SIEM REAP, CAMBODIA - Thousands of megawatts of wind and solar energy contracts in the Mekong region of Southeast Asia have been signed, seriously challenging the financial viability of major hydropower projects on the river, an energy expert told a water conference last week.
Buoyed by a recent Thai government decision to delay a power purchase deal with a major mainstream Mekong dam, clean-energy proponents and economists told the third Mekong River Commission summit that the regional energy market was on the cusp of a technological revolution.
Brian Eyler, director of the Southeast Asia Program at the Stimson Center, a nonprofit in Washington dedicated to enhancing global peace and security, said 6,000 megawatts' worth of wind and solar contracts had been signed in Cambodia, Vietnam, Thailand and Laos in the last six months.
He said that in January 2017, he and his colleagues had suggested that more solar and wind energy projects be incorporated into Cambodia's power development plan, the prospect of which had been "basically off the table" at the time. "In a year's time, Cambodia has entirely restructured its energy sector" to emphasize solar projects in the country, "and if Cambodia's doing it, you can bet that the other countries are doing it as well."
Two gigawatts of wind and solar projects were announced in Vietnam in February and March alone according to a spreadsheet provided by the Stimson Center.
Hyunjung Lee, senior energy economist at the Asian Development Bank's Southeast Asia Energy Division, said technologies such as wind and solar power were "going to hit the region very significantly, in my view."
"The atmosphere in the region has been changed," she said, even in just the past year. "We see a lot of development can happen in solar and wind in the region," though more integrated approaches were needed.
Lee said the ADB was working to set up a Regional Power Coordination Center that would mimic a highly successful project in southern Africa to create an efficient, integrated regional market.
A six-year Mekong River Commission Council study on development plans for the Mekong, which was the focus of the summit, suggested catastrophic impacts upon the health of the river system if all planned hydropower dams — 11 mainstream projects and more than 100 on tributaries — were built.
In a January report, the International Renewable Energy Agency found that the cost of electricity generated by solar facilities that supply utilities had fallen by 73 percent from 2010 to 2017, and the cost was forecast to be cut in half again by 2020.
At that price trajectory, the cost of solar power would fall below that of hydropower by 2020, long before many planned Mekong dams go online.
Global solar capacity grew 32 percent, adding 94 gigawatts in 2017, while renewables across the board increased by 8.3 percent, the IREA survey of 15,000 data points found. Renewables and solar grew faster in Asia than anywhere else in the world, while the amount of hydropower commissioned across the globe was the lowest in a decade.
Wang Wenling, an assistant professor at Yunnan University's Institute of International Rivers and Eco-Security, said she had just seen firsthand how far the price of solar technology had plummeted on a recent trip to North Carolina in the United States.
"I was super surprised how their solar power production cost per unit is actually cheaper than hydropower. I don't know how they make it — it's almost impossible for me — but their cost is only about 15 percent of the cost in China," she said.
"So I think we have a lot of alternatives and it needs to be considered," she said.
Some participants, particularly from Laos and Cambodia, remained skeptical of the technology.
"I think we need some more figures," said a Cambodian member of the audience, raising concerns about stability. "We also think about some figure for the comparison between the occupation of the land of hydropower with solar energy."
Jake Brunner, program coordinator for the International Union for Conservation of Nature, said the figures for solar were particularly attractive in Cambodia, where land remained relatively cheap, while energy demand was high in neighboring southern Vietnam.
"We calculated that if you took one 10,000-hectare economic land concession in Cambodia, for example, and you made some very conservative assumptions, you could generate about 3 gigawatts, which is pretty close to Cambodia's entire national consumption," he said.
Land is a particularly sensitive issue in Cambodia, where rights group Licadho says more than half a million people have been affected by land conflicts.