Source: Hirsch, P., 1991, Asia Pacific Focus, People
and environment in change
Hydro dam protests make headlines in the 1980s
A major reason for its inability to meet projected demand has been the Thai public’s opposition to large hydros. Large hydro development in Thailand is almost at a standstill as a result of past and continuing contests over the environmental and social impacts. The proposed 580 MW Nam Choan Dam, which would have flooded rare lowland riverine forest and displaced six Karen communities, was a landmark case which helped arouse Thai society’s consciousness of environmental issues. The protests over Nam Choan, which began in 1982, developed concurrently with a growing concern over a number of rural and urban environmental issues affecting all stratas of Thai society. Public opposition by Thai
student environmental groups, concerned academics, and other government officials shelved the project by 1983. However Nam Choan was revived in 1986. Within a liberalising society that afforded greater legitimacy to local protest, widespread public protests resurfaced encompassing even greater segments of Thai society that included the affected Karen supported by middle class people and civil servants from within the province. The Dam was finally cancelled in 1988. Following Nam Choan, the Kaeng Krung, Kaeng Sua Ten, and Pak Mul Dams in the South, North and Northeast respectively have all met with local and wider opposition. Widespread opposition has all but paralysed Thailand’s large hydro developments and anticipated pressure to reduce air pollution from lignite and coal-fired thermal plants has led Thailand to look to its neighbours to fulfil its power needs.
In late 1992, Thailand signed a non-binding Memorandum of Understanding
(MOU) with Laos to purchase output from new installed capacity in Laos totalling 1500 MW
from the year 2000. This was extended in June 1996 to 3000MW by the year 2006. Thailand is
Laos single export market for its hydropower production. From the beginning, this
situation has left Laos in a weak negotiating position despite the commercial principle
that EGAT would negotiate a power purchase price based on an individual project's cost
structure. The economic crisis that hit Thailand in 1997 has forced EGAT to revise its
power demand projections downward as the country was forced into recession. This has
left Laos in an even weaker position in several respects. First, Thailand has been working
to diversify its sources of energy and therefore its ability to play-off one producer
against another. This has included gas from Myanmar, hydropower from Mekong main-stream
dams in Yunnan Province, China, and the development and expansion of its own domestic
Independent Power Producers (IPP) program. Secondly, Thailand may no longer need the
generated power that Laos is planning to bring on-line over the next 7 years.
The result has been that projects like Nam Theun 2 who are currently trying to negotiate a
Power Purchase Agreement have been offered prices by EGAT that make the projects
unprofitable. Of further concern to the hydro developers in Laos is EGAT's own debt
problems as a result of the economic crisis and the sharp devaluation of the Thai Baht
which has seen EGAT lose the AAA credit rating that it had prior to the crisis. This has
raised questions over whether EGAT is in a position to pay for its power purchases.
Finally, as a result of the devaluation of the Thai Baht some projects such as Theun
Hinboun whose Power Purchase Agreement allowed EGAT to pay half the cost in US dollars and
the other half in Thai Baht will result in reduced real revenues for the owners of the
hydro plant.