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Mekong dams under threat from green lobby

The environmental lobby is using Southeast Asia’s deepening economic crisis to renew its attacks against dam construction in the region.

In the latest ploy, several Thai environmental NGOs called on EGAT in June to abort plans to buy power from the Lao PDR’s troubled Nam Theun 2 project.

The NGOs claim EGAT’s latest revision of its power demand forecast to 2011, down 11% to 37,047MW from a 41,638MW estimate made in December 1997, makes Nam Theun 2 purchases unnecessary.

They also claim Nam Theun 2 power, using 2004 as the base year, would be more expensive than that from other hydro schemes such as Huay Ho and Theun-Hinboun. Nam Theun 2 power, they say, would cost US$0.057 per kWh whereas that from Huay Ho will cost only US$0.046 per kWh. Theun-Hinboun power, on stream since April, costs US$0.052 per kWh.

The NGOs, including Alternative Power for the Future, the Foundation of Ecological Recovery and Wildlife Fund Thailand, are really only trying to exploit Lao discontent with the prices Thailand would pay for Nam Theun 2 power.

EGAT’s latest load demand revision has caused it to postpone several projects, including power purchases from Nam Ngum 2 and 3 to 2004 and 2005 respectively. But it is now clear that even these figures are hugely optimistic. Whereas they were based on a moderate recession of around 3.5 % negative GDP growth lasting only one or two years, in mid-June Thai government and private sector projections suggested a 5-8% GDP contraction lasting several years.

In this case, EGAT could well have surplus capacity for some time, meaning a halt to all new projects until real growth resumes.

US-based Shlapak Group signed a concession agreement with the Lao PDR government for the US$780M, 615MW Nam Ngum 2 project back in March well before the bad news began to break.