hydroboom_asia.jpg

Hydroboom

Hydropower is among the principal potential sources of clean energy in Southeast Asia, in addition to geothermal and bioenergy. Hydropower plants have been the main driver of growth in renewables in the region.

by Valerio Bordonaro
18 August 2021
9 min read
by Valerio Bordonaro
18 August 2021
9 min read

The development of renewable energies is a challenge for countries in Southeast Asia, one of the regions of the world worst affected by climate change. It is therefore of primary importance that governments in the region pursue sustainable development and abandon fossil fuels as soon as possible. The regional geography plays a strategic role, as its river basins make the development of hydropower an attractive prospect. However, a trade-off on the regional political agenda cannot be ignored: in addition to adopting more virtuous energy policies, Southeast Asian economies need to support the growth of thriving emerging markets. The spread of well-being among local populations has led to an increase in energy demand, which in recent years has surged dramatically, growing at twice the rate of the global average. According to the International Energy Agency (IEA), Southeast Asia will have a strong impact on global energy trends, in part due to its enormous demographic potential. Even if hydropower is a significant resource for satisfying energy demand and sustainable development requirements, diversification of the regional mix without compromising economic development will involve addressing a combination of economic, social and environmental issues.

The energy mix and renewable energy sources

The growing demand for energy in Southeast Asia includes both fossil fuels—which account for more than half of the regional energy supply—and renewable energy sources, depending on each country's energy mix. At the regional level, coal and natural gas sustain the demand for electricity generation and oil the demand for transport. Hydropower is among the principal potential sources of clean energy in the region and is associated with geothermal energy and bioenergy. According to a 2018 report by the International Renewable Energy Agency (IRENA), renewable energy sources in 2015 accounted for 17 percent of the region's total electricity production, with hydropower as the leading sector with over three-quarters of the renewable energy produced. Hydropower plants have been the main driver of growth in renewables in the area. Between 2000 and 2016, according to the report, the region's hydroelectric capacity grew from nearly 16 GW to 44 GW, with the coastal countries of the Mekong basin, Cambodia, Laos, Myanmar and Vietnam leading the way. Vietnam has also made huge investments in the hydropower sectors of neighboring countries for export purposes. Overall, power generation in 2015 included natural gas (41 percent), coal (33 percent) and hydropower (16 percent). The increase in economic well-being in Southeast Asian countries was the main growth factor for regional energy demand. According to IRENA, between 1995 and 2015, energy consumption grew at a rate of 3.4 percent per year, an increase driven by rising incomes. The report predicted that energy demand would grow an average of 4.7 percent annually by 2035. Furthermore, economic growth goes hand in hand with energy security: if, to support demand, most of the emerging economies rely on the import of energy sources such as oil and gas, supply is an issue of strategic importance. Many of these resources arrive in Southeast Asia through the Straits of Hormuz and Malacca. In the case of oil, dependency on imports will exceed 80 percent in 2040, up from 65 percent in 2018, according to the IEA. For this reason, Southeast Asian countries are urged to build regional energy security networks, and the Association of Southeast Asian Nations (ASEAN) is, in this regard, a hub of inestimable importance. Moreover, in addition to not being an infinite source of energy, fossil fuels are also responsible for climate change and environmental deterioration. These considerations open the way to energy diversification and are linked to the enhancement of renewable energy sources in the regional energy mix. The result combines sustainable commitment and social and economic advantages for indigenous populations.

0802-WE49_desktop
0803-WE49_mobile

The regional potential of hydropower

In 2018, the IEA reported that 18 percent of Southeast Asia’s energy comes from the hydropower sector, an advantage that enables energy production both on a large and small scale. Small scale projects, those independent of the national electricity network (off-grid), can be implemented with lower startup costs and are considered the optimal solution for rural areas, where electrification is still a challenge. In addition to being very expensive, hydroelectric power also requires significant technical and logistical resources. According to the Alliance for Rural Electrification, the competitive advantage of hydroelectric power lies in the fact that, unlike fossil fuels, it has a carbon footprint close to zero. Combined with these rural electrification systems, this energy source could prove an optimal solution to meet growing regional demand and at the same time promote the sharing of the benefits of economic growth with rural Asia. When it comes to hydropower in Southeast Asia, the debate revolves around the strategic importance of the Mekong, one of Asia’s largest rivers. Starting from the Tibetan Plateau, the Mekong crosses southern China, Myanmar, Laos, Cambodia and Vietnam and is an irreplaceable source of food, water, income and energy for local populations. The Mekong River Commission predicts that the demand for energy with regard to the Lower Mekong Basin (LMB) will grow by 6-7 percent a year, thanks to increased investment in electricity infrastructure. Dams are constructed to generate hydroelectric power, and have lower operating costs compared to the infrastructures used for the production of other types of energy. According to the Alliance for Rural Electrification, those places where the river meets steeper points generate even more energy. That is why countries such as Laos have dozens of hydropower plants and can achieve a total hydropower capacity of 7 GW. Dams are used to control water flow, store energy potential and could play a crucial role in water supply, although most of the projects in progress have been slowed or suspended due to last year’s health crisis. There are a number of social and environmental costs associated with building this infrastructure on river basins. Although they are designed to generate clean energy and start regional economies on the path to sustainable development, the dams built along the rivers can cause irreparable damage to the river itself, its fauna and to local communities whose livelihoods depend on river resources. There is a price to pay for damming water courses, as it stops the flow of nutrients essential for the well-being of ecosystems and obstructs fish migration. Indigenous communities also have to deal with the danger of flooding, which can cause damage to local social and economic systems. The hydropower sector can thus involve the risk of deteriorating the same environment that renewables would like to protect.

0802-WE49_desktop
0803-WE49_mobile

Advantages and disadvantages of hydropower

According to the Mekong River Commission, there are advantages and disadvantages to hydropower in Southeast Asia. While on the one hand, the Commission estimates that the sector could record economic gains of over USD 160 billion by 2040, involving the development of other sectors, including agriculture—linked to food safety and reduced poverty—there are a number of dire consequences related to its development. The Commission notes that the decline in fishing could cost nearly USD 23 billion by 2040, and the loss of forests, wetlands and mangroves could cost up to USD 145 billion. This development would also be at the expense of rice farming along the Mekong, a source of livelihood for indigenous communities. Some experts believe that the use of energy agreements could be a solution, as it would reduce the number of dams needed to meet regional demand. ASEAN plays a fundamental role in this solution, for the ASEAN Power Grid is an infrastructure project designed to connect the area’s economies by creating an integrated electricity grid. The idea was first discussed in the 1990s and is still under development. The initiative aims to meet the growing demand for electricity and improve access to energy services in the region—to date six bilateral interconnections have been made, linking Singapore and the Malay Peninsula, Thailand and Peninsular Malaysia, Thailand and Cambodia and finally Laos and Vietnam. According to some observers, this will allow the main sources of energy demand (first of all, cities) to be connected to multiple production sites, and it is hoped that this will reduce the pressure on river basins and associated risks. The regional cooperation promoted by ASEAN could thus be a solution to the eternal trade-off between economic growth and environmental protection and mitigate the risks associated with hydropower, an invaluable resource given the peculiar geography of the region.

The author: Valerio Bordonaro

He is Director of the Rome office and advisor to the President of the Associazione Italia-ASEAN,an organization founded and led by Enrico Letta to foster exchanges and mutual awareness between Italy and Southeast Asia. Previously, Mr. Bordonaro worked in various capacities at the Foreign Ministry, the United Nations and European institutions.