While environmental concerns and high gas and coal prices should be driving investment in more energy efficiency measures, more renewables, and onsite cogeneration plants that reduce consumers’ electricity and heating/cooling costs, the region’s utilities are fast-tracking plans for more giant-scale dams, conventional thermal power plants, and high-risk nuclear plants.
Mekong utilities do this because they can externalize the high costs and risks associated with these schemes onto ratepayers, taxpayers, and rural communities. They are backed by Western development institutions such as the World Bank, International Finance Corporation, and Asian Development Bank, as well as national governments and state development banks with a penchant for big-money construction projects no matter their real costs.
It’s the wrong direction.
While technologies for saving and producing energy are advancing in leaps and bounds, Mekong utilities are mired in oldstyle central planning and cartel-like behavior that cannot deliver what today’s consumers need or want.
Lack of adequate power supply – and the financing to build power plants fast enough to keep up with demand – is widely perceived as the number one problem in the region’s power sector. We think competition, and the lack of it, is the bigger issue. Whether the problem is too little or too much supply, more competition (less aid and government subsidies) would vastly improve the marketplace and help the region’s fledgling regulators do their job.
Companies offering ways to save or produce energy should be allowed to compete fairly at honest prices, regardless of what technology they use, where they are, how big they are, or who owns them.
Mekong governments – like most governments – move half-heartedly toward opening the region’s electricity market to competition while busy jostling for international subsidies to favour this or that technology over others, supply expansion over efficient use, and big over the right scale for the job at hand.
Millions of rural people do not have access to electricity service. Those who do have service bear the high cost of an inefficient and highly centralized system.
We don’t pretend to know what kinds of electricity technologies and services would best meet customers’ needs in the Mekong region. But we are confident the way forward is a shift from monopoly supply expansion to more diverse and decentralized energy sources and markets.