Shaken by a deadly dam collapse, Laos needs to reconsider its long-term strategy
Laos has made the right move in ordering a review of its major “Battery of Asia” development strategy in the wake of last month’s dam collapse at the Xe-Pian Xe-Namnoy hydropower project in southern Attapeu province. What remains to be seen is how serious the review will be.
Water from the dam inundated 13 villages, killing at least 34 people and leaving more than 100 missing. The disaster displaced thousands of residents, a terrible black mark on the brief history of hydroelectric pursuits in Laos.
Prime Minister Thongloun Sisoulith, at a special cabinet meeting last week, mapped out the key responses. He said the authorities would inspect all the country’s dams, both those completed and those under construction, to ensure they’re safe. The Ministry of Energy and Mines will work with the ministries of Public Works and Transport, Natural Resources and Environment, and Science and Technology and foreign experts in carrying out the inspections. Any irregularities found in design or construction standards must be reported to the government on a case-by-case basis so that repairs and improvements can be made.
More importantly, the government has also decided to suspend further investment in hydropower projects while its strategy for becoming a major exporter of energy across Asia is reviewed. The strategy’s future direction is in question, and it wants that question answered first before proceeding.
Laos devoted years of planning to the scheme by which its rivers would be harnessed to generate electricity for sale to neighbouring countries, and Thailand has been its major buyer so far. The so-called “Battery of Asia” strategy has been in place for decades now, with dams built and still being built all along the Mekong River and its tributaries. The plan is to build more than 90 hydropower plants by 2020 and to export most of the electricity generated. There are currently 53 dams in operation.
Landlocked Laos signed a memorandum of understanding to sell 9,000 megawatts of power to Thailand by 2036. It is contracted to supply 5,400MW now, but has thus far managed only 2,100MW. The balance will be entering the Thai power grid once all foreseen projects are completed.
However, the government needs to face certain realities about market demand for electricity, which rises and falls depending on economic conditions. Experts have said that Thailand already has ample power to meet its needs and will likely never depend more heavily on Laos. Meanwhile Thailand is diversifying its energy sources as well.
Cambodia, China, Vietnam and other countries in the Southeast Asian grid line are also potential markets, but most have their own power supplies and will not be taking up all the electricity that Laos aims to produce. Countries such as Malaysia and Singapore might balk at the transmission distance involved. It could certainly be done, but it would require daunting investment to overcome power loss by attrition along the route.
Crucially, Laos must deal with the fact that hydropower is relatively expensive. Dams are costly to build and have significant social and environmental impacts. Countless studies illustrate that those who invest in dams tend not to take into account the social and environmental implications, particularly when the impacts are to be felt across someone else’s border.
Laos must do more than inspect its dams. It must reconsider the long-term consequences of its central development strategy.