Hydropower Projects in Nepal and Myanmar Remain Uncertain

Background

Hydropower is the foundation of the Chinese transition from fossil fuels to renewable energy sources. In the past two decades it has added more than 300GW of hydroelectricity to its grid. China sees itself as a global leader in the development of hydropower and is willing to help finance and build hydropower projects abroad. Those projects are often controversial, however, as regional actors are unsure of Beijing’s true intentions

Comment

Indian security analysts are concerned about China’s reasons for damming Tibetan rivers. They believe that dams could allow China to assert control over disputed regions (such as Arunachal Pradesh) and reduce water flows to India.

India is also competing with China for influence in Nepal. In November 2017, the previous Nepalese Government cancelled a Chinese loan for the construction of the Budhi Gandaki hydropower project; a decision that was reversed by Prime Minister Khadga Prasad Sharma Oli in September. His government is likely to continue to attempt to play off the two Asian powers against one another, to derive benefits for Nepal.

There is also growing speculation that China wishes to restart the Myitsone Dam project in Myanmar. The project was suspended by the Thein Sein administration after months of protests in 2011. The Chinese State Power Investment Corporation is reportedly‘ramping up efforts to lobby residents’ to overcome objections to the project. Myanmar has recently resurfaced as a piece of the Chinese influence building strategy in the Indian Ocean region, with the negotiation of an agreement for the development of a deep-water port at Kyaukphyu. As the Myitsone Dam project remains unpopular in Myanmar, however, any attempt to restart it is likely to lead to an increase in protests.

It is not only geostrategic concerns that call Chinese hydropower projects into question. The International Energy Agency and the Intergovernmental Panel on Climate Change continue to see hydropower as a vital component of the transition away from fossil fuels, but others see it as a costly and inefficient source of renewable energy. While hydropower development continues to increase globally, the rate of growth has declined to its lowest level in more than a decade. That suggests that there is a growing global uncertainty about the long-term utility of the technology.

Advances in solar and wind power, and energy storage technologies, mean that hydropower is not always the most appropriate renewable energy source. Furthermore, there are often delays and cost overruns in the construction of hydropower projects, as well as large environmental and social costs once they are built. While hydropower remains a contentious energy option, there are studies that suggest that, in most cases, ‘large hydropower dams will be too costly in absolute terms and take too long to build to deliver a positive risk-adjusted return’. Increased competition for water and declining river flows, caused in part by climate change, are also likely to weaken the power generating potential of hydropower projects.

Chinese hydropower projects are likely to continue to be controversial in Asia. Due to uncertainty about Beijing’s real intentions and the continuing development of alternative renewable sources of energy, it is questionable whether they will actually be built.

 

Published by Future Directions International Pty Ltd.