Sustainable considerations

26 January 2011

Lawrence Haas and Voradeth Phonekeo from the Mekong River Commission Secretariat give an insight into sustainable hydro development in the Lower Mekong River Basin [1]

The Mekong River Basin in Southeast Asia is one of the most active regions in the world for hydropower development. The number of operating and proposed hydropower schemes in the Mekong calls for considering hydropower from both project and basin-level sustainable development perspectives.

The Mekong River Basin is defined as the land area surrounding all the streams and rivers that flow into the Mekong River and eventually into the South China Sea. The basin includes parts of China, Myanmar and VietNam, nearly one third of Thailand and most of Cambodia and Lao PDR. With a total land area of 795,000km2 the basin is nearly the size of France and Germany combined.

Hydro plans

Hydropower is part of the renewable energy endowment of the Mekong region. Especially with the revival of interest in 14,000MW in 12 hydropower schemes on the Lao, Lao-Thai and Cambodian reaches of the Mekong mainstream, a key challenge governments face is how to place decisions about the management and development of hydropower in a river basin perspective.

The main inter-governmental mechanism for coordinating efforts for sustainable development and use of Mekong water and related resources is the mekong-river-commission (MRC). The MRC was formed in 1995 through the Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin, which was signed by the governments of Cambodia, Lao PDR, Thailand and VietNam.

As well as creating the commission, this agreement set out principles and procedures for joint management of their shared water resources and the development of the economic potential of the river to reduce regional poverty and increase people’s welfare. In 1996, China and Myanmar became Dialogue Partners of the MRC.

State of the Mekong river basin

The MRC’s 2010 State of the Basin Report provides an overall picture of the basin in terms of the economy, the environment, the people and their livelihoods [2]. In broader terms, the report notes that despite sustained economic growth over the past two decades, much of the Mekong basin itself remains among the world’s poorest areas. Many parts of the basin have poverty rates of up to 40%. By 2008, per capita electricity consumption only reached two-thirds of the developing country average. The growing income gap between urban and rural populations is an increasing concern. Many basin residents still rely on water and related resources for livelihood, nutrition and culture.

Recently, development of water resources in the Mekong river basin has started to accelerate, in particular in the hydropower and irrigation sectors, amid renewed calls by governments for private sector financing. Governments of the basin countries increasingly recognise that developing the economic potential of the Mekong River sustainably will help efforts to boost growth in mutually beneficial ways, alleviate poverty and improve livelihoods. But the hydropower opportunities especially need to be weighed up against the potential risks to the environment, fisheries and people’s livelihoods.

The fisheries in the Lower Mekong basin are vast, even by world standards. The capture fishery yield from the Mekong is approximately 2% of the total world marine and freshwater capture fishery. From a fisheries perspective, the Mekong is not just another river system. It is extremely important for the livelihoods and nutrition of 65M people in the Lower Mekong Basin, particularly in terms of its vast fisheries resources.

Drivers of accelerated development

There are several factors driving the increased interest in developing renewable energy sources for power needs, including hydropower, in the Mekong Basin.

The rapid pace of export-led growth comes on top of efforts to improve electricity access in urban and rural areas, amid urbanisation and underlying population growth. Volatility in the international price of oil and gas and concerns over climate change also serve to intensify the focus on hydropower. At present, 85% of power generation in the MRC Countries is thermal and the region as a whole imports approximately 22% of its energy for electricity generation (coal, oil and gas). This is set to rise.

Mekong governments (especially Lao PDR and Cambodia) see the potential earnings from electricity export as a means for reducing national debt burdens and improving cash-flow, and expanding cross-border power trade to reinforce regional economic integration and regional energy security policies.

There are currently 135 existing and potential hydropower projects in the lower basin. Slightly over 10% (3235MW) of the estimated large scale hydroelectric potential of 30,000MW is now utilised on Mekong tributaries. Most of this is from projects completed in the past two decades. A further 3209MW are currently under construction on the tributary systems.

One indication of the relevance, immediacy and scale of the sustainability challenge is offered in the MRC’s recent basin development plan (BDP) scenario assessment exercise. In this, the BDP notes that up to 41 large hydropower schemes on LMB tributary systems are proposed by 2015 [3]. This compares to 15 LMB schemes in the baseline case for 2000, an increase of 26 large dams. The 20-year probable future scenario (PFS) sees up to 71 large hydropower schemes operating on LMB tributaries by 2030. These would have a combined active daily-to-seasonal storage and flow regulation which is almost double the storage of Lancang-Mekong dams in Yunnan Province in China.

Key sustainability challenges

The rapid pace of hydropower development in the Mekong highlights the importance of assessing the cumulative and transboundary impacts of hydropower operations, including the consequences for river flow regimes, fish passage, water quality and sediment flow and sediment-nutrient balances impacting on fish and agriculture productivity. These cumulative impacts will become more important as the number of dam projects in the Mekong continues to increase in the foreseeable future.

One major anticipated consequence of hydropower development is an increase in regional dry season flows as water stored in the flood season is used to generate electricity in later months. It is not just the distribution and volume of seasonal flows that are important. The timing of the onset of the different seasonal changes vary little from year-to-year so any small change could have potentially large environmental consequences that translate into impacts on fisheries resources. Another long-term impact in the Mekong context is sediment trapping. There is also the question of the degree of impacts from barriers to fish migration that can be tolerated, changes in sediment transport, and changes in the ecosystems when the hydrological regime including the flood pulse is altered.

The re-regulation of flows can have beneficial effects, to the extent that higher flows occurring downstream in the dry season make mainstream run-of-river hydropower schemes in the LMB financially more attractive. They also increase the potential for irrigation and can reduce salinity intrusion in the Mekong delta. The construction of dams also offers an opportunity to improve river navigability by providing more reliable and consistent water depths.

One key sustainability challenge is the understanding of the many development synergies and trade-offs hydropower has with the different water-related sectors, such as those synergies between irrigation and hydropower, and the trade-offs between hydropower and fisheries.

So how is the MRC, as an inter-governmental river basin organisation, responding to the hydropower sustainability challenge?

In keeping with its mandate, the MRC is introducing a more holistic approach to the assessment of risks and opportunities of hydro development. This is through a number of complementary steps, which include strategic studies, data and analysis, preparation of guidance materials and stepped-up dialogue with government, private developers and civil society on sustainability issues and tradeoffs.

1) Launching the MRC initiative on sustainable hydropower

The evolution of MRC’s support to member states in the hydropower sector is characterised by a gradual shift in emphasis away from the sole promotion of hydropower towards the advancement of sustainable forms of hydropower development and management, and the transboundary aspects of this.

To give a clear focus on sustainable considerations embodied in the 1995 Mekong Agreement, the previous MRC Hydropower Programme was reformulated as the MRC Initiative on Sustainable Hydropower (ISH). The initiative was formulated in national and regional multi-stakeholder processes in 2008 and endorsed by the MRC Joint Committee in 2009. Implementation of this cross-cutting initiative involves the other MRC Programmes (eg navigation, fisheries and environment) and supports the Basin Development Plan process.

2) Adopting hydropower sustainability assessment tools for all stages of the project cycle

Through the Initiative, the MRC has been actively assisting the member countries to become familiar with hydropower sustainability assessment tools, with the view to eventually establish a sustainability assessment process to systematically apply to the whole population of dams in the LMB.

Such tools will enable measurement, analysis and reporting on progress in achieving sustainable outcomes, as well as highlight opportunities for improvement, priorities and shared experiences on the emerging good practices among member countries. At the project level, MRCS will consider adopting the voluntary Hydropower Sustainability Assessment Protocol (SAP) now being developed in the multi-stakeholder process led by the international-hydropower-association (iha). The SAP is expected to be available by the end of 2010.

The MRC is also preparing a rapid basin/sub-basin hydropower sustainability assessment tool (RSAT) that will consider the design and operation of multiple-projects in a sub-basin. Together these assessment tools will enable practitioners, planners and stakeholders to consider steps to improve the sustainable performance of hydropower at each stage of the planning and project cycle.

3) Initiating strategic studies using multi-stakeholder processes: balancing opportunities and risks

A recent priority for the MRC has been to assess the long-term implications of the mainstream dam proposals working with member states and non-governmental stakeholders. To do this, in 2009, the MRC commissioned the strategic environment assessment (SEA) of proposed mainstream dams. The SEA aimed to systematically assess the regional distribution of costs and benefits for the different affected interests and sectors, with respect to economic development, social equity and environmental protection. It considers avoidance, mitigation and enhancement strategies and contributed to the MRCS Basin-wide framework of analysis linking decisions on hydropower to integrated water resources management basin development goals.

The SEA was completed in October 2010. It will inform government reviews of the project-specific EIAs submitted by developers for individual projects, and critically, inform how the MRC can best enhance its support to member countries when they begin the PNPCA process for any mainstream proposal (see below).

4) Procedures for Prior Notification, Prior Consultation (PNPCA)

The 1995 Mekong Agreement established a series of protocols for member countries to consult each other if they wish to pursue any major infrastructure developments on the Mekong or tributaries, particularly if those developments may have significant cumulative or transboundary impacts for people or the environment downstream.

The MRC received 28 notifications for hydropower projects on Mekong tributaries, as of 2009. From 2008, Cambodia, Lao PDR and Thailand have also provided official confirmation that they are investigating 12 mainstream hydropower development options. Official submission for the first full consultation on a mainstream proposal was received by MRC in September 2010, and has recently begun the six-month prior consultation process with MRC member countries. This submission was for the 1280MW Xayaburi hydropower project in Lao PDR. The Xayaburi project developer intends to sell most of the power to Thailand.

Promoting dialogue

The MRC is more generally pursuing and promoting dialogue on policy, planning and technical aspects to advance sustainable considerations in hydropower from project level to basin-wide perspectives. The MRC role includes:

• Providing independent and impartial advice regarding existing and proposed projects.

• Facilitating coordination amongst the Mekong riparian nations of hydropower research.

• Providing sustainability assessment and strategy development.

• Encouraging dialogue and communication between government, private sector and civil society stakeholders.

• Improving and encouraging partnerships to form.

• Improving participation to better inform the hydropower decision-making processes.

An immediate challenge relates to the first Mekong PNPCA process on the Xayaburi project, and ensuring decision-makers and stakeholders in MRC member countries see the full range of sustainability issues. The wider challenge is to ensure plans for sustainable development of the Mekong river basin are linked to the plans for sustainable development of the regional power sector.

Lawrence Haas is a consultant and Voradeth Phonekeo is the project manager for the Initiative on Sustainable Hydropower, Mekong River Commission Secretariat, Vientiane, Lao PDR

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