Xayaburi Hydroelectric Power Project

Background

The economic growth of Thailand demand cause the electricity supply to steadily increased every year.

Ministry of Energy and the Electricity Generating Authority of Thailand have an important role to supply electricity to meet the power demand and provide adequate security with the reasonable tariff and with minimal environmental impact.

From the stated mission, Ministry of Energy and the Electricity Generating Authority of Thailand have developed power development plan (PDP) which prioritized to the domestic resources generation, Thermal power plants that use cleaner fuels such as natural gas, high quality coal, the hydroelectric Pumped and purchase from renewable electricity, etc, and which diversified to others source of fuel for power generation to achieve electricity system security.

In addition, the purchase of electricity from neighboring countries is the key option to supply electric power together with the domestic power generation. The government of Thailand has signed an MOU with the governments of neighboring countries, including Lao PDR., the Republic of the Union of Myanmar, Cambodia and the People's Republic of China to promote the production of electricity for sale to Thailand. The Xayaburi hydropower project is the one that produce electricity for sale to Thailand under a MOU between the governments of Thailand and Lao PDR

Project Description

          Xayaburi hydropower project is located in Xayaburi province of Lao PDR. It was a diversion dam on the Mekong river to raise the water level on the  upstream and release water along the river without the diversion of water from the river and no reservoir as others conventional dam. The Dam will raise the upstream water level close to the maximum water level in the flood season. The water from the Xayaburi province will reach the south of Luang Prabang but the downstream water levels are still at normal.

The Xayaburi hydro power project is a reinforce concrete dam with 810 meters long and 28.5 meters net water head. Ten floodgates were installed to produce electricity. Seven of 175 MW and one of 60 MW generators have been installed to generate electricity for sell to Thailand and Laos PDR., respectively. Total electric power generation is 1,285 MW and it can produce average 7,370 unit of electricity annually.

In this project, the dam is designed to have 12 meter wide and 120 meter long boat lane to accommodate the water transport for ships of 500 tons on the right and the fish ladder 10 meter wide for fish migration on the left. It is also designed to have the emergency spillway to drain exceed water in the flooding season. In the operation when the project is completed, water inflow and water outflow will kept constantly  without water retention, so the amount of water in the Mekong Basin will naturally flow throughout the year.

Benefits of the project

When the project completed, 1220 MW electric Power or 6,929 unit of electric energy per year will be delivered to Thailand at Thailand - Laos border transmission junction for a period of 29 years, starting from the year 2019 onwards. The tariff in this project is at constant price. This means that the price will be unchanged with the change of fuel prices in the world market. It is competitive when compared to other alternatives. The border tariff is average at 2.16 baht per kilowatt - hour over the 29 years contract. While the domestic power plant such as coal and liquefied natural gas (LNG) power plant produce electricity with the average tariff in the range of about 2.90 to 4.30 baht per kilowatt - hour.

In addition, the purchase of electricity from neighboring countries is to promote economic and social relations of the two countries.

Environmental Impact management

Project developer, Xayaburi Power Company Limited, have conducted a study on the social and environmental impact. The impact on the quality of water, air, soil, forestry, wildlife and ecosystem were considered in the study. Results of the study and environmental prevention and remedial plan will be reported to the Government of Lao PDR. Because of the project located on the Mae Kong river, so the project was designed according to the guidelines of the (Mekong River Commission: MRC). The plan to reduce the environmental impact is summarized as follows:

1. Fish Ladder

          The project developer will arrange a Fish Ladder of 10 meters wide, which the fish can migrate through the dam every season. As well as provide fish breeding station to ensure that there is a reasonable amount of fish to the people living along the banks of the Mekong River.

2. Boat Lane

              Currently, transport and shipping cannot be done all year round because of many islands have emerged in dry season. It is obstacle to big boat navigation. The project developer will build a boat channel to accommodate larger cargo ships of 500 tons, making navigation easier than ever.

3. The Sediment Drainage

          Naturally, the high suspended solid occur in flood season, with high volume and high velocity water flow in river but suspended solid will be less in the dry season. The project has a volume of water that flows naturally every day. The project release water flow through the dam without retention so the river flow rate does not change significantly from the natural flow. However, there is special drainage gate installed to release sand, sediment and aqua living feedstock in this project.

4. Bank Erosion Protection

          To prevent bank erosion along the river, project will keep the river flow stable by release water flow throughout the dam every day. Therefore, water level on the upstream will be kept not exceeding 0.5 m and the downstream water level will vary in range of 1.5 m. This causes the water level above the dam does not change throughout the year and the downstream water level changes in according to the season.

More detailed information about the project design and guidelines of the MRC are available at www.mrc.com

The MRC’s project consideration

Laos PDR.’s Government has proposed Xayaburi Project to the Mekong River Commission (MRC), the member consist of Laos PDR., Vietnam, Cambodia and Thailand,  in accordance to the agreement on the Cooperative for the Sustainable Development of the Mekong River Basin. The MRC Joint Committee meeting on Prior Consultation process, as part of the process Procedures for Notification, Prior Consultation and Agreement (PNPCA) with representatives of the MRC Joint Committee of Thailand, Laos, Cambodia and Vietnam to consider the construction of the dam was held on April 19, 2001 at Vientiane, Lao PDR.

For detailed information of Xayaburi project, please visit www.xayaburi.com

Thailand – Myanmar’s Energy Cooperation Projects

Thailand and Myanmar have signed a Memorandum of Understanding (MOU) on Energy on 4 July 1997 in order to develop a partnership to purchase electricity from Myanmar at 1,500 MW.

However, the MOU has expired since 2010 and therefore need to sign MOU to negotiate a new contract with Myanmar further.

Potential projects in Myanmar, including a number of projects.
          The Mai – Kok project (Lignite 390 MW)
                • the agreement has expired
                • Currently the project developer has arranged to negotiate for the new power purchase agreement.

          Hajji Project (1360 MW) and MI tong Project (7000 MW)
                • Is under studying.
                • It plans to develop a proposal to sell electricity to Thailand.

In addition to the above project Myanmar with abundant water resources can bring more power projects on the Salween and the Lower Salween area.

Electricity Trade between Thailand and Malaysia.

One of energy cooperation between Thailand and Malaysia is Electricity Trading through the Electricity Generating Authority of Thailand (EGAT) and Malaysia Electricity Authority (Tenaga Nasional Berhad: TNB).

At present, there are 2 main transmission line connections for power exchange between Thailand and Malaysia.

1. The HVAC transmission Line Connection (Bukit Ketri Station) with power exchange of 30 MW The power purchase agreement in which both sides made an offer for sale of electricity per month, in advance, with 3 price levels , Price A (low) ,Price B (moderately priced) and Price C (high prices).
2. The HVDC transmission line Connection (Gurun Station) with maximum power exchange of 300 MW

The power purchased through this point is Non-Firm in Bulk Energy purchase. Tier is used in term of Electricity purchased (one Tier equivalent to 25 million electricity units). The electricity rate is reversed on the volumes purchased. This price mechanism will make price low.

Economic and Power Trading in the Greater Mekong Sub-region

          Currently, electricity is an essential part of everyday life and to the economic development of the country. It is expected that are traded and helps to strengthen relationship with neighboring countries. Thailand is a country that has highest income and highest electricity consumption per capita in this sub-region. In the future, Thailand will be the major electricity import country and Laos PDR., Myanmar and Yunnan is a major exporter of electricity because they have a lot of hydro resources.

1. General Characteristic of Greater Mekong Sub-region

          The Greater Mekong Sub-region (GMS) compose of 6 member countries, Laos PDR., Cambodia, Myanmar, Vietnam, Yunnan of China and Thailand. This sub-region has an area of 2.3 million square kilometers and population of approximately 250 million. There are many differences in GMS member country such as the abundance of natural resources including cultivation, forestry and fishery, high potential of mineral and plenty of energy resources such as hydro, coal and oil. 

          Some of the GMS member countries are transitioning their economy model from the centrally planned economy to be the market or open economy. Economic size and structure of the member country are huge different. But all countries have rapid economic growth rate over the last several years until the financial and economic crisis occurred in the ASEAN economies. The sub-region has average Gross Domestic Product (GDP) per capita of 260-1,960 USD, electrification rate of 13-97%, electricity consumption of 34-1,300 kW-hr/year/capita. It was significant different for all member countries.

Table 1.1 : Economic Indicators for GMS countries in 1999

Source: Asia development Bank and the world bank forecast

1. Gross national product of Yunnan is average 2/3 of China GNP
2. Year 2000

2. Economic development in recent years.

          The economic growth of all countries before the economic crisis, years 1995 -1996, was high (about 6-10 percent) but after the crisis, year 1997, each GMS country's economy started to slow down. The data in Table 2.1 shows that the impact of each country is different. It is evident that Thailand has the highest impact by the economic crisis. The real GDP growth rate in year 1997 and 1998 are -1.5and -10.8 %, respectively.

Table 2.1 The GMS Countries – Recently Economic Development Change of the real economic growth rate %

Source; Key indicator for Asia Pacific Country and Future of Asia Development, Asia Development Bank, 2000

1. Estimated number

          The major Electricity markets in GMS are Thailand Yunnan and Vietnam. In year 2000, Thailand Yunnan and Vietnam’s electricity consumption are 86,214, 27,696 and 22,241 million units or 61%, 20% and 16% of share on total electricity consumption, respectively.It is shown in table 3.1. This ratio is expected to gradually decline in the future due to Myanmar, Laos and Cambodia, where electricity consumption is trending to rise in the future. The industrial sector is still the main sector that has a high proportion of electricity consumption and it is a key to drive regional electricity demand. While the growth rate of electricity consumption in household sector increases dramatically. This is because the growth of electrical equipment demand, which has not reached saturation point and the electric consumption rate, started from a low base when compared with developed countries.

Table 3.1: The GMS Countries – Peak Demand and Electric Consumption year 2000

Source: Power Plant Statistics from each member country.

1. Sum from the peak demand of each country that does not happen at the same time.

          The data in Table 3.2 revealed that after the economic crisis in 2007, the use of electricity in GMS countries are increasing at declining rates except Thailand that electricity consumption has dropped at a rate of -2.6 percent in 2008. But after Thailand's economy began to recover in 2009, the power consumption increase continuously especially in 2010 Thailand’s power demand rise up to 8.4 percent.

Table 3.2: Changing in Electricity Consumption Rate in GMS %

Source: power plant statistic from member country

4. Tariff Rate

          In 2000, the average tariff in Thailand, Myanmar and Vietnam is about 4.9 to 5.2 cents per kilowatt - hour. While the average cost of electricity in the Laos is PDR. 2.3 cents per kilowatt - hour. This rate is relatively low. Particularly in Laos’s household sector, the Lao government subsidized electricity cost to 1.5 cents per kilowatt - hour. While Cambodia's average tariff equal to 16 cents per kilowatt – hour because the electricity was generated mainly on small and diesel fuel power plants. For Yunnan, China, The average tariff was 3.7 cents per kilowatt - hour. This is because the power plant construction and labor costs are lower than other countries in the GMS. The tariff of the GMS countries in 2000 is presented in Table 4.1.

Table 4.1: The Power tariff of the GMS countries in 2000 Cents/kW-hr

Source: Power Plant Statistic from GMS member country, Asia Development Bank, 2007

5. Conclusion

          Members of the Greater Mekong Sub-region are in cooperation to develop internal electricity trade by connecting transmission and trading of electricity in the region. If these mission successes, it will make the regional power system in secure and promote internal electricity trade within the region. The World Bank study in 2008 indicated that power trade within the region, will reduce the cost of electricity up to 460 billion baht in the 20 years period (2011-2020) and reduce greenhouse gases with valued at 18,000 million baht. This is because the electricity generated was mainly produced by hydroelectric power plant. This trading will make people in the whole region more income and will strengthen economic and social development for the whole sub-region.

Reference: Norconsult, Indicative Master Plan on Power Interconnection in GMS: Power Demand Forecast, Final Report, September 2001