Why does renewable energy development matter to hydropower investment in the Lower Mekong region?
Thailand is the largest energy-importing country in the Lower Mekong region. The country’s energy imports mainly consist of hydropower imported more than 10 projects built in neighboring Lao PDR and Myanmar, as well as at least one coal-fired power plant in Laos and imports of liquid nitrogen gas. Dozens more hydropower projects are in the planning stages in both these countries, many of which are intended for export to Thailand. Meanwhile, energy demand and forecast levels in Thailand have been fluctuating widely, and there appears to be a current oversupply in its domestic gross energy production capacity.
The Thailand National Power Development Plan (PDP) of 2018 sets the country’s renewable energy targets at a much higher level than in previous PDPs, prioritizing the need to tackle climate change and reduce greenhouse gases emissions. The 2018 PDP mentions solar, wind, and biomass as renewable energy sources. Indicating a shift in thinking, hydropower—which has previously been grouped with renewable energy— is not regarded as a renewable energy source under the PDP 2018. There are already indications that the new administration will seek to revise the PDP, potentially increasing the contribution of renewables even further.
Thailand’s gross national energy production (including imports) has already significantly exceeded current levels of demand, which has led to an excessive reserve margin and higher costs for consumers. Implementation of the PDP 2018’s renewable energy targets is likely to reduce the need for overseas hydropower investment and energy imports, affecting bilateral trade between Thailand and the exporting countries. It is timely, therefore, to consider how the current targets for increasing the share of renewables in Thailand’s energy mix can have co-benefits for sustainable hydropower planning in the Lower Mekong region.
The Lower Mekong Initiative (LMI)-Sustainable Infrastructure Partnership (SIP), implemented by Pact in collaboration with the Stimson Center and partners, has organized a workshop on Lower Mekong Renewable Energy Development and Impacts on Hydropower Trade Scenarios on September 27, 2019, in Bangkok, Thailand, to discuss and promote understanding of the likely impacts of the PDP 2018, and to envision probable energy futures for Thailand and the Lower Mekong region. A good understanding of various scenarios with differing levels of renewable energy development and power imports will be essential context for government agencies, investors and stakeholders in all Lower Mekong countries as they develop their own energy policies and investment plans - and consider the cumulative environmental impacts of various energy scenarios.
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