All forms of large-scale electricity generation have an impact on the environment and the role of hydropower needs to be objectively assessed in that context. The Government of Lao is conscious of the possibility of the environmental impact of hydropower and is taking this into consideration in its energy planning.
Negative impacts include:
The Lao Government accepts that large hydropower projects will, inevitably, have some impact upon the environment and it is thus vital to manage and mitigate the negative impacts and to monitor the mitigation programs. It is also important to ensure that the negative impacts of energy development are outweighed by the economic benefits of development. The government is determined to ensure all reasonable steps are taken to assess and mitigate any impact if a project is to be considered a true success.
Loss of Habitat and Biodiversity
Development, by its very nature, results in change. This change also affects the environment. This occurs in the construction of dams, powerhouses, and transmission lines, generating plants and, in the case of hydro schemes with stored capacity, inundation of the reservoir area. The effects on the environment are both positive and negative.
Accountable hydropower development demands an interest in ensuring that the large financial investment in the project is not jeopardised by catastrophic erosion and siltation and loss of storage within the reservoir. All projects proposed in Lao PDR require the preparation of a catchment management program that will primarily focus on reforestation and catchment protection. These programs will not only ensure the stability of the catchment but will also re-establish fauna habitats. The programs will be best integrated within a Protected Area Management System funded mainly from income generated from the hydropower development. The government has set up a Watershed Management Protection Authority (WMPA), under the direct authority of the Ministry of Agriculture and Forestry, with the specific remit of managing conservation in watershed areas.
Disruption of Human Settlement
Where it becomes necessary to relocate people, it is important to ensure the relocation is done so that the lives of those resettled are improved, with this improvement objectively measured. There are World Bank Standards (Directive 3.20) which set down guidelines for this. All future hydropower projects in Lao PDR will be guided by the World Bank criteria.
In Lao PDR the sparse population within most of the mountain valleys reduces the social cost of resettlement programs and also provides alternative areas for resettlement. Many communities traditionally form temporary settlements. The need to move to new locations is determined by resource availability - as resources are depleted within their area, so the community will move the village to a new location. This historical pattern helps reduce many of the social concerns associated with resettlement requirements.
To assist community development and improve the social equity of hydropower projects the government now requires developers to meet multilateral agency standards and to provide a continuing portion of the project's income to any dislocated community for social development programmes. World Bank standards on resettlement specify that every household should be better off after being resettled. Benefits accruing from resettlement may include rural electrification, improved roads, hospitals and education facilities. Multi-purpose design of the hydropower project can see the replacement of rain-fed paddy land with irrigated paddy and cash crops. Headponds and reservoirs can be stocked with fish and managed so these resources are not over-fished. The community's health and nutrition status will also improve as part of a gradual improvement in socio-economic conditions.
The environmental impact of hydropower projects is predominantly local. Much of the impact caused by the construction work is short term and will heal with time. The severity of the long-term impact is dependent on the site and the design. Large hydropower projects generally attract more vocal criticism, but some larger hydropower projects have lower overall environmental impacts per unit of energy produced than smaller projects and may represent a more optimal development from both economic and environmental perspectives.
Environmental Impact Assessment (EIA) Reports
There are well-established standards for Environmental Impact Assessment, Resettlement, and Environmental Impact Mitigation. If these standards are not applied effectively two problems emerge:
Given the costs of developing a project, delays related to resolving environmental issues can effect the viability of a project. These delays result in more front-end capital being required to develop a project and a higher profit component in the cash flow analysis to cover any extra costs incurred in resolving environmental issues that are prolonged. Front-end capital is expensive because the interest payments accumulate over a potentially long period of time before cash flow is generated to repay any borrowings. It would improve the viability of projects if a streamlined process for resolving the environmental issues associated with energy projects could be created that is acceptable to all interested parties.
Energy developments are often criticised for their effect on water quality, fisheries and agriculture. In Lao PDR these criticisms are usually hearsay and are not based on scientific data that meets an international standard. This often results in subjective and anecdotal debate that does not assist in developing proper management plans. It would greatly assist the process if reliable databases on water quality and fisheries for each project were available so that objective analysis of the effects of each project could be undertaken. This would hopefully reduce the time taken to resolve these issues.
Reduction of Atmospheric Emissions
Hydropower uses falling water as its energy source and is a totally renewable source of energy. It has an energy conversion efficiency of close to 100%. By contrast the main alternative to hydropower is thermal generation which has lower efficiencies (33 - 40%) and is associated with degradation of the atmosphere, global warming and acid rain formation. Acid rain from thermal generation is a growing regional problem in South East Asia. Global warming from the atmospheric build-up of carbon dioxide released from high carbon fossil fuels is an increasing concern. With energy growth within the region projected to double every seven years, the consequences of relying exclusively on thermal power for energy generation will have major regional and significant global consequences.