Thailand has not yet purchased power from Laos’ Luang Prabang dam: EGAT

Mekong residents have repeated calls on the Thai government to take into account transboundary impacts the dam may cause as well as other externalities including local riverine livelihoods before moving ahead with power purchase plans

The People’s Network of Eight Mekong Provinces has disclosed the letter sent from the Electricity Generating Authority of Thailand (EGAT) in response to its inquiries. The letter has suggested that Thailand has not yet purchased electricity from Laos’ Luang Prabang dam as speculated.

Power purchase agreements the agency made in the past with developers of dam projects planned or built on the Lower Mekong as well as on other tributaries in neighbouring countries are highly seen as a critical step to financially secure the projects. So, sustainable development advocates often press for disclosure of these agreements as they are generally not open to the public.

Niwat Roykaew, one of the key members of the network, has revealed EGAT’s replies upon the reception of the letter, which was signed on August 5 by EGAT deputy governor in charge of the strategy department.

The agency informed the group that EGAT has not yet purchased electricity that would be generated by Luang Prabang dam. The purchase of the electricity from Laos’ dams must follow certain procedures, it said.

According to the letter, EGAT conceded that at least four dam projects planned on the Lower Mekong have proposed electricity sales to the agency. Those include Pak Bang, Pak Lay, Luang Prabang, and Sanakham, the third to sixth proposed projects by Lao PDR.

EGAT explained that the Cabinet in late April approved the latest version of the 2018 Power Development Plan, under which up to 3,500 MW of electricity is subject to purchase deals from neighbouring countries’ projects from 2026 to 2035.

However, the Energy Ministry would review the PDP again following the outbreak of COVID-19, which has affected demands for electricity in the country, EGAT said. The plans to purchase electricity from Laos’ dam projects are now with the sub-committee assigned by the Energy Regulatory Commission, the agency noted.

“At present, EGAT has not yet purchased power from Luang Prabang dam and if purchase deals of power from Laos’ dams will be undertaken, they must follow guided procedures, ” EGAT said in the letter.

Pressing for power purchase disclosure

The network in mid last month had submitted a letter to the Ministry of Energy asking it to suspend power purchase agreements from dam projects on the Lower Mekong, including the Luang Prabang project following its conclusion of the prior consultation process, the step widely seen as an official initiation of a dam project proposed on the Mekong River through the MRC’s procedures and mechanisms.

The group cited unresolved transboundary impacts by the first Xayaburi dam and excess of electricity already purchased from foreign power generation sources.

The group claimed since the Xayaburi dam undertook operation testing in mid last year, this has resulted in significant environmental impacts, which have become more severe after the commercial operation of the dam since late October.

Impacts include fluctuations of the Mekong’s water level, disruption of seasonal migrations of native fish species, change of the river’s brownish hue to a blue color due to the lack of sediments, among others, they said.

On a contrary, the group studied the country’s needs for electricity and learned that the 2018 PDP would add another 56,431 MW, including the 5,857 MW set to be imported from neighboring countries, particularly from Lao PDR through the Northeast of Thailand.

They viewed that the plan to import this chunk of the electricity is a key factor that “incentivizes” the construction of large-scale hydropower projects on the Mekong.

So, the group called for the power purchase agreement of the Luang Prabang project to be disclosed.

”While hydropower is often touted as costing less than other energy sources, this is because hydropower projects externalize the cost of addressing social and environmental impacts,” the group had pointed.

Luang Prabang Dam

Since last year, the Lao government has been pushing forward two new dam projects, Luang Prabang and Sanakham on the Lower Mekong, after the first four projects have been through either the prior consultation processes or construction, with one being completed and operational, the 1,245 MW Xayaburi.

There are among the series of 11 dams planned on the Lower section.

The Luang Prabang dam is the fifth that has been put forward to the MRC’s prior consultation, suggesting the formal initiation of the project acknowledged by the Mekong countries.

Under the process, which ended on June 30, it allowed the MRC country members to review the dam documents and give recommendations after a series of consultations with their respective communities.

The process, as interpreted by the MRC country members, does not give rights to approve a project proposal.

According to the MRC, the Luang Prabang dam has been developed by the Luang Prabang Power Company Limited, a company established by the Lao government and PetroVietnam Power Corporation under their 2007 MOU.

Located around 25 km north of Luang Prabang town, the project will have the installed capacity of 1,460 MW, generating power set to be sold to Thailand from 2027 onwards, the MRC cited information provided in the dam documents.

The Sanakham dam, meanwhile, is the sixth that has been put forward to the same prior consultation process.

It is developed by Datang (Lao) Sanakham Hydropower company, a subsidiary of China’s Datang International Power Generation Co. Ltd, with an estimated cost around US$ 2.073 billion. Its installed capacity is set at 684 MW.

The Lao government in July last year submitted the Luang Prabang project for the prior consultation, of which the six-month process officially began on October 8, but its conclusion hit almost a month delay from the schedule due to the Covid-19 and the need for more time for consultation, according to the MRC.

During the wrap-up session of the prior consultation for the Luang Prabang project, it was reported that Thailand, Cambodia, and Viet Nam had requested Lao PDR to conduct “rigorous” transboundary impact assessments, and enhance proposed measures to mitigate potential adverse impacts from the proposed dam.

While appreciating the Lao government’s submission of the project for prior consultation, and its cooperation, and recognising Lao’s sovereignty and rights in making a decision towards the dam development, they had requested that Laos take “due account” of their recommendations outlined in their Official Reply Form, the MRC noted.

For instance, Cambodia called for further transboundary environmental impact assessments to be conducted, considering proper and effective mitigation plans and measures.

And Vietnam said; “The cumulative impacts of the Luang Prabang Hydropower Project and all the Mekong mainstream hydropower projects should be comprehensively assessed.”

Thailand, meanwhile, said; “There is a proposal to Lao PDR and project developer to establish an Endowment Fund and determine transboundary impact mitigation measures in terms of socio-economic, livelihood and environment.”

The MRC Joint Committee comprising top officials representing MRC country members in the consultation process had also issued its Statement that represented the MRC’s position, calling on the Lao government to consider and address the comments and recommendations presented.