy that can slake the region’s thirst for electricity without exacerbating air pollution.

To tap the hydro potential, the ADB is promoting dam construction, a regional power grid and a regulatory framework for a competitive regional power market.

But activists say the plan will wreak havoc on millions of poor rural dwellers in China’s Yunnan province, Burma, Thailand, Cambodia, Laos and Vietnam.

The hydropower schemes are also emerging as a source of regional friction. China’s plans to build massive dams along the upper Mekong have alarmed its smaller, downstream  neighbours, who say three existing dams have alreadycaused floods and water shortages. Thai senators are formally protesting against Beijing’s schemes, while Vietnam has expressed quiet concern.

Thailand’s proposal to dam the Salween River along the Thai-Burma border has provoked another outcry. Activists say the dam’s reservoir – which would lie entirely in Burma – will flood lands inhabited by Burma’s Karen ethnic minority, which has long fought Rangoon’s military junta.

“Thailand will get the power, the junta will get the revenues and the ethnic minorities will get flooded,” says Chuenchom Sangarasri Greacen, an independent energy analyst.

Instead of building expensive mega-projects, activists say Asian governments should pay more attention to tapping renewable energy sources including solar power, wind power, or agricultural waste.

Asia could also do more to conserve energy. Though per capita energy consumption is just one-twentieth of the west’s, the region uses more energy per unit of GDP, largely due to industrial inefficiencies which could be rectified.

“On average, Asian countries have less efficient factories and less efficient equipment compared with advanced countries,” says Peter du Pont, an expert with Danish Energy Management. “There is a large potential to save energy in existing buildings and factories with a quick payback.”

Thailand, a leader in Asian energy conservation, has already saved the equivalent of 700MW – the equivalent of a large power plant – through its pioneering effort at demand-side management.