No stopping big hydro projects, despite Lao veto

Niluksi Koswanage Reuters 14 Dec 11;

KUALA LUMPUR (Reuters) - A surge in mega-hydropower projects across the world in the coming decade will only be affected marginally by last week's decision to delay building a large dam across the Mekong, Southeast Asia's longest river.

Hydropower remains a proven way to produce electricity on a large scale, and some governments are extremely reluctant to opt for alternatives such as nuclear. But last week's decision could mean there will be increased focus on minimizing environmental and social costs of new hydro projects, analysts say.

Laos suspended the $3.5 billion Xayaburi dam project on the lower Mekong, awaiting a study into the environmental impact of the river, the world's largest inland fishery.

The 1,260-megawatt project has been hugely controversial and underlined growing global concerns that mega-dams were a damaging and outdated way of generating power. Protests from India to Brazil and Malaysia to China have called for a halt to massive building programs.

"The decision is certainly a game changer in the lower Mekong," said Marc Goichot, who works for environmental group WWF's Greater Mekong program on sustainable hydropower.

"We hope this decision will have influence in the rest of Asia," he told Reuters in an e-mail from the Lao capital Vientiane.

But he added it was hard to pinpoint whether the decision was related to environmental concerns or something else. In September, Myanmar scrapped a $3.6 billion Chinese-led mega-dam across the Irrawaddy River also after environmental worries, but the decision was additionally seen as an attempt by its government to distance itself from Beijing.

"(Last week's) decision also raises the risk profile of these projects for investors, which will undoubtedly scare some investors away or make them more hesitant to fund mainstream dams in the future," said Aviva Imhof, campaigns director at International Rivers, an NGO which opposes large hydropower dams.

"Unfortunately, it's unlikely that the decision will affect dams (now) being built in other parts of Asia or even on tributaries of the Mekong river," she said.

The World Bank, a major hydropower investor, says the social and environmental costs of such projects have to be addressed and resolved at the planning stage -- a failure to do so can sharply increase the impact.

Laos, Thailand, Vietnam and Cambodia share the lower reaches of the Mekong.

Concern has grown after China completed a series of dams on the upper reaches, with more planned, causing lower flows during the wet season and greater flows during droughts, Imhof said.

The Chinese dams also block sediment flowing downstream, causing massive erosion and affecting productivity of floodplain agriculture and in the Mekong Delta, she told Reuters in an e-mail.

The Three Gorges Dam, the world's largest hydropower plant at 22.5 gigawatts when it reaches full capacity, is a symbol of China's quest for energy and is also a taste of what is to come.

A total of 1.25 million people were displaced over 16 years for the Three Gorges dam, leading to widespread criticism and protests. Many blamed the project for widespread drought earlier this year in downstream areas of the Yangtze River.

COAL UNFASHIONABLE, NUCLEAR A WORRY

With countries trying to limit greenhouse gas emissions from coal and other fossil-fuel based power plants, and questions over nuclear power, China and the world's other energy-hungry nations are turning to hydro in a big way.

China wants to raise installed power capacity by 470 gigawatts (GW) to 1,437 GW by 2015 -- the largest in the world. At least 110 gigawatts of the new capacity will be from hydro power -- equivalent to five Three Gorges hydropower projects. Current hydropower capacity is 216 GW, also the world's largest.

Earlier this year, the country said it has committed 400 billion yuan ($62 billion) to build four hydropower stations that would contribute 43 GW by 2015, to be built by China Three Gorges Corp.

Longer-term plans call for China to reach 450 GW of hydropower capacity by 2030. That will involve tapping the largely untouched Tibetan plateau, the source of major rivers that feed nations downstream.

This has triggered distrust at home and in Southeast Asia and a test case will be if China gives the go-ahead in the coming weeks to a series of dams on the Nu, or Salween, river that flows through China's Yunnan province and then Myanmar and Thailand.

India, which generates 18 percent of its electricity from hydropower, is implementing a large-hydro plan totaling 50 GW, or roughly Australia's total generating capacity. Government data shows that India has potential hydropower capacity of 148.7 GW, with 33.9 GW developed and a further 14.6 GW on the way.

But India's hydropower program has also been dogged by protests, especially a decades-long project along the Narmada river in central India. The scheme proposes 30 dams, with two large dams built and a third under construction for power and large-scale irrigation.

In the northeast state of Arunachal Pradesh, a planned 11 GW dam on the Siang river has run into environmental problems and objections from neighboring China. The government is looking to build it further downstream and, if completed, it would be India's largest hydropower dam.

"Hydropower has issues of resettlement, which is the most serious, it has issues of biodiversity conservation," said Pradipto Ghosh, former top civil servant in the environment ministry, and member of the prime minister's panel on climate change.

"But the point is that hydropower is very much part of the energy mix and it will continue to remain part of the energy mix," he told Reuters.

"We have to address these issues," he said. "The way that hydropower projects are now designed and implemented is a far cry from how they were back in the 1950s."

MALAYSIAN PROTESTS

Malaysia, which generates most of its power with fossil fuels, is pushing ahead with a huge hydropower program in Sarawak state on Borneo island that is displacing indigenous communities, disrupting river flows and triggering deep anger.

The 2.4 GW Bakun dam, which started generating power this year, is by far the nation's most controversial project with more than 100 cases still pending in Malaysia's courts. The dam was first proposed in 1960s and shelved twice.

It is the second highest concrete faced rockfill dam in the world at 207 meters high (680 feet), with a reservoir roughly the size of Singapore.

Much of the power will feed an industrial zone with another 12 dams to be built to feed industries such as smelters and solar panel manufacturers.

"The building of these monuments of corruption will be a key issue that we will bring up in the upcoming elections. I believe the unhappiness among the local tribal communities is growing," said Baru Bian, a land rights lawyer in Sarawak.

"I think if the people of Sarawak can appreciate how international pressure has forced Laos to delay the Mekong dam project ... there is a possibility of stopping these projects," Bian, who is also an opposition politician with Anwar Ibrahim's People's Justice Party, told Reuters.

FULL CAPACITY

But a senior government official with knowledge of the Sarawak's hydropower plans denied the concerns of local communities have been ignored.

"We would not proceed if there is a big risk and so far there has not been any major risk," the official said. "We expect the opposition to use the Laos issue to campaign for stopping the dams. But it is a completely different scenario in Laos."

The International Energy Agency says the technical potential for hydropower globally is five times current production based on 2008 data.

It said China had developed 24 percent of its potential, the United States 16 percent and Brazil 25 percent and that by 2050, global hydropower generation could nearly double.

For China, India, Brazil, the Democratic Republic of Congo and others, that means more dam developments in a world where nations are under pressure to cut fossil fuel emissions. Brazil approved the 11.2 GW Belo Monte dam, the world's third largest, in June, while the DRC and South Africa last month signed a deal for a multi-billion dollar project.

"I think eventually there will be real problems. The whole hydropower sector is now in full gear and at full capacity to expand as fast as it can," said Ma Jun, director of the Institute of Public and Environmental Affairs, which monitors China's water supplies.

"We are pressing to the very corners of our territory. If they continue at this speed, quite soon they are going to finish the damming of all our major rivers and at that time, the whole industry will hit a wall," he said.

(Additional reporting by David Stanway in Beijing, Frank Jack Daniel in New Delhi, Biswajyoti Das in Guwahati and David Fogarty in Singapore; Writing by David Fogarty; Editing by Raju Gopalakrishnan)